Starting your own business can be incredibly satisfying, liberating and lucrative – but it's not easy.
Even if you've got the passion and a great idea, you could fall at the first hurdle if you're not prepared. Learning from other people's mistakes can save you time and money in your new business venture, so you don't have to repeat the same mistakes yourself.
Here are 9 questions to ask yourself to give your start-up the best chance of success.
1. Do you have what it takes?
You don't have to be ruthless or have great people skills to succeed in business, but recognising your strengths and weaknesses is useful for deciding what type of business you're comfortable running.
While you can tailor your business to suit your personality, there are some traits that are valuable assets for any business owner, including:
- Adaptability – finding ways to succeed in times of uncertainty
- Creativity – from your original idea to the way you respond to each new challenge
- Decisiveness – making tough decisions on the spur of the moment
- Discipline – working hard and following the rules now you're the boss
- Optimism – treating any failure as a valuable lesson
- Passion – your love for what you do is infectious
- Resilience – bouncing back from every failure towards your next success
You also need to be prepared for hard times and sacrifices while your business gets off the ground, as it could take time before you see your first profits.
2. Have you done your research?
Whatever industry you're in, there's plenty of information out there in books, websites, videos and podcasts that could be invaluable at every stage of your journey, or could at least remind you about things you've forgotten. To get started, here are some suggestions from NZ entrepreneur Dean Fountain.
It's also important to refresh your knowledge of more dynamic topics on a regular basis, like new industry regulations and the ever-changing world of online marketing.
If you know someone who runs a successful business, don't be shy when asking for their advice on specifics. They probably love talking about their business as much as you do.
3. What's your USP?
Your unique selling proposition (USP) is what makes you better than the competition. Are you competing on the quality of your service, your local knowledge, the excellent value you offer or something else?
You may love the work you do, but you need to focus on the benefits for your customers or clients. However specific your niche market is, your product or service needs to offer a solution to a problem and it should meet or exceed expectations.
4. What do people think?
If you want people to buy what you're selling, you need to be sure they're actually interested. You may be confident about your business idea, but you should also invite honest feedback and criticism rather than working in a vacuum.
Don't limit your focus group to family and friends, as their well-meaning support could be misleading. Instead, you should seek real opinions from your target audience and talk to other business owners you trust for their experienced insights.
5. Who are your competitors?
Knowing what other businesses in your industry are doing can help you to differentiate your own, as well as helping you to avoid litigation by making sure you're not directly copying anything they do (however unintentional).
As well as direct competitors in your field, you should research other companies that branch out into your area so you can make sure you're doing things differently – whether it's through tailoring your offering to your target audience, focusing on your local area or pricing competitively.
6. What's your budget?
Starting and growing a business takes money. You shouldn't spend more than you can comfortably afford, but being over-cautious could mean you're not giving your enterprise the investment it needs to reach its potential.
You can avoid these problems by setting a realistic budget. This needs to account for all of your outgoings – including rent, investments, supplies, marketing and any personnel you hire – balanced by your projected income.
You should revise your budget at regular intervals to reflect your changing circumstances. Most companies draft their budget once a year, but a younger business may need to revise more frequently.
7. What's your business plan?
As well as budgeting, you should also think about mapping out your business strategy for the long-term by drafting a business plan. Inadequate planning is one of the main reasons why many new businesses fail, and you can avoid this by working out your goals over the next year, three years or five years.
By setting achievable targets at regular intervals, you can motivate yourself to pass these milestones and work towards the bigger goals. As well as being a useful guide for yourself,
your business plan is important for investors who'll want to see that you're serious and realistic about your goals.
8. What are your legal obligations?
Registering a business in New Zealand is quite straightforward, but you need to make sure you're doing things properly, or you could face big problems and penalties.
Some of the things you'll need to consider are whether your business will operate as a sole trader, partnership or company, making sure you have an original name and logo, and whether you need to apply for any licences.
You can find more information on the business.govt.nz website.
9. Do you need a business loan?
Whether you're setting up a home office, stocking up on supplies, buying a company vehicle or renting a work site, most business ventures need start-up capital to get off the ground.
If you don't have the funds available, you should look into business loans rather than racking up expensive credit card debt or cutting into your retirement savings. Business loans are designed specifically for the needs of small businesses and can offer more favourable interest rates and loan amounts than other types of personal loans.
When you apply for a business loan through the Harmoney Marketplace, investors will take a look at your proposal and put forward money until you reach your desired amount. You can borrow up to $70,000 unsecured with a Harmoney business loan, with rates from 6.99% p.a. to 29.99% p.a. depending on your circumstances.* 99% of loans are funded within 24 hours.
This blog is not intended as financial advice