Almost everyone at one time or the other has nursed the idea of starting a business. Working on your terms without being under a boss is thrilling. As pleasing as the concept is, not every startup succeeds. It is not surprising as there are many factors one needs to put together before starting a company. Adequate preparation is vital to overcome the pitfalls and hurdles that could be a clog on your wheel of success.
One needs adequate planning, among others, to succeed with a new company. It is not enough to have a brilliant business idea. Between the idea and execution lies many factors one needs to examine critically. Here are five factors to consider before starting a company:
Finance and Capital
The fund is the fuel that powers a company. Survival of a business without funds is not possible. Many things determine the startup cost of a business, such as the nature of the business.
Means of financing is a critical factor one needs to consider before starting a business. The source of funds could be from your saving, or you can borrow. Most times, small businesses will rely on personal funds at the initial stage of starting. There is also the opportunity to borrow, which could be long or short term loans. However, one needs to consider a couple of things when borrowing, especially loan conditions, such as repayment terms, interest rates, collateral, etc. Sources of a loan include banks and private lenders.
In establishing a company, location is one of the most critical factors. If your company will regularly need materials sourced from other countries, proximity to the port is vital. A retail company needs to be located in a densely populated area where access to the target is easy.
Factors such as electricity, water, taxes, transportation, etc., should guide manufacturing companies’ location. Availability of human resources also matters. Some areas can even make a firm qualify for a subsidy from the government. Make sure to select a place that fits your business and gives room for expansion. After choosing the site, it is essential to get a registered office address in London or any other location.
The demand for your product or service is also a vital factor to consider before starting a business. This involves identifying your customers and where they are located. For companies that prefer to serve international clients, it is vital to come to terms with the rules guiding international relations.
A market survey can help you understand the details you need for the demand for the product. Everything one needs revolves around the following:
- The size of the market at present, such as an estimate of projected customers
- Whether such a market will expand in the future
- Your share of the market
- The buying nature of the market and how to engage it
Social media has proven invaluable for reaching, understanding, and analyzing the market audience. It can help in the analysis.
Deciding the structure that the company will take is vital as well. There are various ways one can structure a business depending on funds and the parties involved. Here is a breakdown of multiple forms of business structures
- Sole Proprietorship: Also known as a one-person business. It means you own and control the company.
- Partnership: This is when two or more person(s) come together to form a business.
- Corporations: Is a business organization between people called shareholders. The minimum number of people required for this is five.
Each business structure has its unique features and other things peculiar to it, like taxes. It is vital to understand this before deciding on the business structure.
The staff is like the heart of the company. Their competency and effectiveness can go a long way to determine the company’s future and overall success. A good workforce is crucial to ensure that a business succeeds and stands the test of time.
Recruiting staff can be an in-house endeavor, or you enlist the help of a recruitment agency. In addition to hiring, one needs to ensure continuous and relevant training for staff. As technology keeps evolving, the right training process is vital to keep up with changing business needs. With this, the workforce will be well equipped to handle the business needs and expectations.
The right motivation is also essential in bonuses, promotions, and salaries to keep their spirit up while at work.
Starting a company is a fantastic idea; sadly, statistics show that 70% of new companies survive for the first ten years. More than 50% of new small businesses do not have what it takes to make it to the fifth year. The statistics point to the fact that adequate preparation is vital to the survival of new companies. In successfully starting and running a company, one needs more than passion. Hard work, finance, experience, knowledge of the competition, and patience all work together to preserve a company and keep it against the winds, storms, and tides.
DepositPhotos – business startup