Launching a startup beats any nine to five office grind, but it does come with its own set of responsibilities. Before starting one, entrepreneurs should be physically, mentally, and financially prepared to take on such daunting venture. If you’re careless, you’ll join the 50 percent of small businesses that fail after five years and the rest of them that fail a few years after that, according to a Harvard Business School study. To gain firm footing in your chosen industry, here are five things you should know before launching a startup:
Who is your ideal customer? Is it the one percenters with sizable budgets? Perhaps your product or service is tailored towards the masses? Regardless, knowing who your target audience is is key to figuring out your sales and marketing strategies. Even if you have the best product on the market, you can’t force a $3,000 item on someone who has a budget of $300 for that same item category. Know the average age, ethnicity, gender, lifestyle, and profession of the person you’re trying to get to buy from you.
Customer Acquisition Plan
Knowing how to acquire customers is key to surviving entrepreneurship. If you don’t have a clearly outlined step-by-step plan as to how you are going to woo your demographics, you’ll almost certainly fail. In addition, a customer acquisition plan is usually requested by angel investors and venture capitalists when reviewing your startup for a possible investment. Failure to provide a plan for customer acquisition can raise red flags and disable you from ever finding financial backing, which ultimately leads to financial insolvency and bankruptcy.
Your employees are the most integral asset of your business. You can’t start hiring people just because they’re your friends or family members. Although it is a positive trait to form relationships quickly and make friends fast with people you just met, it can be a disadvantage when trying to build a business. Instead, bring in employees who are technically savvy, experienced in the field, and are a cultural fit to what your brand stands for. And while you can keep the business up and running by just yourself in the initial phase, sooner or later you’ll need more people to offset the increasing workload. You should vet candidates based on educational attainment and professional credentials. Look for people who have taken the next step by getting professionals to write well-designed, custom cover letters and LinkedIn profiles from https://employmentboost.com/executive-resume-writing-services/.
Interest and Passion
Passion is difficult if not impossible to quantify. No software program or books can teach you about passion; it’s something you should be feeling from the gut. What are you really passionate about? What do you hope to achieve with your newly formed business? Is it wildlife conservation? Perhaps human rights overseas? If you’re passionate about something, you’ll find that it’s easier to grow your business; if you loathe your current field or product/service, you’ll find yourself having difficulty marketing and selling anything.
Taxes and Policies
As a newly minted business owner, it’s crucial to fully understand the federal, state, and local tax regulations imposed lest incur heavy penalties and criminal charges. Identify the business structure that best fits you as this will predominantly determine what taxes you have to pay for and how you can pay them. All businesses, aside from partnerships, are required to pay taxes on any amount of cash that was received within the fiscal year. Other types of tax imposed by state and federal government include employment, excise, property, and sales tax
Before launching a business, you need to straighten these five areas out. Find and study your market, figure out how to acquire customers, determine if it’s really your passion and interest, and learn the tax regulations and policies set forth by the government. Doing these five tips can help you build your business with a solid foundation.