Key Considerations When Starting a Business

Consider Scaling Down and Pilots

I know what it’s like… you have a fantastic business idea, you see the potential, you see how great it can be, and you want to put in all you can to make that vision a reality. While this is the only way to go for some business concepts which are pretty much, ‘Go Big, or Go Home,’ this isn’t always the case.

Where it’s possible, consider the option of scaling down, and testing the concept. This will allow for you to start up, while saving money, learning from the pilot and being able to action changes, and raise more funds based on proof of concept. This approach not only reduces start-up costs but provides valuable insight around the business, in real terms. It may not generate much profit, but it will offer a wealth of verified information that will help you to determine the next steps… If you decide to proceed with expansion, it is a great basis for second stage funding.

Consider Realistic Timelines and Pricing

Part of calculating your start-up costs will involve figuring out your initial cash flow. Without having actually operated the business this can be tricky. It’s also not uncommon to fall into the trap of under-pricing products and services in order to stand a better chance of competing, and to ‘tempt’ in more business. Be aware that you don’t necessarily need to do this. If you do, raising prices to the market standard could become difficult at a later stage, and you’ll have to do a lot more work in order to break even. My advice- recognise your worth, and price it accordingly.

Consider a Realistic Time-frame for Starting-up

Time is always potential money, and when you’re starting in business, this is true even more. If you’re going to have fixed costs like property leases, if improvements or modifications are required prior to opening this impacts on both time, and money (quite directly). These additional costs add to your start-up costs, but also add to the time before you can start earning. Don’t fall into the trap of under-estimating when you’ll be ready to trade, and build in a good time cushion before you ‘need’ to see funds coming in from business activities. Failure to do so could result in a significant amount of stress, and in some instances, can even result in a business shutting down before it’s even had the chance to take off, simply because there wasn’t enough time allowed to give it a chance to get going.

Consider the Cost of Money

Many entrepreneurs who have a great idea that they believe strongly in, will make the decision to finance the business themselves. At times, this can be at great personal cost, using the credit on credit cards or loans, and tapping into equity from homes etc. While for some smaller ventures the impact may be negligible, for larger ventures, self-financing should be considered exceptionally carefully before committing to this option. If funds are in abundance and potential delays, changes, etc. will have little impact and will be offset by the return, however long it may take… then go for it! If this is not the case, and any delays and progress are not going to plan will cause a great deal of personal and financial strain that could jeopardise business success anyway, then definitely consider other options.

Starting a Business After 50

Throughout his life, Mahatma Gandhi demonstrated how to fight for a cause in a nonviolent way. One of the most important acts in his quest for Indian independence occurred in 1930, when Gandhi was 61.

Kroc, the guy responsible for all the McDonald’s in the world, began his venture at the ripe age of 52, despite battles with diabetes and arthritis. Seven years later, he convinced the brothers to sell out their shares, and he became the owner of a franchise that would sell more than a billion hamburgers by 1963. Kroc continued to be involved in McDonald’s operations until his death in 1984.

Grandma Moses never had any formal art training — indeed, she’d had very little formal education at all — but she painted every day, turning out more than a thousand paintings in 25 years. She had no experience or education in paining, and didn’t being painting until the age of 76.

One of the oldest success stories is The owner of Kentucky Fried Chicken, Harlan David Sanders, well known as Colonel Sanders. He was 65 years old when he started Kentucky Fried Chicken. KFC was a brand new business idea for him. In his youth, Sanders worked many different jobs from farming to steamboat pilot, to insurance salesman.

When he turned 40 years old, he started a service station and sold chicken dinners to his patrons. Over a number of years he developing the way he pressure fried the chicken, yet he didn’t decide to actually start his own business until he received his first puny social security check for under $100.

And what about his patience and perseverance? Get this: Old man Colonel Sanders solicited over a thousand restaurant owners to try his chicken recipe in an effort to start his business. And, after persevering 1009 rejections, he finally received his first “yes” and his chicken business had been launched!

This is the kind of perseverance it takes to start a business that soars to success.
Some people think that it’s even harder in today’s economy to start their own business. However, contrary to popular belief, a tough economy makes it easier. In fact, there were more successful businesses launched in the great depression than ever before.

Business From the Ground Up

Identifying major resources needed for a startup
There are three major resources to consider before you start Time, Money and Skills. They are the foundation of every business endeavor. By being aware about what resources you have available, you will increase the chance for a successful start up and build a viable business. We will look in detail at each of these resources in subsequent articles.

I already have a great idea that want to make it into a business
If you already have an idea and your hands are itching to try that is great! However, you may save time and resources if you are being methodical and identify what you have available to you before you jump into a startup. It should not take weeks or months to understand how much time and money you have available to you and what are your business strengths and weaknesses.

I want to start a business but do not know what type
Do not disappear if you decided to start a business but have no viable idea. Sometimes we want to start a business but do not know what type. Before jumping into any prepackaged business idea, think about the major resources you have available to you first. We the humans are creative bunch and always find solutions. Need to train your mind to look for potential business idea fitting the available resources. It may take some time and effort but it is worth trying.

I am afraid that some will steal my idea
Often I meet entrepreneurs worrying that their ideas may get stolen. They are reluctant to share any basic information and are overly protective. If you think that you can produce only one idea in your life you are better off not starting anything and keep your job. The odds that the first idea will be a hit are very small. The world is full of not realized brilliant ideas. Only materialized ideas make a difference.

Start Up Business Credit Cards

1. Not As High Risk As Investment Opportunities – It can be extremely difficult to have a venture investment company agree to providing capital for your business. The nature of your business, competition in the immediate area, and previous business ownership all have to do with the approval or denial of investment funding for your business.

Luckily, most small businesses are not considered high risk to lenders, even if the business is only in the beginning stages. It is a lot easier to be approved for start up business credit cards than venture investment capital.

2. Organization Of Records Is A Lot Easier – When you obtain start up business credit cards, you are starting off on the right foot because you are able to take strict measurements from the very beginning to assure the security of your business finances. Start up business credit cards are a great way to save all bank slips and purchase receipts to document all spending coming into and going out of your account.

3. You Do Not Need An Accounting Department – If you contain one or two start up business credit cards, you are more than likely able to handle all of the accounting aspects on your own. You will have one statement on a monthly basis, and if you pay off your balance in full every month, you do not have to roll anything over to the next month. You start fresh each month. There is very little paperwork that needs to be completed for your start up business credit cards. How wonderful is that?