Homework You Must Do Before Starting a Business

By Justin Griffin: May 22, 2017: Blog

 

I know that excited feeling that can come from having a wonderful idea that you know will change the world and make you a success. You know in your head this is something that people need and will buy, so why waste a single second getting it to market? However, the first thing you must do when preparing to start a business is to fight the temptation to just jump into the deep end.

Having a successful business is not about what is in your head, it is about what is in the head of the consumer. I have lost count of the number of ideas I have had that I thought were no brainers but then I struggled to get anyone to act on it. I have had the pricing amount wrong, I have mistaken my potential customers’ motives, and I have wasted a good amount of money chasing that sure thing.

I am not a patient person at all, but my experiences have taught me that you have to do the upfront research, studying, and leg work if any plan you have is going to succeed. In my own personal experience and from working with many startups, arrogance is the number one reason businesses fail.

So the moral of this story is that even if you think you have it all figured out, do a little homework before pulling the trigger. Study and research on your own, and for complex things like taxes and contracts bring in an expert. Some things you should do include:

1.   Learn how to run a business (studying and shadowing current business owners), things like:

a.   Bookkeeping

b.   Managing employees

c.   Taxes

d.   Inventory management

e.   Cash flow planning

f.    Budgeting

g.   Marketing

h.   And many more.

2.   Determine the break-even of your product.

a.   How much are your inputs going to cost and how much will you need to sell it for to make any money?

b.   How many widgets do you need to sell to make the money you want?

3.   Do research on your industry.

4.   Do research on your customer.

 

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