If you’re planning on starting your own business for the first time, don’t let the statistics put you off. As the saying goes, it’s better to fail than have never tried. Skill vs. Luck in Entrepreneurship and Venture Capital: Evidence from Serial Entrepreneurs, a Harvard paper, noted that first-time entrepreneurs have an 18 percent chance for success, but by following these tips you can help increase those odds whether you plan to launch your startup in Edmonton, Vancouver, Boston or anywhere else.
Research, Research and More Research.
Before you even begin it’s a must to understand the industry you plan to be involved in. That means knowing everything about your potential competitors, no matter how unique you think your business idea is. If you can’t offer something less expensive and/or better than the rest, it’s probably time to start rethinking that idea. You’ll also want to look at your target demographic – your potential customers should be a priority. You won’t be successful if you can’t deliver what customers want.
Understanding your target demographic provides insight into their buying decisions and can prevent potential mistakes. Talk with similar business, watch your competitors and take a look at their websites. Find out what their customers are saying about them in various social media networks too.
Create a Well-Designed Business Plan.
A well-designed business plan should lay out a vision of growth as well as the steps that need to be taken to get there. It serves as an essential communications tool when it comes to attracting financing as well as staff as your business grows. Clarifying the purpose and direction of your business not only helps you to understand what needs to be done to move forward, but it will allow you to answer the questions of potential lenders and investors so that you won’t leave their offices penniless. A good business plan shows whether your business has the potential to make a profit. By including facts, figures, statistics and a detailed plan in writing you have a much better chance of getting the capital you need to get started.
It’s best to self-fund your business and then seek out funding when you have a growth story. Many people get capital through friends and family, but you don’t want to risk their savings or retirement accounts. When it’s time for financing, consider angel investors and venture capitalists. If that doesn’t pan out, then apply for a business loan through small business associations and banks.
Think About Timing.
Timing is an important part of starting a business. The best time is when you have the time to devote your attention to it, but there are other elements to consider. Your financial situation is a key consideration – how much risk can you currently tolerate? Other than personal aspects, the ideal time to start a business varies depending on the type of business. It’s a common misconception that starting one up in a bad economy sets you up for failure as certain industries thrive during poor economic conditions, although others do depend on the strength of the economy. The more important question to ask is whether your business is the best type to open at the current time.