Starting a Business: Factors to Consider

Starting a business is a common dream a lot of people have. Starting a business in Nigeria, or any other country is not an easy task and as such there are numerous factors to consider when starting a business. There are different forms of enterprise which will outrightly affect business operations. It is one thing to know how to start your own business, but it can be much more successful when you create a business plan and you accurately outline important factors of a business plan. Sources of business finance is another important factor when starting a business. Failure to identify and effectively satisfy these factors is one of the major causes of business failure.

Here are 10 factors to consider when starting a business.

1. Table of Contents

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   Your Idea

It is impossible to start a business in the absence of an idea. The idea is what becomes the business, therefore you must consider your idea before starting a business. Your business idea shapes your business plan, location, market, capital, business structure, resources and everything else you would need to consider when starting a business. The idea also serves as a first guide when creating your business plan or starting the business. Asides this, in a very competitive market, your business idea must stand out. In doing this you must you must carry out what is called an evaluation of business idea.

2. Business Goals

Before starting a business, you must consider the goals you have for that business. This will determine the structure, operations and initial target market of the business. This is because every business move will be intentional with the hope of achieving already set goals. It is essential to map out your business so as to treat it like so. Your business aim may be to offer a solution to an existing problem or provide a whole new product entirely. These goals can also range from market reach, brand perception and more.

3. Location

The success of a business heavily dependent on the location of the business. Your business location can make or break your whole business. In considering your business location you must factor in accessibility. Think about the traffic surrounding that area, roads, and its nearness to customers, nearness to raw materials. In considering your location, you also have to think about the work space, you will need a space suitable for your business and will allow expansion, your competitors and the availability of labour in that area.

4. Capital

Business capital is one of the most important factors to consider when starting a business. This is because nothing can be developed without capital. Resources will be paid for, services will be contracted, and nothing comes for free. Seeking investors and sponsorship is one of the most difficult tasks when running a business, not to talk about starting a business. It is harder because there is no trust and the risks are greater. In considering capital you must analyse your sources of these funds. Ask yourself if you will stick to your personal savings, bank loans, loans from family and friends, equity investors and angel investors, etc. Also, the available capital will heavily determine the type of business you can start and if you can start your intended business.

5. Target Market

A business operation is futile without a target market. When starting a business, you must consider your target market. This will shape your marketing strategies and the types of products your business will offer, the price and more. Asides knowing your target market, you must consider the percentage of that target market that will patronize your business. People may like your idea but are they buying into it. You must also consider the presence of that target market before starting a business.

6. Competition

Business without competition is too good to be true. The lack of competition will make a business too relaxed. When starting a business you must consider the competition. How well they are doing, their services, strategies and more. This will help you identify a gap or gaps your business can fill and standards your business must uphold. This will allow you to break into the market as a new business and give you an edge over your competitors. The nature of some business requires them to be close to their competitors so as to enjoy a large spread of the target market, whilst others will thrive better if they have no competitors in that location so as to enjoy a monopoly.

7. Profitability

Another aim for going into business is to make and maximise profit, therefore you must consider the profitability of a business before venturing into that business. In making your business plan, evaluating your cost and profit is necessary. If the analysis reveals that the business is not profitable, there is no need for venturing into the business because it is equivalent to throwing money and precious time into a river.

8. Business Structure

When starting a business, you must consider the business structure to move forward. This structure will also affect your business plans and operation style. You must decide whether your business is a partnership, sole proprietorship, private ltd company, public limited company or a limited liability company. It is always advised to start simple with a sole proprietorship or partnership so as to be able to grow the company and gain a market presence.

9. Time Management

Timing is key. Before starting a business, you must consider time. The time it takes to start/build the business the time it takes to run the business and the best time to introduce the business. If the expected devoted time does not fit with your lifestyle and there is no way around it then that business is not for you. If the timing for the business or its product is not right then it means now is not the time to introduce the business, maybe later. Also, the length of time it would take build the business before launch will also be considered to determine if you wish to start the business at all because patience a virtue and you may not have that time.

10. Resources

To start a business, you need resources. Resources could me material, human, financial and more. You must consider the resources you need to start a business before starting that business. Resources should be accessible, available, cost-effective and more that will benefit the business. If the resources do not meet the majority of your business requirements then starting that business may not seem like a great idea.