Thursday, 16 October 2014

Let’s be a newbie: A Guide For New Business Setup

Tens of thousands of investors decide to become entrepreneurs every year. Though the idea of setting up one’s own business seems to be romantic, not many are able to reap success. There could be several reasons why people setup their own business, it could be to become one’s own boss, it could be a great idea that has the potential to make a difference in the market and more often it is to make lots of money. While motivation and commitment are vital to be able to risk a substantial amount of investment, proper planning is what takes the idea forward and makes a brand out of it. For a newbie looking to make a difference, here’s a roadmap to success.

Selecting a business: Every business should start with a thoroughly planned idea. A newbie must be realistic in what type of product or service he/she is going to work upon. Generally, a new business idea revolves around the passion of the individual. However, startups must also look into other supportive factors like local support, investment potential, market competition and expected demand.

Deciding upon the investment: The second most crucial part of starting a new business is being able to entertain enough investment. It doesn’t matter if you are investing from previously acquired assets or approaching the bank for loans, the sum should be enough to take the business through the tough starting days. Research hard and you may also try to seek partners who would be interested in investing. Further, new businesses would also need a good lawyer and accountants, who would be able to handle issue relating to tax, finances and business laws.

The initial stagnation: You cannot expect to earn huge right from the beginning. Regardless of the product/service you are providing, it takes time for a business to gain prominence and to win a demanding position in the market. The first few years will be at “zero” profit, but that also doesn’t mean that you aren’t doing well. Be persistent, try to improve upon quality and the results will soon begin to show up.

Expenses as an investment: Take account of every expense right from the letterhead design to the office rent. Everything that is spent should come back as earnings and possibly profits. There shouldn’t be anything that hasn’t been accounted for.

Break-even reach: Among the first questions that a new business would be interested in is the level of sales that will bring the company profits. This is what we refer to as the break-even point. While it is hard to predict the exact point, it will depend on a variety of factors including the company’s product line, the market size, the pricing of products/services, average units sold, marketing and promotion.

Role of marketing and packaging: Marketing is the key to introduce a new product/service into the market. A unique and creative promotional campaign will bring the brand into the limelight. As such, there would be dozens of competitors fighting for the same market segment. The same can be said about packaging wherein the same type of product is offered in an interesting package.

While this list of tips is not exhaustive, it does apply to the general idea of starting a business, regardless of the industry. As such, this article should be able to help people looking to introduce a new brand into the market.

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