A business can be compared to a tree. First of all a seed is planted, and then it is watered everyday for a year or so till it grows into a nice big tree with fruits and flowers. Starting a business is quite similar, however it needs more careful planning. Many people want to start a business and see it turn into a success story. In fact owning a successful business is a dream most college kids and young executives harbor. But this is where you have to face reality and understand that starting a business from a scratch is not child’s play or any sort of game. There is also a lot of difference between starting a business and making it a success in today’s advanced global market. A multitude of new business ventures fail every year because the people who start them lack strong planning or vision.
Starting a business means that you should get a clear understanding of why certain businesses succeed while others fail. You need to understand what you will get out of the business in tangible forms like market share and greater recognition, money to pay bills and to afford luxury, financial security etc. you should take a closer look at the problems that can have an adverse affect on your business and try to understand profit and loss ratio. If you identify the worse scenarios before actually starting a business then this shall work in your favor.
Before starting a business there are certain questions that you may need to answer. One of the main questions that you need to answer most importantly is what legal form will you adhere to when starting a business. Though this may sound like an unimportant question, especially if your business happens to be a small one. But what you need to understand is that the legal form you decide on affects tax payments, company investments and personal financial security.
When you formulate a plan of action before starting a business, you should come out with something original but not too whacky. It is really important to plan right. This provides you with an insight on how much capital is required, the amount of capital you actually have, what are the markets, what would be your sales plans, the niche, strength, USP of the business etc. details on implementation with future perspective on market changes should also be incorporated in the plan. An investment breakup should be made according to the salary for the team, space rent etc.
Starting a business means that you might need a loan to buy office furniture, pay overheads or loan to buy machinery. Therefore your objectives and targets must be clear. If you can achieve your goals in a business year, then profit made should be used to pay off your debts and the rest should be reserved for reinvestment in the business. This will ensure that the business is kept running. Starting a business may bring about a lot of stressful situations for you. Therefore a disaster management backup should be created in cases of emergency.
Those who plan smartly before starting a business are the ones who play well.