So, the time has come for you to leave the nest to become an eagle in your own right. You have seen the mountain and you are ready for the climb. Opportunity has knocked and you’re putting on your robe to answer the door. You’re convinced. You’re ready to take the leap of faith and start your business.
First of all, CONGRATULATIONS! You are about to join the long list of pioneers and trailblazers who wrestled the reigns of commerce to grant them success beyond their wildest dreams. If you’re anything like me, you will read on because unlike the majority of thought out businesses out there, I was brought into the market place by demand for my talent instead of a planned entrance into a market. You would want to consider a few things to make sure that when you start your business you’re riding a healthy steed into the sunset, instead of riding a stubborn mule down a slippery slope.
Market Demand – Knowing the size of your market helps you to determine the “room” your company has to grow, giving you its income ceiling and economic climate right out the gate. Is it a million dollar or billion dollar market? How much money is spent on your service per year? You can make comparisons between the U.S. and Global market.
Income Potential – Within your market, determine how easy or difficult it will be to become and remain profitable. Are you in a volume business? Is it seasonal? What factors affect your increasing or decreasing income potential?
Competition -Who is also doing what you are doing? How close are they to you? How similar / different are your services? Your competitors aren’t always your enemies. They can be partners in joint ventures, allies when lobbying against industry-wide threats, informers of market trends. However, your company should have an edge a competitive edge where you are clearly distinguished from your competition.
Problem Solved – Your company was created to solve a problem. What problem do you solve? What is your solution? What makes your solution unique?
Ease of Entry – It’s almost impossible to start a business without some upfront costs involved. Rent, insurance, utilities, business class services, inventory and government regulations all require money to be paid out before the first dollar hits your bank account. Ever business owner has to pay their dues. Knowing the ease of entry tells you just how much yours will be.
Exit Strategy – It may seem kind of premature, discussing exit strategies before you even start up. It’s not. Knowing your intended exit plan will help you know how to groom your business. The structuring might differ depending on whether you are seeking to franchise, pursue a licensing agreement with larger companies or to be purchased by a larger competitor in the future. You may choose to have a family member succeed you to keep the legacy going. Either way, have a plan for your retirement.