Before Starting A Business

Starting a business might seem an easy enough task, but the crucial consideration is whether it will be a success. For this reason, many people ask: Is it worth it to start my own business? Starting your own business requires a lot of work and can be risky. However, while there is no guarantee of success or even getting back the investment you put into the company, there are some benefits that may make starting your own company worth the risk.

In order to successfully run a profitable company, there are certain core competencies you need to keep in mind: 

* Sales - without salespeople (or at least one), sales will not happen. Sales equal revenue, and revenue is money.

* Marketing - you need to inform people about your product or service in order for them to buy it. This will require various marketing strategies and a creative team, if you don't want to pay for ad campaigns

* Finance - Without proper finances, you will not be able to pay your employees or run the business smoothly. You will also not be able to afford any big mistakes.

* Business Strategy - If you are starting a new company, it is good to know the direction you want to take it in.

* Management - If you are not a manager, or will not be hiring managers, you will need to know how to run the day-to-day activities of the business.

* Quality Control - You can't let your product or service fall apart, no matter what. Be it a lemonade stand or a thriving corporation, if you don't have quality control and work hard on it, your customers will stray.

These core competencies (and more) should be considered before starting any company.

There are several resources for starting businesses such as:

U.S. Small Business Administration (SBA.gov) 

Workforce One (Workforceone.org) 

CSU Extension Office of Global Trade and Investment (Globaltradeandinvestment@csuextension.edu) 

CSU Extended and International Programs (Extendedandintl@csuextension.edu) 

Concordia University: Entrepreneurship at Concordia (Entrepreneurshipatcnsd@concordia.ca) 

University of Toronto: Entrepreneurship at the University of Toronto (Entreprs@cee.utoronto.ca) 

University of British Columbia: Entrepreneurship at UBC (Entrepreneurs@bc.ca) 

Canadian National Railway Company

Ontario Ministry of Economic Development, Trade and Industry

Government of Saskatchewan (https://www.gov.sk.ca/OThome/Development/BusinessInitiative/StartupSupportProgram/Pages/default.aspx)

Most successful industries become saturated with competition, but some areas are so saturated that relatively few firms have ever been able to make a profit in them. Where there are few firms, the cost of entry is probably high relative to their potential gains. That’s not to say that new entrants won’t find ways to succeed – it was those that changed their business models, matched the strategy of market leaders, and shifted from unprofitable niches that became profitable.

Because many new firms fail, some enterprising businessmen have come up with ideas for protecting against this risk. They argue that a firm should consider entering a certain industry only after it has been saturated for a certain period – typically five years or more – so that ideally it cannot be disrupted by an emerging competitor. In the absence of an industry being saturated, some firms attempt to provide barriers to entry. Such barriers can be anything from patents, copyrights, trademarks, or secrecy of a new product until it becomes available for sale.

Entrepreneurs don’t often ask themselves whether the markets for their products are saturated – that is to say, whether there are too many firms competing for the same customer base. Over time, too much competition tends to drive down prices and profits in an industry. Eventually even the most innovative and aggressive firms will become unprofitable due to fierce competition.

Companies that develop business models that are profitable while operating in industries with low entry barriers can achieve sustainable competitive advantage. These companies will generate almost all their value by contributing something to the industry that other firms cannot match.

On the other hand, a firm operating in an industry where there are many firms, is usually one of the best ways to get into that industry. The barriers to entry are low and you can choose your own success. Firms with low barriers of entry should always be prepared to go through periods of rapid growth as new competitors enter and take away some market share.

Small business owners tend to pursue products and services for which they have an emotional connection. This can be a big advantage for them because entrepreneurs tend to feel their products better than the customers do. One way to leverage the customer-product fit is to find a niche where this combination is most likely to be effective.

By using your customer’s perspective, you can better understand why customers buy certain products and services. As you listen, look out for where they think they are getting value and what they believe will make them choose one firm over another. The best opportunities are those that people recognize as adding significant value to buyers’ lives and have low production/distribution costs.

Entrepreneurs should consider whether it would be more profitable for them to create or join an industry organization (such as the U.S. Chamber of Commerce) rather than risk battling the established business firms with which they would have to compete.

Entrepreneurs should consider whether economic trends (such as changes in employment or population growth, or growth in income or wealth) are propelling customers to seek new products, services, or features for existing products and services.

Entrepreneurs should consider whether consumers are interested in a product that is already being offered by companies that have captured most of the market share (a so-called blockbuster product).

In this case you can either wait for an industry trend to make it possible for you to enter with a unique value proposition, or try to create the trend that will make your entry possible.

Conclusion

It's always a good idea to read this.

Once you have a good idea, you need to turn it into a marketable product or service that will give you an edge over the competition and make your product or service an attractive choice for consumers. You may have developed your idea from observing the market, considering new opportunities, or coming up with some novel solutions. However you got it started, one of your main objectives is to get into the market as quickly as possible and gain as much market share as possible in order to make money. With time comes experience and knowledge that enable us to make better decisions in our entrepreneurial ventures.