10+ Things You Need to Consider When Starting a Business

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Product or service is usually the only thing new entrepreneurs consider when they start a business. I hate to be the one to break it to you, but business is more than just the product or service.

While the things you need to consider in a startup will be different depending on the industry and business model, there are three areas that you should always weigh: subjective matters, resources, and market.

Subjective things to consider
These will define your business and personal goals. Items listed here can be disregarded before starting a business, but I advise you to think about these. Many businesses didn't give these ideas some though early on but were able to establish a sustainable business. That said, these will give your business a sense of purpose. It will also distinguish your business from others in the same industry.

• Why are you doing business?
  Also defined as your business mission and vision statement. What is the purpose of your business other than making money out of it?
  
  It is easier to endure obstacles when you give your business a sense of purpose. It gives you and people working in your business something to look forward to. In many ways, it makes working on your business a bit more exciting.
• What is your exit strategy? 
  Your exit strategy will be defined by your personal and business goals. Your exit strategy will serve as a guide on what you want your business to look like in the future. While future situations can influence your exit strategy, thinking about it now can give you an idea of your future business plans.
  
  Exit strategies: Selling to another individual, going public, being acquired by another company, hiring someone to manage and run it, passing it on to the family, closing down (liquidation).
• What (are) your blind spot(s)?
  We tend to believe that what we know is what is right. And because of this, it can be difficult to look at things objectively.
  
  Some people are good at looking at the big picture, while some are better at spotting details. Some are analytical, while some are creative. Some are linear in thinking, while others are lateral in thinking. Who you are as a person can create blind spots in business. Find out what your strengths and weaknesses are, and look for people who can compliment your strengths.

Resources to consider
Business starts and ends with you. Your business startup success will be influenced by these things:

• Finances
  How much do you need to start the business? How much do you need to operate the business daily?
• Time 
  Unfortunately, you’ll work more hours in your business than the typical employee work hours. Because building a business takes time.
• Energy (i.e., Effort) 
  In a startup, when you stop, your business stops. You’ll be required to put in the effort on your business even when you "don't feel like it."
• Skills 
  Take inventory of your skills and assess if you have the required skills for your business. If you don’t have it, learn it. If you don't have the time to learn or do it, hire someone or find a partner who can.
  
  Skills you may not have thought about include bookkeeping, accounting, negotiating, marketing, sales, customer service, leadership, networking, problem-solving and project management.
  
  Side Note:
  Selling products should be done by owners of the startup. It is the only way to validate a business idea properly.
  
  Selling can be scary for many because of how we typically think about salespeople. Take the time to learn how to sell and immerse yourself in selling your product and ideas.
• Contacts (Network)
  Your contacts can create value for your startup. What best way to find people who'll do business with you than to spread the word to your network? Your contacts can also help you build your business or help you find people who can.
• Human Resources
  One of the misconceptions by new entrepreneurs when it comes to working with people is that hiring is the only step in building a team. If your business relies on other people, you should consider learning more about leadership and human resources management.
  
  Building relations with your employees don’t end in hiring. Hiring, firing, training, and leading people are all part of the business process. You should also consider learning about payroll computation and payroll laws.

Things to consider about your market
Customers are the lifeline of your business. If you’re not creating value for those who want to do business with you, there’s no point in doing business. Your startup is an expensive hobby until you start earning from it.

Take note that I'll use the term "product" for either product or service hereon.

• Who are your customers? 
  During the startup phase, you’ll need to discover who your customers are. If you don’t know who your customers are, how will you know who’ll do business with you?
  
  Your ideal customer(s) is a list of demographics, behaviors, needs, and their reasons for buying your product. This list is a hypothesis of who your customers will be. You will then make corrections and update this list, or create a new one, as you validate your list.
• What do your customers want?
  Your product is in the development stage, alongside your hypothesis on your ideal customer, until it is ready for a wider audience. Your product that's ready for a wider audience will develop as you discover who your customers are and what they want.
• Price
  Pricing can influence your target market. Know who your market is, what they want, and how much they are willing to pay for your product.
• Competition (Who is your competition? What do they do?)
  Competition is a good thing. Competition simply means that people are already buying. When you analyze your competitors, you'll realize that part of your market validation is done. All you need to do is distinguish yourself from the competition.
  
  If no else is doing what you're doing, it may be a sign that your market is not ready for what you're going to offer. It may take you more time and effort to penetrate the market. Of course, there is a lot more to be said about this, but let's leave it there for now.

Other things to consider

• Personal expenses
  Don't use all of your savings on your business. Be careful of making your first and one-and-only business to be your only source of income. Building a business takes time and effort.
  
  As a startup, your business projections are speculative. What it means is that your projections are guesses until you prove them to be correct.
  
  Inexperienced entrepreneurs assume that they start earning from their business when the business begins. Which is not always the case.

Remember, a startup is different from an established business. A startup is an experiment. It is a list of hypotheses (guesses) to test and validate.

While this a long list to consider, don't let it overwhelm and stop you. Take small steps that will move you toward building your business.

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Want to learn more about starting a business? Send me a message and let's talk about it.

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