5 Things You Need to Know Before Starting a Business

Starting a new business – any business – is both exciting. And scary. If you ask all the entrepreneur you know, you are bound to hear about how starting a business is a bit like driving through a heavy fog where you are only able to see a few feet ahead. You won’t know what lies a kilometer ahead unless it’s upon you. Here are the top five of the first things you need to know before starting a business – and “navigate through the fog” better.

Write out a formal business plan.Whether or not you are proposing for external funding, a serious business plan is ideally written up, even if the business is solely yours in ownership. Mapping out your investments, forecasts, marketing strategies, etc. will prove to be quite helpful in refining your business vision. Besides that it helps you calculate the risks, you might possibly even uncover upgrades to the original plan and make amendments even before you execute the business.

This might sound trivial, but before starting your business, it would be best to think about what you are going to name it. Because you will want to make sure that you OWN your business name.Choose one with an available trademark and Internet domain name. A quick search onlinewill allow you to see if a trademark for your planned name is available. This is so all potential customers are sure to find your business and not get redirected to a similar establishment. More importantly, the failure to obtain a legal and official trademark might put your new business at risk, not to mention the time and effort you expended in establishing your business name will all be wasted if someone else actually owns the trademark.

Understand all regulations, licenses, and taxes applicable to your business.This likewise allows you to structure your business accordingly to be in compliance with the law. Broadly, you need to 1) make sure you are charging the correct amount of (applicable) tax to your business’ products and/or services and 2) obtain all legally prescribed licenses or permits applicable to your business. Launching a business in itself is not an easy process. Right at the starting line, it is ideal to make sure that no technical legality will become an obstacle to your success down the road.

Bear in mind that the market landscape is dynamic.If, say, you’ve started conceptualizing your business a couple of years back, consider how competitors, service expectations, customer needs, and applicable regulations may have changed by the time you are about to execute. Think of the marketplace and your business plan as living entities: they are both highly variable. As people in general evolve through time, so do their needs and spending capabilities. The country’s current economic state may likewise be a factor in the success of your new business. The question you need to always keep asking is “what needs to be done today?”

Do not fall into the “discount trap”.Several fledgling businesses have given in to the temptation or pressure to lower the price tags on their products and/or services just to attract customers. While gaining as many customers as possible is important, bringing them in at unsustainable prices will just prove to be disastrous to your business. Raising prices down the line can be a tricky proposition and may just cut your loyal customer base to half. Instead of slashing your prices to bargain bin levels, you will be best served by adding more value to your products and/or services to make your prices reasonable or justifiable.

In any endeavor, risks are very much present as are its rewards. Some even say that the more risks you take, the more fulfilling the endeavor becomes. Soccer coach Sven-Goran Eriksson once said, “The greatest barrier to success is the fear of failure.” Starting a business is a unique experience for every entrepreneur. Do not allow your fears keep you from traveling up the road to success. True, there is no one formula for success. But you can think of it this way: the sooner you fail, the sooner you learn what you can do better.