9 Crucial Steps To Decide Which Business To Start As A First Time Founder
Which business to start? A dilemma faced by all founders, yet, to set the record straight, I would say entrepreneurship really is for the brave! It is a nerve-wracking and a gut-wrenching move in one’s life and career that can make or break them. Everyone is willing to put that extra time and go that extra mile to succeed, but the point is, will they?
Does hard work guarantee success in business? Does perseverance and grit to establish your business makes the journey worthwhile? Does having a creative small business idea or a solid business plan ensure that you would be able to rub shoulders with the biggies in your industry?
So many questions, yet no clear answers and rightly so, because entrepreneurship is just that – unclear and unpredictable. A business can be a sinking ship, an eagle in the sky or a phoenix rising from the ashes. It can be victory and vindication or can be something which makes you lose your everything, even your own self in the process.
Not to scare you, but just like you require a strategy to ace your game, a business is no different and you absolutely shouldn’t dive into it unprepared. And the first step in the process is deciding which business to start.
However, if in case you are reading this article, I assume you are looking for guidance on which business to start & how to start it, and that you shall get here.
Stay tuned & keep scrolling to learn which business to start and ways to make it profitable:
1) Why do you want to start a business?
There are both right and wrong reasons to do something. So, is your reason to start a business the right one and equipped with the right mindset or is it the wrong one, which could mean doing it so you can be called an entrepreneur, a startup guy or because you just want to get out of your mundane job and be your own boss?
However, you must know that being your own boss requires a lot of blood and sweat and a startup mindset. Scalability, innovation and disruption are all essential tools of a business and if you don’t understand them properly, you are not fit to be one. However, everything has a silver lining and so does entrepreneurship!
You can start a business for myriad reasons as well, like:
a) You see an opportunity by discovering an unutilised idea which is groundbreaking or which serves the society’s needs in any way.
b) The idea is unique and can deliver value to its customers and who are ready to pay for it
c) Your idea has been validated by survey or market research, meaning there really is a need in the market for the product/idea you propose
d) You enjoy taking on challenges and seeing them through, come what may
e) You have the necessary resources at your disposal and relevant experience
Remember, your new business would initially be small and it would still be relatively hard to have it generate profits and grab a piece of the local market share. Technology can help scale your business, but ideally, it will be your business model which can make your product or service look lucrative to your customers.
2) Money vs Making a difference?
Let’s face it, as ideal as it sounds, not everyone can be altruistic and give their days and nights to fight the system or a social cause. Putting it across unabashedly that most businesses are started by founders with a sole aim to generate money.
However, Catch 22 here is that if you are in it ONLY for the sake of money, you will reach nowhere. Really, if you are in it only for the sake of some easy money, you would never be able to scale your business as nothing worth having comes easy.
A report by the Entrepreneur magazine says 50% of small businesses fail in the initial four years and 90% of them don’t make it, and the ones that do have to go through some real harrowing experiences to get the fruits of their labour. The bottom line is, your business needs to solve problems so as to sustain while making you money on the side, if not immediately, then in the near future.
3) Determine if there is a market for your product
So you have probably stumbled upon a list of business ideas that you feel would capture both people minds’ and wallets or tapped potential for a service which you think could come of good use to people.
But before you go into the high gear, you must do thorough market research to check the viability of your idea. Many first-time founders ignore this advice, however, market research is really an investment in the future and can make your product a winner in the market.
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4)Which business and where?
Needless to say, the kind of business you do and where you do it is of paramount importance. Operating the wrong business is a mistake many entrepreneurs unintentionally end up making.
You cannot start a business you have no knowledge of just because someone else is making money while doing it. Given below is a checklist to follow to know which business to start and what would best suit your aptitude and skill set:
1) The first thing to do would be to take your own sweet time to do adequate research and find out which business would be just right for you, instead of rushing the process and going in all guns blazing and end up losing it all. Time is important, yes, but it is important to plan wisely and know the benefits and pitfalls of any business for success.
2) You should know your numbers. There are many businesses which require an initial small investment, yet, there is a wide range of businesses which require no money at all. Figure out any business like that, especially if you are a fresh graduate.
3) Do not take up a business which is too challenging for you at this age and stage of your career. Do not try to eat more than you can chew. Remember, a small hurdle can be overcome faster than a giant one.
4) Try to identify a business idea which can give you a long -term economic potential. Like the famous Wayne Gretzky says, “Go to where the puck is going, not to where it is.”
5) Error of omission can be a heavy mistake when deciding on a business. Error of omission simply means you made a mistake that consists of not doing something you should have done or failing to see an opportunity that is right in front of you.
6) Field experts generally tend to fare well in a business done in their area of expertise than non-experts. It is a rule written in stone and intangible. Because really, you wouldn’t enrol into a Data Analytics course if you suck at math or go for an eye test to a physician rather than an ophthalmologist. I rest my case.
7) Try and start a business which has the bandwidth to always thrive, rain or shine, in today’s and tomorrow’s market. It should be a business which cannot be gobbled up by a big fish in the sea in future.
8) Focus on ‘consumer monopoly’ for its’ long term predictable growth prospects. Notably, this advice is doled out by the most successful business picker in American history, Mr. Warren Buffet.
9) You must avoid commodity business where you have to compete on price and have to be the lowest priced item in the market to survive. As Mr. Buffett has said, “In a commodity type business you’re only as smart as your dumbest competitor.”
10) If considering manufacturing a product, do take care of the pros and cons of contracting out production to a low-cost supplier. In other words, operate a “hollow corporation.” A “hollow corporation” is a company which subcontracts manufacturing and packaging.
11) Last but not least, bet on a business you know about instead of the one you don’t!
5) Full-time vs Part-time
Many entrepreneurs, who first decide on starting a business, try doing it alongside their full-time job which is known as a moonlighting business. Moonlighting refers to the practice of working a second job outside of your normal work and business hours, meaning an employee can do his regular 9-5 and work nights on a part-time job or project in order to earn some extra money.
Some organisations allow it while others have strict laws in place forbidding it. In such cases, employees would need to check with the organisations they work for about any federal laws or any agency regulations they might have regarding two jobs.
Also, there are pros and cons to moonlighting, yet, the former trumps the latter. Moonlighting lets you keep your job in hand, helps you pay your bills and also avoid burning bridges. You only need to manage your time properly and compartmentalise your job and business to two different parts of your life.
You can also go for a different sector altogether than the one you are working in for your full-time job so it is more appropriate for moonlighting, like real estate, marketing, real estate and more.
You should, however, avoid working on your moonlight business idea while at work since it is unfair to your employer and equivalent to cheating. You should also not try to compete with your boss as it could backfire and try to avoid any conflicts as well. Burning out can take place as well as balancing two jobs can lead to over exhaustion, so choose wisely.
There is always room for improvement when it comes to operations, regardless of if you are a new entrepreneur or a veteran. Before starting a business or deciding on which business to start, you should first evaluate the kind of operations you can handle.
Whether you can handle and afford to have too many people around you on the ground, or if a partnership would suit you and your business, or would you be comfortable with a more tech-oriented business which can be done from the comfort of your home with a laptop and a wifi connection. Again, this depends on the kind of business you decide to launch.
7) The ‘Capital’ dilemma
Again, you do not need to worry about capital for your business if you do not have any money saved because there are a lot of businesses which can literally be started from scratch. If you are a student or a fresh graduate and don’t have an uncle with deep pockets, fret not.
If you are confident in your ability and idea and are ready to pivot, differentiate, grind it out and sweat, your product will sell or receive funding from other sources.
You can also enrol into an incubator or find an accelerator with some effort, or have a crowdfunding platform gather funds for you. The options are plenty, and having no money is no excuse to not start a business.
8) Get Feedback
Oft times, we get biased towards our idea/initiative/business and ignore any potential flaws that they might have. However, when thinking of starting a business, one needs to be highly objective and look at their own product or service through the tinted glasses of the world.
Your first customers would be your own set of friends and family, so outline your business idea and pitch it to them because they trust you and vice-versa and are your biggest admirers and worst critics. Especially seek assistance and feedback from friends and family in the same business as the one you are trying to start since their expertise would help you go a long way in your business.
Don’t keep it a one-way or one-time communication, instead, ask for their feedback from time to time. Adapt to the feedback to constantly improve and stay relevant. Some advice, solicited or not, would be good and some would be bad. However, you must look for the grain of truth and seek out patterns in comments.
In all likelihood, if you keep hearing the same comments, they might as well be true and you must notice them. Also, be proactive in asking questions as to why someone didn’t like your idea, what can be improved upon and better solutions.
9) Build a great team
They say your team is more important than your business strategy. Why? Because you need people who are faster and smarter than you. Also, while you pitch your ideas to your friends and family, learn who all are interested in your venture and would like to hop on to your boat because working with friends can be rewarding, yet would have its own challenges.
However, while deciding on your team, try to not exclude newer team members while talking business – that’s just shooting yourself in the foot.
Just in case you decide to work with your friends, take a more collaborative approach to make everything feel natural. Have the tough conversations early, take in new perspectives and keep the ball rolling every single day.
Businesses are not democracies where you can share and compromise with your friends. Recruiting the right people is of paramount importance to your business and the principle of ‘first who, then what’ should be applied in this case.
Remember, an initial great team can work wonders for you and also take care of a lot of problems which appear in early-stage businesses.
Just like they say about life, that no one ever gets out alive, the same can be said about entrepreneurship. You can never really rest on your laurels, so you must keep researching the market, hire good people, make a superior product and build your empire, one day at a time! I am sure this article would help you, if only a little, to guide you about which business to start. Good Luck!
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