When starting a business, many people will think of private jets, sprawling mansions, sports cars, and designer suits. But this is a far cry from the truth. Owning a business comes with great sacrifices such as money, sleep, relationships, and even worse, your mental health.
Before starting a business, read on to learn the 10 most significant things you need to do before starting.
1. Have a clear WHY.
Ask yourself this question: Why are you starting a business?
If your goal in starting a business is to serve a purpose, leave a legacy, or fill an unmet need in the marketplace, these are the factors that will drive you to succeed even when the going is at its toughest. Develop some clear visions for your entrepreneurial life. It will help you stay focused on your ‘why’.
2. Manage your finances.
Before starting a business, determine your net worth. Get rid of credit card debt, and calculate all of your available cash reserves such as savings, KWSP, or home equity. Try using accounting software to make this easier.
Other than that, ensure that you have an emergency saving account for your daily expenses, and it can sustain your business for one year.
3. Research the business opportunity.
Don’t let the excitement of starting a bakery blind you if you have never worked in one. Having working experience in the relevant field equips you with the skills and knowledge to deal with its obstacles.
Research the industry you want to join. Work experience in the field you have chosen is recommended before starting a business.
4. Research the market.
Now that you have the relevant experience, how do you know if there is a real business opportunity for you?
Carry out research by asking these questions: Who are the industry leaders in your market? Which group of people are you targeting? Who are your competitors? What are the current price points? What are the industry trends? What marketing your competitors are using strategies? What are the common sales cycles?
The answers will guide you towards making thoughtful decisions before starting up.
5. Research the customers.
Once you know the market inside out, you will have to find your target customer. Then, you need to speak to them and find out how they fulfil their needs and their budget cycles.
To engage further, ask competitors for a quote, purchase their product and return it to see how their customer service behaves. You can even determine what keyword your competitors use online with some research. After that, you can decide your niche and your customer profile.
6. Get a website and a name.
Secure a website and a distinctive name for your business. Don’t try to be clever by using a word that is difficult to say or spell. Settle on a name that is memorable.
You want to build a brand, not just establish a business. That’s why investing in a logo is totally worthwhile. If your budget is on the low side, you can get your logo designed on canva.com or fiverr.com.
7. Incorporate your business.
You need to incorporate your business as an Inc. or Sdn. Bhd. Ask Suruhanjaya Syarikat Malaysia (SSM) for further details on how to incorporate your business. Starting your business as a sole proprietor will lead to personal legal liability, and you will look unprofessional.
8. Create a business bank account.
After your business has been incorporated, open a business bank account that is separate from your personal savings account. Using a different bank to your personal bank will avoid commingling funds and protect your personal assets.
9. Test your product or service.
Develop a test product and list out its core features. If you are creating a food product, you can do so in a commercial kitchen and make a prototype.
For a service business, you can draw up a one-page document that outlines who you are and what you do and emphasizes the benefits of using your service. You might consider developing demo products for your first few customers with an eye on receiving compelling testimonials and suggestions for improvements.
10. Set Your price
Before setting a price, you need to calculate your costs. After taking labour, materials, and shipping costs into account, you also need to determine the percentage of your overhead, admin costs, not forgetting your profit margin.
Not good at math? You can use bookkeeping software to do it. Be sure to check out our website as we offer one of the best accounting software in Malaysia.