Updated on: 14/07/2023
Starting a business has never been easier than as it is today; with digital technologies like social media making it easy for anyone to launch a business from their bedroom. But the easiness of starting a business doesn't take away the foundamental things one needs do before staring a business
While there's no definite rule on how to start a business, there few things every would be business owner need to do before starting his/she dream business. And skipping these important steps are the major causes of business failures today.
According to the Bureau of Labor Statistics (BLS), approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.
On this post, we are going to look at 4 things you need to do before starting a business. At the end of this post, you will discover the foundamentals of starting a successful business as well as the reasons why few businesses succeed and other fail.
While there many tip on how to start a business, below are the 4 most important thing you need to do before starting your dream business.
A business idea that’s based on solving a problem is the best business to have. If you want to build a successful business, look for a problem and solve it. Identify problems people are facing in their day-to-day life and provide solutions to it. This is very important because, no matter how innovative your business idea might be, if it doesn’t solve human problems; is worthless.
Think about all the great inventions in the world - ships, cars, airplanes, mobile phones, etc; they were all invented to solve a particular problem. So, before starting a business, ask yourself what problem (s) is my company or business going to solve.
Another option is to provide a better solution to a problem. If you provide a better solution or service than Google or Facebook; why not? Before E-Mail, it takes many days to send and receive letters from friends, families and colleagues. But today, it takes only few seconds send and receive emails.
Before starting a business, there’s need for thorough research about the market you want to enter. You need to research your customers, their purchase habit, their demography as well as your competitors. Researching your market and competitors will give you insight on how to approach and win. It will help you discover opportunities where you can tap into and make a difference.
Success in business begins with understanding your customers. Once you identify and understand who your ideal customers are, you will then map out strategies on how to meet them. Without proper understanding of your customers, all marketing strategies will be worthless.
You don’t have to launch a product or service just because you want to; rather launch a product that solves real human problem. You might have a great product or service, great team – but if there's no need for your product, you are only wasting your time and resources.
Also remember, customers are not interested in your product’s features; they are only interested on their goals. If your product or service will help them achieve a goal or overcome a pressing challenge, they do be happy to pay.
After researching your market, industry and customer, the next thing is to validate your idea. The purpose starting a business is to solve problem in exchange of money. Any product or service idea that doesn’t guarantee revenue isn’t worth pursuing. Without revenue, business dies.
Before starting a business, it is very important you validate if your business idea is viable and scalable. This will saves you from wasting time and resources building what nobody cares about.
There is nothing more frustrating than after spending time and resources building a product, only to realize that there’s no market for your product. Validating your idea will help you understand if the problem you want to solve is worth solving or not.
The surest way to validate a product/ business idea is to speak with potential customers. Talk to people about the problem you want to solve, if they are interested; then you have a business. But they are not; it's good as a hobby. Also validate people’s willingness to pay for the service or solution.
The world has exploded with businesses which makes it almost impossible for anyone to succeed. No matter the industry you choose, there are countless competitors going after your target customers. So the only way to have competitive advantage is to be niche specific.
Don't try to offer too many products and services, rather focus on few things you can do better than anyone else. Specializing on a particular niche improves your chances of serving the right customers. As Warren Buffett says “You will be successful until you stop trying to be good at everything”.
Many startup founders want to be like the big brands over night. This is a wrong mindset and illusive. It took Jeff Bezos many years of hard work and persistence to build Amazon to what it is today. Don’t be fooled by the shinning objects. Don’t try to do everything at once; take one step at a time.
Also, business is not about following trends, for trends will come na go. But specialization gives super power and competitive edge.
Building a successful business is easy when you follow the right steps or path. But when you fail to do your homework by identifying customers challenges, researching your market, validating your business idea, and discovering your perfect niche; building a successful business can just be a dream.
This might not an exhaustive list of all the things one need to do before starting a business, but the points listed above are most important things to do before starting a business.
Thank you for reading through.