Starting a new business is a big thing than you think, many people direct their thoughts only about managing the business .but, as a small entrepreneur, you have to direct your mind to analyze the business as well. then why you must analyze your business before starting?
It is a big part of your business plan. If you could accordance with these facts successfully, then it will directly influence to positive growth of your business.
Understanding the Nature of your business
There are many types of businesses over the world .baying and selling, production business, service-based business, skill selling businesses are few examples. at first, try to understand the nature of your business. Examine the below examples.
A grocery item shop
Essential home equipment shop
All of the above businesses are differ each from others. then owners of the above businesses have to follow different types of business strategies and management techniques. as well, you have to understand your business strategies and management methods related to your business.
amount of workers, business location, capital, market, stocks balancing, bookkeeping, and all the important things depend on the nature of your business.
That is the reason you must get a full understand of the business you do. this is the first point you should grab when you make your business plan. other facts are discussed below depend on the nature of your business.
Capital Your Put In To Your Business
Everybody knows that money and other assets require earning more money through a business, in finance, we call it “Capital”. Capital is the power of your business. You may have trucks, building, machines or banknotes witch can be applied for your business.
All these assets can be called business capital. But, the most important type of capital is “Money” (cash).money has a high liquidity value. Then it becomes the most important part of your business.
you must have a considerable amount of cash on hand to handle the business before starting it .having a plan about allocating the capital is important.
Make a list of expenses and business purchases .match them with the capital. Make sure not to exceed 70% from the capital to expenses and business purchases. Keeping rest 30% as banknotes is a wise decision you should get.
The Capacity Of Your Business
Identifying the capacity of the business is another important fact that should consider before starting a business. This capacity identification is directly connected with the Capital you put into the business.
capacity indicates the size of the business .even as a small businessman you might be able to put large capital into the business, but, the only condition is you must have the ability to handle the business individually or with your business partners.
If you are new to the business field or if you have not done such kind of business before, the wisest thing is paying attention to the capacity of your business before starting .because there is a big risk of putting a large scale of money into the business field that you have not been evolving before.
The Cost You Have To Spend
Fixed cost and variable cost are two types of costs that you have to spend for the new business .fixed cost is the cost you have to spend from the capital to acquire assets witch help to make wealth .
as examples, baying selling goods, purchasing new office furniture’s, etc. variable cost is the cost that you have to spend during the day to day business operations.
As examples, electricity bill and internet bill that pays for the business, courier charges, etc.. These types of costs you have to pay again and again.
Location Of Your Business
This fact is almost dependent on the nature of your business. and it directly influences the growth of your business. as instance, starting a hotel or tourism-based restaurant near a factory is not a preferred to build.
Your clients will not like to spend even one day under such a rusty condition. Then following points can be suggested as thinking facts when selecting a location for the business
- Easiness to approach to market
- The convenience of purchasing and distribution
- The requirement of the clients / Residents
- other same competitors of near the aria
- The cost you have to spend for location
- Legal Conditions
- Amount of employees
You need the support of employees until you are not able to handle the business alone.
An employee is a cost of a business and on other hand, employment becomes an asset to the growth of the business. don’t be fast to recruit employees at the start of the business if you have your own family support.
There are some businesses which can not handle without workers. In such cases give your maximum effort to do the works from a minimum count of workers. But it should not affect customer service in a bad manner.
Other businessmen related to your products are not your enemies. They are your challenges and learning opportunities. Examine how do they maintain their business successfully and achieve the market.
Analyze the business contest around your business and try to do something better than them. if there are many competitors related to your business, then business growth will be taken slowly.
A summary of all points discussed above is here for your easy reference. If there are any questions or need any clarification about them, please mention them in below comment section.in the next lesson let’s discuss how to manage the capital of your business.
first Identify the nature of your business and what you are going to do called business
- Make a plan to manage your capital efficiently
- Aware of the cost you spend for the business
- Understand the capacity and your capability to run the business
- Choose the perfect location for your business
- Identify the market that you are going to sell the products
- Decide the employees work under your business
- Analyze Other contestants of your business