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Reality Checks You Should Do Before Starting Your Own Business

Updated on September 20, 2014

Say you have a great idea for a business of your own that you know will make you tons of money. You may be right. And having your own business will give you more control over your life, make you your own boss, and give you the freedom to practice at any hour you like. That is the ideal picture that many people have and it’s not wrong. But it’s not the whole picture.

Being your own boss comes with its own special set of woes, if you’re not giving your business the focus, hard work and commitment it needs. There can be quite a gap between a great idea and the final startup.

The best way to find out whether your idea is workable is to start out small. Being your own boss comes with its own set of demands. The best way to find out whether you fit the bill is to try it out, on a smaller scale. And to get you started, here is a look at the reality of setting up your own business.

Are You Ready to Face the Lifestyle?

A startup is usually not a vehicle to get your rich as quickly as possible. Devoting all your time to your business will mean that you have to be prepared for quite a lifestyle change. This is especially true if you are already employed in some company. Starting your business will also only pay off in the long run, so you have to be patient and dedicated before you see the payoff. Think about it and find out if you’re honestly prepared for the long haul.

Have You Done Your Market Research?

This means that you have to find out if there really are customers who have a certain need that is not being met which you can meet. You may think your idea is brilliant, and you may even have customers who like your product. But unless they have a genuine need for it, they are not going to be buyers.

Also, you have to find out if these customers have the money to pay for your products or services. It may happen that people who need the product you are selling may not be able to afford it. If you’re starting out in a well established sector of the industry, then talk to professionals who are already working in the industry. You will be able to better learn about the hidden challenges from their experiences.

Take a look at third party market research papers and studies that you can trust to find out if there is a growing market for your product or services. Follow national and international market research firms for the best data. Some companies that you can trust on this include Forrester and Gartner.

Do You Have Too Many Competitors?

It’s always best for business if you are able to find your own niche. This means that you are providing a product or service that innovates and provides a solution to needs that have scarcely been met. But if you have too many competitors and the market is too crowded, then your business will have a much harder time gaining a foothold in the market. You can find out how crowded the market is by doing a Google search for the problem. If there are ten or more other companies who are already offering the solution, then it may not be worth your while to continue.

Are There Hidden Costs With Your Solution?

Many great ideas bite the dust because of too many hidden costs. For instance, you may have a great idea for methane-run automobiles, but there are too many dependencies involved, including finding service stations and red tape issues. You should be able to understand all the marketing requirements, costs, sales routes and other social and cultural issues before you set out selling your stuff.

Create a Business Plan

After you’ve decided that your product will sell, you need a business plan. This should include everything you need to do keep yourself focused. Look up online resources to find out how to write a business plan.

Register Your Business

You will also need to get your business registered and receive a business number. You will also need to open a bank account, set up a business phone line for clients to contact you, obtain insurance, council approval and also look into zoning regulations. You will also need to understand the legal and tax obligations.

If you have the above steps covered, you should have a good foundation for a startup. Just talking about a business doesn’t get it started. Be realistic, remain motivated by your idea, and you can begin to pave your way for a successful business.

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