 Medium

9 Indispensable Factors to
Consider Before Starting a
Business
Almost every individual dreams about starting his own business.
Yet only 4% of the newly started businesses manage to reach the 10
year mark.

In fact over 50% of the small businesses don’t even make it to the
fifth year. Most people have no idea about the various things to
consider when starting a new business.

It is just a desire to be on top of things that motivates many to start

businesses. They have no idea about the money that is required, the
hard work that they have to put in, the knowledge and the
experience that they have to gain, and the kind of patience they
need to have, until their business reaches up to a certain level for
them to break even or make profits.

‘Well begun is half done’is what they say. So if you want to start
your business, you have to get all the things needed to start a
business.

Here is a checklist that will give you a list of factors to consider

before starting a business:

1. A Business Idea
2. Knowledge or Expertise
3. Market or Demand
4. Start-up Costs
5. Capital and Finance
6. Competition
7. Location
8. Staff
9. Technology
10.
1. A Business Idea
Every business starts with an idea – a super duper idea that actually
works. If you want your business to stand out, you will need to
offer something that no one else has offered till date

That said not everyone can come up with a unique business idea .

There might be hundreds of businesses just like the one you are
going to start. Yet you can make it better by answering the
following questions:

 What do I need to do to make this better?

 What is it that I can do better than what the other guys are doing?
 Will I be able to grab some market share in this category?
You may have a great business idea; but unless it solves someone’s
problem it is not going to work. So start by listening to frustrations
– both of yours as well as others (your family members, your
neighbors, your friends, and your associates). Once you have
understood these, here is what you can do:
 See what best you can do to address these frustrations.
 Identify the skills in you that will help you offer the right solution.
 Find out if you are actually passionate about offering that solution.
And Voila! You have your business idea.

2. Knowledge or Expertise
Once you know what business you want to start, you will have to
start gaining the required knowledge and expertise to start that
business.

This might take a lot of research and planning; but at the end all
these efforts will ensure that you have everything in place to get
your business idea off the ground.

Having a business plan can be highly advantageous at this stage. It

will tell you whether your business has a place in the market and if
the idea is worth or profitable enough to go ahead with.

If you have the knowledge you can construct one, all by yourself. If
not, you can always hire a professional business consultant to do it
for you.

Meanwhile you will have to continue with your research to keep

your knowledge up-to-date.
Recommended:  Never Compare Your Beginning To Someone
Else’s Middle
3. Market or Demand
Once you are sure of starting your business, your next step would
be to explore the market or the demand for your product or service.

Start by answering the question, who are your customers. If you are
selling your product or service locally, you may have to assess the
demand for it. In case you are taking up on an international level,
you may have to understand the rules and regulations of dealing
internationally.

A market survey should reveal all the details that you may need
about the market for your product or service. Basically you are
looking for:

 The current size of the market (the approximate number of potential

buyers)
 Its growth potential (whether it is likely to grow in size or contract)
 The market share that you can expect to take
 The buying habits of the target audience (and how to exploit them)
 The different segments of the market
 The kind of margins that you can expect from the market
Thankfully social media has made it possible to reach out to target
audience, anywhere in the world, without having to put in too much
of efforts.

4. Start-up Costs
Estimating your start-up costs is one of the very important things to
consider when starting a new business. You will have to assess the
total cost that is required to set up and run your business
successfully.
If you are thinking of starting a manufacturing plant, your start-up
costs could be very high. You may have to think about the cost of
the land or building, setting up the plant, buying the equipment and
machinery, investing in furniture and office equipment, and various
other things.

In case of a retail business, you may still need to think of the cost
of the store as well as the furniture required to decorate it. An
office can be started with relatively lower cost since all you may
have to invest would be in furniture and office equipment.

Once your business is set up, you will have to think about the
working capital needed to run your business.

You will have to take into account the inventory that you need to
maintain, the credit that you can extend to your customers and the
supplier’s credit that you can get.

In not all cases can you expect credit to be given by the suppliers,
especially if you are a new name in the market.
5. Capital and Finance
No business in this world can run without money. Depending on the
type of business you are starting and the initial costs that you will
have to pay up for, you will know what kind of capital you would
need to start your business.

Whatever steps you take, to finance your business, you will have to
make sure you have the required funds to take you through the
startup phase.

The financing pattern is one of the most important factors to

consider before starting a business. This generally includes the
capital that you can introduce from your savings as well as the
funds that you can borrow.

Personal savings are what 77 percent of the small businesses  rely

upon while gathering their initial funds. But you can’t really go
over the board if you cannot fund your entire business.

Funds can be borrowed for business , either through short-term or

long-term loans. Nevertheless, you may have to keep in mind the
terms and conditions of borrowing such funds including the cost of
borrowing, the rate of interest, the repayment terms, and the
security that is required. Approach a few banks and private lenders,
get a few quotes, and compare them to identify the most beneficial
type of funding.

It would be ideal to go for long-term funds only if you have to

purchase any fixed assets. For working capital requirement short-
term funds would be sufficient. This way you can make sure they
are paid back once your business starts progressing.

Recommended:  Shape Your Own Destiny

6. Competition
Unless you know who your competitors are and what they are
doing, you will not be able to survive in the market for long.
If your product is a monopoly competition will not matter. Else,
you will have to come up with an excellent strategy to fill in the
demand and supply gap.

Gaining a market share should be on top of your mind if you are

about to start a business. If there is a huge demand for your
product, this shouldn’t be too difficult. If not you may have to
strengthen the position of your business to gain an entry into the
competitive market.

Analyzing competition  includes getting to know your competitors,

figuring out how they have positioned themselves, identifying their
pricing and marketing strategies, and evaluating their strengths and
weaknesses.

Once you have all the information it is all about conveying your
unique selling point to your target audience. If you can do this well
you will survive no matter how tough the competition is.

7. Location
One of the most important things needed to start a business is a
good location.

If yours is a retail business you will have to look for a well-

populated area that is easily accessible.
Source: commencebusiness.com

If it is a manufacturing unit you can choose a location that can let

you save money on electricity, water, taxes, and transportation.
Look for a place where manpower is easily available and raw
materials can be sourced easily. You can even look for a location
that can get you rebates and subsidies from the government.

If yours is a niche product or a service, you may have to look for a

single location where all your competitors are. For instance, if it is
a software company you want to start, you may have to look for a
software belt where all other software companies have set their
shops. Similarly, the ideal location for a gold vendor / jeweler
would be a gold mart that has housed many such shops.

Offices can be set up in any place that is accessible and offers good
facilities such as parking spaces, refreshments, transportation, and
so on.
Make sure the location fits well within your budget and offers
scope for expansion. An ideal location would be one that
complements your business in the best possible way.

8. Staff
Your staff members are the ones that can make or break your
business.

Without efficient manpower no business can ever succeed. That

said an efficient staffing strategy needs to be in place if you want
to reduce your staff replacement expenses.

You can hire a recruitment agency or use various recruitment tools

to fill in your positions with the right talent.

There are also a number of websites that make it easy to find the
exact kind of people you are looking for. Signing up for a couple of
these can make your job, both easy and cost-effective.

Apart from hiring the right staff there is also the training that you
need to think of. This will ensure your staff members will be in a
better position to handle their responsibilities and meet the
expectations you have set for them.

Finally you will also need to think about paying their salaries and
perks to keep them motivated enough at work.

9. Technology
Technology is one thing you can never compromise on when it
comes to starting a new business in today’s world.

Whether it is office equipment, plant and machinery, or the

software required to monitor your business, you will have to make
sure it helps your business to perform well in the long-run.
Here are a few steps you can follow, while choosing the right
technology for your business:

 Assess the requirements of your business

 Make sure the technology you choose helps in making things run
smoothly
 Consider leasing technological equipment if you want to stay up-to-
date
 Always have a backup plan
 Make sure you have the required support for installing, upgrading, and
troubleshooting the technology that you choose
 Invest in training so that you can make maximum use of the
technology
Bonus Factor: A ‘Can-Do’ Attitude
When trying to start a new business you may see a lot of doors
getting slammed in your face, a lot of people trying to shut you
down, and a zillion cant’s and don’ts from all over; but with a ‘Can
Do Attitude’ you can rise above all of it.

Dreaming big is not the only thing needed to start a business. You
will also need to believe in that dream and work towards achieving
it with an excellent business strategy.

Apart from the above factors to consider before starting a business,

there is another one that seems to be very important – web
presence.

In fact every business can benefit from web presence , whether it is

a website, a social media page, or an online brochure.

Today there are many websites that offer all the tools and templates
that you would need to create your own site within minutes.
But if you have the funds, it can be extremely beneficial to get a
professional web designing company to do up your website for you.
For all you know they may also have an SEO expert  who can help
you save a lot of money on marketing your business.

BBALE MUBARAKA
Founder - Chairman, The islanders sttioners Uganda limited

Who am I?
The name that was given to me and a few designations after that.

But here’s how I define this ‘who’-

The one who is still unsuccessful in breaking the myth, “truth is
only that which I have understood”.

The one who finds joy in coming across the perfect ideas through
बातचीत.

The one who struggles to improve his net game on the tennis court.

And the one who wants to ‘Just Be’.

Just be present with full absence & be absent with full presence.

That’s who I am.  

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