Starting a business is not for the faint of heart. It takes balls to decide that you’re ready to put all of your eggs in one basket and see whether they will hatch or rot. But as they say, no guts, no glory. If you stay meek, you will never reap the rewards you dream of.
That goes without saying that jumping into an entrepreneurial endeavor is not strictly a gamble. There’s a science to it which you can study and master. Here’s where you can begin; get to know the five components of a successful business.
Capital
Your initial capital can come from a variety of sources. You can opt to strictly rely on your available funds. If you have bigger and more demanding plans, you can reach out to banks and credit unions.
Here your credit history will matter. Lenders will want to ensure that you are a responsible borrower. So before filing your business loan application, you have to gauge whether your credit score will work in your favor. If not, do the necessary adjustments and preparations.
Make sure your working capital is properly distributed across startup expenses. For instance, you cannot splurge on your physical store while deliberately cutting down the budget for the purchase of resources to be used for your product.
Product
Speaking of product, keep in mind that yours does not have to be completely novel. In the United States alone, there are 30.7 million small businesses. That means there are 30.7 million products and services claiming a certain level of originality, a concept that is difficult to grasp given that sheer number.
The point is your goal in terms of product proposition should not be originality per se. A product that’s interesting and fresh should be enough. Interesting and fresh could mean a simple update to products that already exist.
You can even abandon freshness entirely and focus on product credibility. After all, a huge chunk of consumers is inclined to purchase something familiar simply because it’s reliable.
Location
Do not jump into the real estate industry without proper guidance. You might need the professional help of a mortgage broker. That is true whether you’re purchasing an empty piece of land or an existing building.
A mortgage broker will work as an intermediary between you and your potential mortgage lender. Your mortgage broker will look into all of your official documents and determine what’s the best approach for your loan application.
If you’ve received enough business funding to pay for your business location in cold cash, you will still need a financial advisor by your side. Remember that real estate transactions can get tricky and you do not want to go at it blind.
Labor
You need a winning team. Therefore, you need a human resource staff who knows how to do their job. If your working capital does not cover hiring an in-house HR, you might consider outsourcing labor recruitment for your business. Many business outfits specialize in matching employees and employers.
But if you’re only hiring a skeletal staff, you can also do it yourself. Just read a little about HR management and you will be set to go. Make sure to accurately share your business plan with your new set of employees. You should all be on the same page.
Promotion
No business will succeed without promotion. That’s true whether you are starting a brick-and-mortar shop, an e-commerce business, or a combination of the two. Nowadays, you do not need to break the bank to promote your brand.
You can employ social media to get your product out there. Create social media pages and carefully utilize the free analytics offered by platforms such as Facebook and Twitter. Invest in content marketing. That’s a more budget-friendly way to market your brand, at least compared to a traditional TV spot.
Now that you know the foundations of a successful business, the next thing to take to heart is the common pitfalls encountered by newbie entrepreneurs. On top of this list is not working with a foolproof business plan.
Ideally, all businesses should begin with a carefully designed business plan. Here you plot all of your moves from attracting investors to marketing your products and services. A business plan will guide you through your entrepreneurial journey. The worse that you can do is wing it and trust in the obsolete saying that if you build it, they will come.
No, they won’t come. That is unless they have good reasons to do so. And that’s something you will have to prove first.
