So you’ve got a great business idea, a plan to make it work, and you’re ready to set yourself on the path of entrepreneurship. No matter how prepared for success you are, there may still be a few things you haven’t thought of. Our CPA, Ben, discussed the possible pitfalls of a new business venture and how to avoid them this morning on Periscope. Being a small business owner himself, he’s learned a thing or two about what it really takes to run a successful small business.
- The first question you need to ask: Is there a market for my product or service? As harsh as it sounds, if there aren’t people out there willing to buy what you’re trying to sell, your business simply won’t succeed. There has to be some sort of demand for what you’re doing. The best way to determine this is to do some research. Use the internet, ask around, put it out on social media–ask questions like, “is this marketable?” “Would you buy this?” “Is there someone doing something similar to what I’m doing who is having success with it?” “Is what I’m offering both useful and interesting?” The absolute best way to determine if there is a market for your product or service though is to think hard about what problem you’re solving for consumers. This doesn’t mean that you have to sell something essential for survival or that your business has to solve a tremendous problem, but what you’re offering has to make their life somehow better. You could be solving the problem of time management by selling trendy and artsy planners/organizers, or you could be helping them write their will by offering legal advice. Regardless, you have to find out if there are people out there willing to put forth money for what you are pitching to them.
- Support from family and friends. Even if you’re planning to run a one-man show, the people in your life have to buy in to what you’re doing so you can achieve greater success. Running a business demands a lot of time and resources from individuals, and can be hard on families and relationships. Getting your friends and family members both interested and supportive of what you’re doing can really give you the extra push to succeed, as well as help you along on days when the path of entrepreneurship feels lonely and bleak.
- Take your expectations of time and expense and multiply them by three. As much as we’d all like to earn a six-figure income in a two hour work day, it’s not a reality for most people, especially business owners just starting out. Plan on your new business to taking three times as much money and three times as much time as you’re planning right now and you’ll be a little closer to reality. If you originally planned for two years and $10,000 to get things up and running, plan on six years and $30,000. You may be pleasantly surprised if things come together cheaper and quicker than that, but multiplying those projections by three is probably a little closer to reality. Hopefully, in the end, your business will also be three times more profitable than your original plan as well!
Follow along on Periscope (@mazumausa) on Wednesdays at 10 am MST for more business discussions, tips, and financial advice from Mazuma’s CEO/CPA, Ben Sutton.