7 Important things to do before starting a business

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A market survey before starting a business is critical. PHOTO/FILE
Starting a business is a major decision that requires thorough research and proper planning to ensure success of the new venture.

A start up comes with a lot of risks with research showing that 75 per cent of new businesses do not make it past the third year.

To guarantee success, below is a checklist of things you should do before starting any type of business.

1.) Business plan
A business plan is crucial since it gives a clear outline of your plans and how you intend to implement them. It covers financial forecasts, strategies on sales and marketing and future goals.

A business plan is a roadmap to success showing how your start-up will succeed where others have failed and contributes largely in a financial institution’s decision to fund the business. In addition, it helps entrepreneurs to measure their progress.

2.) Funding
From the initial stages of research, to production or stock acquisition to marketing and distribution, every stage of a start-up requires finances. There are numerous funding options available for start-ups in the market.

If possible start small and self-fund your startup then look for funding when you are well established and looking to expand. A debt for a new venture is dangerous since even if the business fails you will still be required to repay it in full. Giving up too much equity isn’t good either.

3.) Licensing and legal matters
Conduct research and consult a lawyer so that you can understand the licenses, insurance, taxes and regulations that you are required to follow before you can start operations. Being in contravention of the laid out regulations can lead to hefty fines or closure of your business.

4.) Target market
The best types of businesses are those that start with an entrepreneur identifying a lucrative gap in the market. You have to be sure that people will not only like your product but they will also be willing to pay for it.

A market survey before starting a business is critical so that you can have a clear definition of your target market and your possible market share.

5.) Competition
Get to know who else is offering the goods or services you intend to provide to the market. Learn what customers like and do not like from them so that you can capitalize on their weaknesses as well as improve on what customers already enjoy.

6.) Marketing strategy
You might have developed a magnificent product but it is of no use if people don’t know it exists. Marketing is about making your potential customers aware of your new product and convincing them that it is the perfect solution, worth paying for, to a problem they are experiencing.

READ: How to market your start up without spending a fortune

Successful marketing is greatly pegged on understanding your target audience and what strategies they will most probably respond to.

7.) Adviser
No amount of research can be equated to lessons learnt through first-hand experience. Find a good mentor who has succeeded in business to guide you through the process and hold you accountable for your decisions and deeds.

You mentor should be a bold and honest person who will not be afraid to tell you the truth even if it bruises your ego.