So, do you think starting a business is hard? Well, it turns out that starting and successfully running your own business is more complicated than most people expect says Peter Decaprio. According to the Small Business Administration, as many as 70% of new businesses fail within the first five years of operation. However, you cut it, those are pretty grim odds. Fortunately, some industries have better survival rates than others, or they require less capital to get started up. Here are some tips that will help you start your own business successfully:
1. Industry
The first thing to consider is the industry that you are going into. Different industries have different chances of success, so it’s essential to pick an industry with a high probability of being profitable. For example, businesses in the restaurant industry tend to have higher failure rates than those in other industries. This doesn’t mean you shouldn’t open a restaurant, but it does mean that you should be extra careful with your budgeting and not expect things to work out right off the bat. You might even consider getting some experience working for another restaurant before starting your own place. Another option is consulting or freelancing with companies on their marketing campaigns, website development, SEO optimization, etc.
2. Product or Service
After selecting an industry, it’s crucial to choose the specific product or service you will offer. In general, cheaper and easier-to-produce products tend to be more successful than expensive and complicated ones. For example, a small mom-and-pop store might have a better chance of success selling t-shirts than they would sell luxury handbags because it’s much easier to print a design on a t-shirt than sew together a leather purse.
3. Pricing
Peter Decaprio says, pricing your product or service can be one of the most challenging parts of starting a business because there isn’t really an exact science to determine what price you should charge for your goods or services. One way to start is by looking at similar products and services in the same industry and seeing what they charge. This can give you a rough idea, but in reality, there are a lot of factors that go into how much to charge for your product or service.
Peter Decaprio says you’ll need to consider how much it costs to produce your goods or services, how much effort it takes to generate your revenue, and other things like supply and demand in your market. If you’re concerned about not charging enough, you can always start with an initial low price point while gaining experience before raising the prices to be more competitively high.
4. Capital
In general, it’s easier to incur start-up expenses when starting a business if you have some capital saved up. Having a financial cushion will allow you time to work out any kinks in your plan and have a little bit of room for emergency expenses if something unforeseen happens. This isn’t to say that you need a lot of money to start a business, but it’s definitely more manageable when you have some capital available.
5. Location
Another vital thing to consider is the location of where you’ll be starting your business. Businesses tend to do better in large cities or high-traffic areas because there are more people available in select locations that make up an excellent demographic for your product or service says Peter Decaprio. Depending on what kind of business it is, this can make all the difference in whether your target audience will be able to find your store easily enough to warrant making purchases from you instead of your competitors.
6. Licensing and Permits
Before you start your business, it’s a good idea to look into the necessary licensing and permits that you’ll need to operate in your state or country legally says Peter Decaprio. For example, some countries may have strict copyright laws protecting brands from being copied by other businesses. Hence, they require official documentation before receiving authorization for a trademark name or logo. To comply with local laws and protect yourself from legal issues, make sure you research all of the relevant information about what licenses and permits you will need before starting a new business.
7. Financial Record-Keeping
It’s essential to keep track of how much money is coming into and going out of your business because this can affect your tax returns, business credit score, and more. Start with, get yourself an accounting software package that will allow you to keep track of your finances efficiently. Most paid software packages come with a trial version, so you can try them out before deciding which one is best for your needs.
8. Product Design & Development
After selecting the industry and product or service to offer in your new business. It’s time to consider how you’ll design and develop it. Your options include hiring someone else to do all the work for you (which can be costly). Doing everything by yourself (usually less expensive but may take longer depending on available resources). Or splitting the work between multiple people (also usually less expensive than hiring professionals but also may take longer). It’s essential to plan out how to design and develop your goods or services because this can affect everything you have to do for your business. For example, if you’re designing a physical product, you’ll need the right equipment and supplies as well as a secure location in which to work on it.
9. Promoting Your Business
Even the best products and services won’t bring in customers without any effort put into promoting them. There are many different ways to promote your business, from social media to advertising on TV or radio broadcasts. The promotional methods that would work best depend entirely on what kind of product or service you’re providing. So no set way works for all businesses. In general, though, it’s crucial to have a strategy for promoting your new business. So that you can get people interested in what you have to offer.
10. Retail or Online?
Select whether you’ll run your business online or have a retail location. Also, it depends on the kind of product or service you’re offering explains Peter Decaprio. For example, an online course is easier to provide than one-on-one tutoring sessions. Because everything has already been done for you. And it’s simply a matter of making it available through the internet. On the other hand, if your service requires personal interaction with customers. Running a retail store would probably be more efficient than selling everything online. Since people can’t buy something without interacting with someone in person. It’s best to keep these issues in mind as you decide how to start your new business.