Hello Everyone I'm back once again. As a student in the Economics department in the university, we hear alot about starting businesses and the risks associated with them. This brings us to the post of today "Factors to Consider before starting a business". Let's jump right in! Shall we?
Businesses cut across all sections of life. Even scientist, the government and so on participate in various business activities from time to time. It's safe to say that business is an integral part of life. Now as an individual in the university or as a graduate. You would want to start fending for yourself so you can be independent of your parents in the long run. There are numerous business ideas to choose from when considering what to do and what might work for you might not work for another person so I decided to make the post in an attempt to give people more ways to find their ideal business. There are numerous factors to consider because as I said starting a business is a risk. So inorder to avoid the risking and losing, we take alot of things into consideration. The post is for all both students and graduates alike. Even students start their own businesses while on campus or immediately they graduate.
Factors to Consider
Location of the business : This is a very essential factor. The location of your business can make or mar any profits you could make or could have made. First of all, make sure your business is located near a place where it would be easy to get raw materials for the products the business is about (nearness to the market). Secondly, make sure it's near your target audience (the people who need the product you are selling). You can't build a store that sells Air conditioners in a place that is always cold.
Expertise/Experience : You might want to consider starting a business you have some experience and knowledge about. Many people may embark in a business but only few with wisdom and experience would excel. You can't just hop on an idea without knowing anything about it. You might want to consider going to meet someone to mentor you or going to learn the business under someone else so you can have the experience and know what to do in certain situations. Time management is also really important because time is a really value and irreplaceable asset. Make the best out of the time you have.
Source of Finance and Capital for the business: After finding an idea, you might want to look into how you would be able to finance the business. Some people use the money they get from Steemit to start huge businesses which to some others, they regard Steemit as their source of income already. Some businesses require huge capital to start e.g selling cars while some need a far smaller amount e.g managing a small kiosk. If you plan on start a capital intensive business, endeavor to have the capital to go through with the business same goes for small scale capital businesses. Jumping in without considering this is like building a house without considering if would be able to build it.
Competition & credit facilities : Now although competition makes for a healthy business environment, don't get bested by your competition. Competition in this context refers to those selling similar products around you. Now this doesn't always apply like in a case of an imperfect market (monopolist). Since the monopolist is the only one producing the product, he has no competition and might not even need to consider most of the factors in this section. Some businesses thrive with giving goods on credit and receiving later payment but not all people are willing and able to pay said money and as at when due. There are several business which have closed down due to the losses made from selling on credit and not getting the payment. So as a business only extend credit facilities to those who you trust would pay when they get the money and don't sell something you can't bear to afford on credit.
Demand of the product (s) : Before selling goods and/or services, we would need to consider the demand of that product. Is the product in high demand? Is it a basic necessity? I feel this condition is under the target audience factor.
Profitability of the business : There are various kinds of businesses with different scales of profitability. Some businesses sell with small profit but sell in large quantities while some might just get one or two sales in a day and make more profit than those that sell in large quantities. Importing and exporting can be really profitable but excise duties and other forms of import taxes and dues greatly reduce this profit. You can also consider this before starting the business.
There are several factors but I decided to classify them under the ones that were similar to them. I hope I have been able to help even if it's just a little. As an inexperienced young lad in the midst of several experienced entrepreneurs, I would love for anyone who sees anything wrong with any of the factors listed above to make them known to me in the comment section.