Starting A Small Business: Consider These Three Essential Factors First

So you are planning to start your own small business, that’s great; after all 75% of millionaires in United States are small business owners or Entrepreneurs ⁽¹⁾. 

Small business helps you in a lot many ways; to do things your way, gives you a rich social identity in your community, makes you feel great and at the same time brings many comforts to your life (only if you know what you are doing and doing it the right way). 

So what is the right way, the right way is when you are clear about the following three essential factors (of a successful small business) before starting any small business.

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Starting Small Business: Consider These Three Essential Factors First

Basic Know-how

• Do’s & Don’ts

Be sure that you know what you are getting into (small business), you must know the do’s and don’ts of it, if you don’t know what are the right things to do, how to do the things right then you might end up doing the wrong things, the wrong way. 

This will waste your resources (tangible and intangible) leaving you with nothing but failures.

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• Relationships Building

Relationships works as oxygen for small businesses, relationships plays a vital role in success of small businesses. If you don’t know how to connect, to link, to bond, to achieve those vital relationships for your business; and  not just that but to maintain and grow those relationships as per requirements of your business, then remember, you will never make it in a small business. 

In a nutshell you need to be relationships savvy, know how to develop and grow relationships with your suppliers, your customers and any other parties that plays key role in your business.

Having know-how of communication tools and techniques helps you a great deal in managing relationships ⁽²⁾.

And according to one study text messaging alone can boost sales by 328% ⁽³⁾ now just imagine using only this means of communication for the benefit of your small business. 

Relationships also helps you cut costs and are source of innovation (when build and maintained with academics and universities) ⁽⁴⁾ and lastly relationships development and management with customers is now considered an area of major significance. ⁽⁵⁾

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• Legal know-how

Well it depends on what kind of business you are planning to start but still every business now a days have some legal aspect to it. Patents, licensing, Zoning ordinances, copyrights, DBA certificate etc. You must know about all the legalities related to your business, so to save yourself from trouble in future.

• Target Market know-how

The more you know about them, the better you would cater to their needs and wants. And thus more satisfied they will be and consequently the more they will trust you and so the more you will earn.

Opportunity Identification & Stability

Business opportunity identification in itself is an attribute of an Entrepreneur ⁽⁶⁾. Opportunity stability means how stable this opportunity is, like is it capable of going to bring in a steady flow of profit over the long run, does it involves risk; if so then how much, to what degree/extent so on and so forth.

•  Opportunity Nature

Is this opportunity entirely new or somewhat new or old. This will help you forecast and determine the level of competition you might face, the effort and struggle you will be required to make it happen, to make it into a successful small business.

• Target Market Value

Means is it worthy, will they (target market) buy it, what makes you so sure they will, how much can you squeeze out of it. Do you have those reasonable reasons, which provides a solid case that yes this opportunity is worthy; right opportunity. 

Lastly the more you have those “reasonable reasons” the better.

Resources

This is the third and final factor, the foremost important resource that any small business requires is “Time”. To highlight its importance further, just a business plan alone requires around 100 hours ⁽⁷⁾ and an entirely new small business requires around 10 to 12 hours daily that is about 60 to 70 hours weekly. So indeed time is an essential resource for the success of any small business.  And with time you need patience and perseverance to learn, to grow.

Similarly you will need other essential resources relevant and required by your business (which entirely depends on your business model/type/nature, niche it targets, types of product/service etc). 

Feasibility, affordability, right sources of those resources should also be taken into account.

Lastly importance of financial resources can't be overemphasized, you need them to invest so that your business grow, so that your return on investment grow, so that you can beat your competitors, so that you can cash on the positive brand image you already have, so that you can strengthen your brand image, increase your market awareness etc further!

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References:

(1)   Thomas J. Stanley, The Millionaire Mind (Kansas City, MO: Andrews McNeel, 2001). Thomas J. Stanely and William D. Danko, The Millionaire Next Door (New York: Pocket Books, 1996).

(2)   Duncan, T. and Moriarty, S.E. (1998), ``A communication based marketing model for managing relationships'', Journal of Marketing, Vol. 62 No. 2, pp. 1-10.

(3)   http://www.velocify.com/resources/whitepapers/whitepaper-download/?msg=whitepaper&KW=SMS-Study&wp=102

(4)   Mosad Zineldin, (2000),"Beyond relationship marketing: technologicalship marketing", Marketing Intelligence & Planning, Vol. 18 Iss: 1 pp. 9 – 23.

(5)   Payne, A. and Frow, P. (2006), “Customer relationship management: from strategy to implementation”, Journal of Marketing Management, Vol. 22 Nos 1/2, pp. 135-68.

(6)   C.M Gaglio “Opportunity Identification: Review, Critique and Suggested Research direction,” in J. A. Katz (ed.), Advances in Entrepreneurship, Firm Emergence and Growth, Vole. 3 (Greenwich, CT: JAI Press, 1997), pp. 139.-202.

(7)   David Gumpert in Burn Your Business Plan Needham, M A:Lauson publishing, 2002.