6 Things You Must Know Before Starting a Business

6 Things You Must Know Before Starting a Business

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Of course starting a business is not easy, there are many things that need to be prepared before starting a new business. The following are some of the things that must be known as material for your business preparation:

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1. Type of Business Entity

There are many types of businesses, and you have to choose which ones are most suitable for your industry. In general, there are three types of business entities, see the brief explanation below:

Individual Company: It is the main choice if you are the sole owner of the business. You are entitled to all profits after being taxed, but you also bear all the risks and losses of your business.

Sole proprietorship: This type of business offers active collaboration from each member of the firm where each member has a personal obligation to pay off business debt.

Partnership: This type of business offers flexibility in running a partnership where there are active partners who are actively involved in business management and passive partners who only contribute business capital.

Limited Liability Company: A limited liability company (LLC) is a legal entity where the owners are not personally liable for the debts or liabilities of the company. Limited liability companies are hybrids that combine the characteristics of a corporation with the characteristics of a single company or a sole proprietorship.

2. Your Biggest Competitor

The answers to these questions are very important, knowing who your competitors are is fundamental to learning how they do business and what things can be taken from the competitors’ successes and failures.

3. Target Market

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Different target markets will require different approaches. Recognizing the target customers of your business can be the key to successful marketing; without it, your product will certainly be difficult to sell. Who will be the target of the products and services that you offer? And what more value can you offer? When you know the answer, try a number of marketing approaches to find out which strategy gets the best response.

For example, if your target is senior consumers, traditional advertising can be your mainstay, but for younger markets, you must be more creative in using new media (such as Facebook, Instagram, YouTube, Pinterest, etc).

4. Mature Business Plan

Your business plan is a guide to the success of your business, this plan shows how you plan to make a profit and outline your team’s plan to attract the attention of potential investors.
A business plan is also a matter that must be done carefully if you are in the stage of seeking funds from investors. How to make a business plan will depend on the industry you want to run. Again, remember to do competitor research to help make your business plan.

5. Source of Funding

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Not all entrepreneurs have enough personal capital to start their business. As much as possible, start doing research on borrowing funds, potential investors, and find out about the choices of business grants available for your business.

6. Certification and Legal Documents

There are several certifications and legal documents that you need to take care of to do business legally. After doing the basic documentation register your business, you also need to obtain industry-specific permits and locations. For example, if you open the restaurant which serves alcohol, then you will need a certification of selling alcoholic beverages. Do not let your business be exposed to raids and subject to legal fines.

You will realize that after doing business there will be more aspects and problems that must be taken care of. But by knowing and preparing these 6 important aspects carefully, you will have a solid foundation to build your business.

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