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Assess your business idea
Starting your own small business will require a lot of time, dedication, patience, and hard work. Most small business fail within the first 12 months of operation, which is why you need to figure out if you have what it takes to start and manage your own small business. Here are some tips that may help you assess your business idea:
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Tip # 1 - Ask for opinions
While you may think your business idea sounds great and looks great on paper, it may not be the best option. Before you go to the bank with a business plan, ask some of your family, friends, colleagues, and others for their opinion about your business idea. Ask some other businesses that are already in the industry for their opinion. They can at least tell you some of the challenges you will face when you choose to start your own small business.
Tip # 2 - Create a business plan
One way to assess your business idea is to write up your business plan. Some companies can become successful without a formal business plan, but it will come in useful when you approach the bank for financing. It also helps you determine what to do when your business goes through hard times and where you will find money to keep your cash flow positive. A business plan will help you realize your vision and understand some of the risks you will take when you start a small business. Here are some of the key things you need to review when you develop a business plan:
- Mission statement
- Target audience
- Keys to success
- Market analysis
- Break-even analysis
Answering these questions will help you figure out if you have a key audience and if your business has potential.
Tip # 3 - Test your market
One way to determine if you have what it takes to run your own business is to test your market. Create a sample of your product and hit the streets to find out what your target audience thinks about it. One way to find your audience is to use the internet. You can find white papers and other reports that provide solid information on your target audience. You can also find out more about your market by evaluating your competition to determine what you are up against. If you are creating a new product, contact the U.S. patent office to find out how much it will cost to patent it so no one can steal your idea.
Tip # 4 - Low cost options
When you are starting a small business, avoid getting large loans. Look for low cost options that can help you get started. Instead of buying brand new equipment, consider leasing it until you know your business will success. Even purchasing used equipment will save you thousands of dollars. Avoid taking on unnecessary overhead or else it will significantly hurt your business. Use online marketing versus paid advertisements while you are first starting out, this can save you thousands of dollars a month.
Tip # 5 - Patience
Don't expect your business to become successful overnight. It takes time to build a solid business and it will grow overtime. Set aside enough money to get your business through the slow times and unexpected bumps in the road. Steady growth comes with patience and a good business plan. Most executives claim that a small business will stay in operation if they can last the first 5 years. Always have a backup plan for the unexpected and look for things that could potentially impact your business. Seek out new ways to keep your business moving forward so that it maintains steady growth.
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