Starting a business is a multifaceted endeavor. From planning and financing to marketing and revenue generation, plenty of moving parts go into establishing a startup. Prioritizing the important foundational elements of a business will help you prepare to gain traction in achieving your goals.
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Here is an outline of 5 things you must consider when starting a small business.
Understanding the unique tenets that define your business is paramount to achieving impressive results. What metrics and performance standards make up your vision and mission statements? What are your short-term and long-term strategic plans? How do you plan to track and map out your business goals?
Additionally, it is crucial to outline the kind of business structure you envision guiding your day-to-day operations. If it is a sole proprietorship structure, are you well informed of the legal responsibilities that bind you and your business? If you are looking for a partnership model, who are your partners, and what type of contractual agreements will oversee your operations?
Your business fully rides on the uniqueness of your products and services. A detailed understanding of your products is key to gaining a competitive edge in the market. What features, value propositions and pricing structures characterize your products? Can you answer all questions regarding the prospects and peculiarities of your services?
Your target audience is the consumer demographic who need, want or are likely to buy your goods and services. This category of people and institutions will be the base of all your business decisions. Knowing your target audience should look beyond their location. You want to understand the drive behind their purchasing decisions. What are their roles in the overall purchasing path of your business?
Spend enough time researching your audience. Beyond demographics, your research should help you outline who they are, what products they want, the competitors they are considering, and the rates they are ready to pay.
The value of understanding your audience is limiting marketing resources to the right people. You cannot achieve optimal profits and results if your products, ads, and marketing messages are floating on a pool of uninterested parties.
Distribution is the framework linking consumers with product manufacturers. Without appropriate distribution channels, the availability of goods and services to customers is put in jeopardy. If your business does not establish efficient distribution channels, potential customers may render it inadequate and untrustworthy.
Consider whether you want to channel your products directly to the consumers without intermediaries through direct distribution channels. If your business model relies on intermediaries and middlemen, consider whether you need a one-tier or multi-tier distribution strategy.
Considerably, the rise of the internet has enabled most startups to operate over digital spaces through e-commerce and other B2C business setups. This way, more businesses are moving their goods and services directly to the consumer with the online space as their distribution channel. If this is your preference, you want to survey and understand how online distribution impacts your business.
One foundational step entrepreneurs should take before starting a venture is defining their business communication channels. Without a doubt, information is the lifeline of any brand, and how such information is relayed internally and externally is crucial to the brand’s success. Efficient communication channels go a long way to informing and redefining customer behavior. As a thumb rule, you must adopt a communication channel that is comprehensible and easy to use by your targeted recipients.
Determine whether you will use traditional channels, such as emails, newsletters, press releases, and commercials, to communicate with your customers. If you are looking to exploit digital channels, consider whether you will major in social media, automated text messages, or videoconferencing.
Statistically, most customers are interested in a channel that offers consistent communication regardless of the method applied. Channels that do not convey information reliably and consistently are a breakaway from the value of customer prioritization.
Pricing and Payment Processing
Your business toolkit must feature a payment processing system to enable credit card payments. This is a convenient way to expand your payment options to your projected physical and online customer base.
Determine the type of payment method your business should accept. Fortunately, today, you can have a blend of multiple payment methods. These include debit and credit card processing, digital wallets, and Automated Clearing House (ACH) payment processing.
Decide on the type of payment gateways that will be best suited for your brand. If you are running a physical store, then POS systems will be sufficient for your operations. However, if you are extending your payment services over the internet, you will need an online checkout service.
However, payment processing is entirely not possible without functional merchant accounts. These are specialized bank accounts through which businesses accept funds electronically. Keep in mind that varying merchant accounts serve different purposes depending on the type of business in question. For instance, high-risk merchant accounts are designed to service ventures considered to be of a higher risk, such as automotive businesses.
As exciting as it may be, embarking on a journey to entrepreneurship is not always easy. However, with the right business strategy and information, you can almost be certain that startups are quite rewarding. Understanding your brand, target audience, payment processing systems, communication channels, and distribution channels should boost your confidence to get the business on the move.