Starting your own business, being your own boss, and having the freedom and flexibility that comes with it can be an attractive option for some.
And while it can be an exciting journey, it can also be challenging at the beginning because before you launch your business, you likely ‘don’t know what you don’t know’.
Some things will come with time and experience. However, there are some key questions you should consider before you launch your business to give yourself the best chance of success.
To get you off to a good start, here are 6 of them.
1. Is your business idea viable?
And have you done all the required research? This goes beyond asking family and friends whether they think it’s a good idea or not.
If you’ve come up with a unique business idea, do you know if there is a gap in the market? Are you providing a solution that doesn’t yet exist? In short, is there a need for it?
Even if you haven’t got a unique idea and are providing something that already exists (you don’t have to reinvent the wheel), you’ll need to distinguish yourself from the competition – to give your potential clients or customers a reason to buy from you instead of someone else.
You might be turning a hobby or passion project into a business. You could be operating a side hustle or working part-time. Either way, you’ll need to make a profit. So, as well as your prices (and your competitors), you’ll need to take into account your costs and overheads.
And the most important aspect – what are you selling, and who are you selling to? It’s vital that you identify this at the outset.
Another consideration is how you will fund your new venture. Will you use your savings and bootstrap it, or consider taking out a bank loan, seek venture capital, or a small business government grant if one is available?
There’s plenty to think about.
2. Where will you work?
Will you have separate premises, a home office, a co-working space – or a combination?
If you can work from home, this will significantly reduce your overheads. However, some businesses will require premises, i.e. a workshop or kitchen. Furthermore, where you are based could significantly impact your business. Think about getting there yourself or your customers and clients visiting or finding you. Will you be in a shopping mall or a business park? These considerations will all determine how much you charge and how much money you can make.
While remote and online working has risen significantly since the pandemic, some businesses cannot be run effectively 100% online.
If you are a tradesperson, you might need to travel to other people’s homes and premises to carry out your work, for example, if you are a plumber or electrician.
3. How will you set your business up?
Will you be a sole proprietor, incorporate as a limited company or set up a partnership? Your legal structure will have an impact on how you run your business.
When starting out as a freelancer, some people start off as a sole trader (proprietor) and then set up a limited liability company at a later date.
Setting up as a sole proprietor is usually more straightforward than setting up a company, which, as well as company registration, will require a separate business bank account.
However, a company provides you with limited liability, meaning it is liable for debts or lawsuits – and your personal assets are generally protected. Also, in some cases, there can be a tax optimization benefit in operating a company and drawing a salary (and/or dividend) depending on your jurisdiction and tax position.
You should also investigate any regulatory licenses, permits, or mandatory business insurance you need to have in place, depending on the nature of your work and location.
You may want to consider seeking professional advice on this important aspect.
4. What materials do you need?
What materials do you need to perform your work or produce your product?
For example, you may require certain software, office furniture, apparel, safety gear, computers, or specialized tools if you are a tradesperson. If you have started out on a low budget, you could consider whether your tools need to be brand new or if you could use re-loved tools, or maybe even hire them as and when required.
Depending on your business, you may also need to find reliable suppliers. Finding and then building a mutually beneficial relationship with suppliers can take time – and all this needs to be in place before you can even begin a day’s trading.
Your material costs will affect your profits and cash flow.
5. How will you market your business?
Your potential customers and clients won’t know you exist unless you adequately market your business.
Marketing can be done via many channels, and you’ll most likely need some online presence. An SEO-optimized website with your sparkling new brand and compelling business name would be a good start.
But you don’t have to stop there; you can also be on one or multiple social media channels – depending on where your market (ideal customers or clients) hang out.
If you are setting up a local brick-and-mortar business or mom-and-pop shop, you could consider leafleting or advertising in local newspapers or radio stations.
How you market your business will very much depend on the nature of your business. The key is to know exactly who you are marketing to – so make sure you identify your ideal customers at the very start.
There is a well-known business saying worth bearing in mind; ‘If you are marketing to everyone, you are marketing to no one’.
6. How will you get paid?
In addition to your pricing, you’ll need to determine how you’ll get paid.
Not getting paid on time will have an impact on your cash flow.
Invoice Ninja is a leading free invoice software with a wide range of small business-friendly features to help you get paid quickly and on time.
Designed specifically for freelancers, solopreneurs and SMEs, it comes with professionally designed invoices, multiple payment gateways so you can get paid in just 1 click, client-side portals, purchase orders, quotes, recurring invoices, payment reminders, time and task tracking and lots more to ensure you get paid quickly and as hassle-free as possible.
Try it for free here.
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There are many other things to consider when launching a business, depending on your circumstances. We hope this gave you some good pointers. If you know of anyone else who would benefit from this blog post, please share it. Thank you!
