5 questions to ask before you start your own business

Posted on Thursday, August 20, 2015

You're sick and tired of working your fingers to the bone to make someone else's business a success. You don't want to be answerable to anybody else. You want to experience the thrill of creating something and making a go of it. You have the spirit of entrepreneurship and you want to start your own business, now!

Having the spirit is all well and good, but of course, making a success of your business takes a lot more than just passion. Before you make any kind of financial commitment, you need to do your research so that you know what you're getting into and what you can expect to get out of it.

There is a wealth of information online tools, websites and apps that will help you to build your business from the ground up. But to get you started, you can ask yourself these five simple questions. If you come up with a blank in response to any of them, you know you need to give it a lot more thought before you set out to become your own boss.

1. What will my business offer that no other business does?
This is the single most important question you need to ask yourself when you're starting a business. In business speak, it's called identifying your unique selling point. If you don't have one, then you don't have a business, because there's no point in opening the doors of an enterprise that just does the same thing as everyone else.

Remember that location, an improvement on existing offerings or an ability to tap a new market are all unique selling points as well, so you don't have to come up with something entirely new just something that you have the conviction that you can sell because it's better.

2. How will I finance my business?
Getting a small business started almost always requires some funding. The first step is to approach your bank to find out about their small business financing options. If you do not qualify for a loan through the normal banking channels, ask about specific funding opportunities for women. For example, the Absa Women Empowerment Fund and Nedbank's arrangement with Khula Enterprise Finance offer funding for women small business owners.

The Department of Trade and Industry and the Small Enterprise Development Agency also have some funding programmes for women.

3. Have I investigated all the costs of owning a business?
There are the obvious costs of starting a business like property rental and equipment costs which you've probably thought of.  But there are other costs you might not have considered, such as trading licences, accounting fees for your business's taxes, legal fees, staff costs and business insurance. Don't go into the process with blinkers on; be honest with yourself about what the actual requirements, needs and expenses are. Draw up a carefully researched budget and make sure that you have some kind of plan to cover all your business expenses.

4. How will I survive until the business gets off the ground?
Since the whole point of the business should be enriching yourself, a large part of your business plan should cover how you intend to cover your personal expenses before your business turns a profit. You may have to look at ways in which you can tighten your belt instead of dreaming about the flashy new car that you're going to buy with your entrepreneurial riches. And don't count on your family to support yourself if you haven't asked them upfront.

It's extremely useful if you can keep your day job while starting your business, and only throw yourself fully into your small enterprise when your business is breaking even. Here are some tips from the Small Enterprise Development Agency about starting a business without working capital.

5. How will I market my business?
You can't just open the doors of your business and expect it to be an overnight success. Marketing is the single most important thing you can do to get your business off the ground. Make sure that you have a plan for getting the right sort of people through your doors. Whether you ask friends to hand out flyers to their friends, have a big opening party with loads of special offers or buy advertising space in your community newspaper, you need to have a plan, have the money to execute it, and be willing to change it if it isn't working.

Be cautious, but don't be afraid
There are few better feelings in the world than making a success of your own business. But success isn't guaranteed, so it is vitally important that you plan carefully before leaping into an independent venture, so that you and your business can move into the future with confidence and security.

Have you started a business?
Click here for more information on First for Women business insurance

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