Have you ever thought about starting a business? What has prevented you from doing so? What drives you to the idea of starting a business? If these are questions that you find yourself asking or being asked, then the call to start a business may be tugging at your heartstrings. However, it is often difficult to understand where to begin. If you find yourself asking the question; “why should I start a business?”, then this article is for you. I want to see you succeed in understanding your aspirations and using the tools of business to breathe life into your personal and professional dreams.
Reasons to Start a Business
The “why?” of the equation. What reasons do you have for wanting or needing to start a business? No successful business has ever been founded because someone just wanted to earn a lot of money. The why is the most important part of the process by which one has an idea for a business and in which they put that idea into action. Here are some of the most frequent “why’s” of starting a business that I see in everyday life.
To Support Family
Settling down and starting a family with someone is one of the most beautiful and special decisions that anyone can make. To be able to bring children into the world and that world with them is one of the most joyous things that people can decide to do, however, it is also one of the costliest. The bills that come with starting and providing for a family can quickly add up. There are increases in living space that occur as they grow and as more children are added. The cost of clothes and supplies grows exponentially with age. Not to mention the cost of food each day or the cost of gas to cart them to and from school, friends, and extracurricular activities. Working a 9 to 5 job doesn’t always provide enough income for the family than just enough to tread water. Perhaps you are starting a side business just to make ends meet a little easier. Or maybe you are starting a business to replace your current occupation in hopes of being able to spend more quality time with the ones you love.
To Solve a Need
The starting of any business requires the individual starting it to discover the niche of what needs their business will fit. However, some businesses start because an individual sees a niche or area of life that is not desirable or efficient and comes up with a better solution to the problem. An example of this would be a ride share company. The old-fashioned method of waiting for taxi’s or private transportation by hailing a car on the street or having to set up the appointment days in advance has become outmoded in the 21st century. The ride-share business model came into play in order to revolutionize and increase efficiency for people commuting without the use of their own vehicle. It allows users to “cut the line” by utilizing technology for the sake of near instantaneous communication and pick-up.
Creation of a New Product
Often times, the creation of a new product is the solution to a common need or problem. These products can often be seen on TV in the hands of personalities such as the late Billy Mays and Anthony Sullivan. These products are created because an individual sees a way to perform a task more efficiently, safer, or more creatively. These products are then channeled into a business in hopes of bringing them to the masses in a speedy and efficient manner.
This isn’t just an “As Seen on TV” method of starting a business either. Many well recognized and independently successful companies were started because the founders simply saw something new that they could bring into the personal or professional world of others in order to make it better.
Means of Starting a Business
The question: “Why should I start a business?” is one that can only be answered by personally assessing what your needs and expectations are. On the other hand, the question of “how should I start a business?” can be answered via outside resources in a variety of ways.
What Type of Business are You Starting?
Before attempting to establish, run, and maintain a business, you must be familiar with what your business is. This doesn’t mean that you need to know every financial detail off the top of your head, but you must take a sense of self-awareness into the business with you. Know what need you are filling. Know what category type of business your business fits under. Remember the reasons why your business is being started. You need to know and understand your business like it is an extension of you, because it is just that. Know the facts and your reasons and you will be prepared to start your business to the best of your ability, regardless of experience or expertise, although they do help.
Make a business plan. Write down every detail of your business model and execution on paper. Know your market, understand who you will be selling to/ serving and why. Make sure you have a deep understanding of what costs you expect. Will you need to seek funding? If so, are you seeking investors or partners? How much funding will you require and what for? How will you repay/ compensate those who invest in your business? What price(s) will your product(s) sell for? What is the Cost of Goods Sold? How much money from each sale is funneled back into the business? How much do you pocket? How much is returned to investors?
The planning stage is often the most daunting, because a solid business plan is one that asks and answers as many questions as possible. If you hope to start off running, instead of limping along, a thoroughly written and well thought out business plan is the place to start. There are no corners to be cut during this stage of starting a business. Even once a business is started, it is important to continue adding to the plan, retreading it, and making sure that the company and the plan continue to stay in sync with one another.
Do Your Research
The best way to be prepared and to create and maintain a business plan that works is to do your research. Nobody in the history of business is has done too much research, but plenty have done too little and fallen far short of their goals. Use the resources at your disposal, because there is no shortage of knowledge and wisdom that can be gained from them. What are some of these resources?
Mentorship is a great resource for understanding how to start and maintain a business. Talk to local business owners who have gone through the same process as you are. These mentors don’t necessarily have to be in your same industry either, but the fact that they have already dealt with the trials of stepping out with a new business equips them to teach you.
Books and electronic resources are a great way to learn about the areas of need that you are targeting. They serve as a great way to understand the demographics and needs of your target markets, as well as assisting you in the definition of those target markets. Use the tools available to you to learn more about who you are selling to, as well as both your direct and indirect competitors.
Types of Businesses
Going hand in hand with planning and doing your research, it is important to define what type of business your start-up is? What role(s) do its internal operations play? What role(s) does the business play externally in the lives of its community and customer base? These are the questions that help define what type of business it is that you are starting. There are three categories in which your business may fall under. They are: service, manufacturing, and merchandising. However, hybrid businesses can and do exist that partially fall under two or three categories via different aspects of the business.
Is your started with the intention of providing a service or filling a need? A service type business is one that doesn’t exist to create or distribute physical product, although it often utilizes such. Instead, a service business exists to fit the needs of a customer or group of customers. An example of this type of business would be Uber, as mentioned earlier.
Uber provides vehicles and drivers for its customers in order get them from Point A to Point B or wherever they are trying to go. Uber doesn’t own any vehicles, nor does it directly employ any of its drivers. So, Uber doesn’t have any physical stake in the service provides. However, Uber maintains the app and operates it to create a channel of communication between users searching for a ride and users who own a vehicle and are seeking payment in return of delivering rides.
A service business can also include, but is not limited to: cleaning companies, construction, remodeling, marketing, ride-share, technical support, and various other businesses that do not produce tangible goods for sale, but that assist with their customers’ lives in any particular way.
A manufacturing business creates a product or good and distributes that product or good in return of payment. These manufactured products can range anywhere from a simple coffee table to something as advanced as the latest smartphone. These products often perform a service or serve a particular function, but the production of such is not in itself a service.
A prime example of a manufacturing business is tech giant, Apple. Apple produces various electronic devices, such as computers, phones, and tablets to assist their customers with everyday life. Each customer is assisted in their own unique way, and Apple does not directly provide or accomplish the services that the customer uses their device for. Apple simple designs and creates the devices on which they perform these tasks.
Merchandisers are often the middle men of the equation. These businesses do not frequently manufacture the products and goods that they sell. Instead, these businesses purchase manufactured goods from manufacturing companies and perform the service of transporting, organizing, and selling them via storefront. Typically, this type of business is local or in the form of a physical store like Wal-Mart, however there is a growing amount of merchandising businesses cropping up online.
The two top examples of a merchandising business are Wal-Mart and Amazon. Wal-Mart transports and distributes goods via brick and mortar stores. This brings products, such as produce, directly to the consumer for their immediate purchase and consumption. Amazon stores theses products in warehouses and then delivers them to the customer whenever order, offering a larger variety of goods are more affordable prices. Regardless of the means of distribution, merchandisers bring a variety of products from their manufacturer(s) to the consumer.
If you find yourself asking the question: “Why should I start a business?” then you should start by listing your reasons for needing a business in your life. In other words, what is your why? Are you seeking to better your quality of life, to better the lives of your spouse and children? Are you seeking freedom of time and money? Define you why, then assess your what and how.
What need are you filling in your community or communities abroad? Identify where there are problems that you see a solution for. Define where a specific product or service could benefit the livelihood of others, and begin to implement your ideas in that area. Do your research and plan your strategies out thoroughly. You can never be too prepared when starting a business. Most of all, continue to assess your “Why” and make sure that “Why” shines through every aspect of your business.