5 Essential Factors to Consider Before Starting a Company

Everyone has dreamed about opening their enterprise at some point in their life. Dreaming but making it work is quite difficult in today’s context. A large number of people have been starting their startup company for the first time. Many of them are doing great, while some of them are not able to cope. Starting an enterprise is easy; making it work is difficult.

Many people start business recklessly, without any planning and effort. Never begin your company hastily. While opening a company, there involves your and many people’s actions. If your business does good, then their effort is paid, but otherwise, it brings effort and capital losses.

5 Things To Consider Before Starting A Enterprise

Starting a business involves money, time, hard work, and dedication. Before opening a business, it is always better to be fully prepared and cautious. So, there are five things that you need to know before starting a company.

1. Business Ideology

Why do you want to start a business? Business ideology is the first and foremost thing required when opening an enterprise. Before starting a business, you should consider ideas that are best for you and your enterprise. Concepts such as innovative, creative, and competitive ideas are best for a startup company. The question such as below helps you to make your business better?

• How is my business different from other people?
• What can I do to make it better?
• What are you going to sell in the market?
• What will you offer to people?

Foremost the nature of the business determines your ideas. The first step is always to determine the nature of the company that you are planning to do. There are three types of business service that you can provide to people i.e.

Service Business

Service businesses consist of professionals or experts involved or work to provide customer benefits services. Example: Banks, airlines, restaurants, transportation, and many more.

Merchandising Business

Merchandising business consists of selling goods and products. Example: Retail Store, Grocery store and many more.

Manufacturing Business

The manufacturing business uses raw materials to turn goods into final products. Example: Textile, Food Manufacturing, and many more.

2. Study of Market/ Demand

When you are sure about starting a business, a market study helps you determine your product’s demand, customer, supplier, and many more. Customers are the market kings; you will only earn a profit if you prioritize customer satisfaction. You have to understand customer behavior, product demands, supplier demand in a market.

The market survey helps to understand the following concept such as:

The present size of the market.

Nature of market

Competitors size

Target Customer buying habits, behavior.

Growth of Market

Different segments of markets.

Share of market

Research is essential in the market survey because research shows you reality and helps you understand and make the right decision by comparing records. Previously, a new startup company researched through traditional methods such as questionnaires, interviews, and many more. But nowadays it has become easier and faster.

Digital marketing has helped businesses to collect data from the internet. You will not have to go to each customer’s home to collect data. There are numerous accurate data on the internet and social media, which will help you determine your business requirement and plan.

3. Capital

Capital is always needed to open a company. After coming up with business ideas and market study, you will have to analyze the cost of establishing a business. Do you have enough capital to develop a business, or are you planning to take a loan or borrow? What type of business that are you planning to create, i.e., small scale or large scale?

Capital can be cash or non-cash. You can borrow money from friends and family, or you can take a loan from a bank. Loans are short term and long terms. If you are trying to take a loan, you need to consider interest rate, repayment rates, loan period, collateral, and many more. Long-term loans are beneficial for the purchase of fixed assets, while short-term loans for working capital.

To know how much capital is required in your business, you need to list all the assets, expenses, and money that may incur during the company. You must consider all the future costs and operating expenses so that you can picture and decrease the cost of your business.

4. Location

Location determines whether your company will incur revenue or not. It would help if you chose a place according to the nature of your business. If you are opening a retail store, you need to consider a developed area and highly populated place. Those areas may be expensive compared to other places.

If you plan to open a manufacturing business, it will be easier if you open it where you can quickly get a workforce. The manufacturing business also needs a big logistics store where you need to store goods and products. Due to which they try to find places with less cost in electricity, water, rent, and transportation.

If you have a service business, try to find a location where your competitors are located. You may have seen lots of restaurants in a single place, for a service company competition is essential and helps to increase the business.

5. Staff

Staff is a valuable member of a company. Staff is the ones who lead your company or destroy them. A large scale business requires large numbers of staff (250 or more), while a medium-scale needs less staff than a large scale, i.e., less than 250. A small-scale business has not more than ten people.

Staff efficiency increases if you give them rewards and motivation, but if your organization doesn’t benefit, it will decrease efficiency. Today hiring staff is easy; you can show an advertisement on social media pages and hire a team. But finding good and efficient staff is still not easy.

Other important things you should consider before opening a company:

Risk

People cannot open a company due to fear of risk. You have to worry about risk because all your capital and effort are involved. At the start of a business, you will not earn revenue. During the initial phase of your company, you will have to minimize the risk through research and planning. But don’t be afraid to open a business due to the fear of danger.

Technology

Technology has taken the world by storm. Nowadays, we cannot control business without technology and the internet. Technology in a company consists of plant and machinery, software which will give long-run benefits. Some of the ways to control technologies are:

Update software frequently.

Store data online and update them daily.

Backup your data.

Make sure you have a support team to repair, troubleshoot any error in the device or software.

Marketing

In the world of competition, marketing helps to enhance your business from other competitors. Marketing was popular from the beginning. The advertisement in television and newspapers helped the company to earn revenue. But nowadays marketing is mandatory as well as less costly as compared to past decades. Digital Marketing has helped to bring a change.

Conclusion

Everyone dreams of opening a business during their lifetime. For opening a business, you need to take risks and overcome it. Every company has trouble in its initial phase, but if you can reduce risk, you can earn plenty of revenue. But the most important thing that you should consider before opening a business is you need to give all your effort and time.

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