Knowing what’s best for your business sometimes comes way too late, after you have made some mistakes that you could have avoided by careful initial planning. We have compiled the 5 essential questions you need to think about before even starting to come up with creative names and logos for your company. It would be a good idea to sit down with these 5 questions and thoroughly think them through, so you will best understand your future business needs.
1. What are you going to sell?
A whole lot of business decisions can spring up from the answer to this basic question. Are you going to be selling a physical product, an electronic product or a service? In the case of a physical product, you should think about which distribution channels are most suitable for your business type. For example, if you are selling a physical product online, how will you store your merchandise, how will you track inventory and orders, how are you going to monitor payments? Will you need physical space to act as storage or a store? The best solution usually is to invest in an all in one Inventory Management software that will take care of orders, inventory, payments, invoicing, etc.
In the case of services, will you be offering your service face-to-face or electronically? How will you market a service that is bound locally? In any case, you need to know whether there is a market for your product or service at all and whether there are some strong players already dominating the industry or local market.
2. How will you get your ready product?
If you have decided to sell physical products, which involves the most planning since you will be handling or outsourcing order fulfilment as well, you need to decide whether you will be a producer or a reseller and whether you will offer consignment services or not. As for electronic services, do you have the knowledge, skills and experience to develop your own product? If not, you should start thinking of ways to source appropriate talent.
3. What business structure is most appropriate for your product?
Depending on your business, financial situation and team, it depends which business structure will best fit your needs. You can be a sole-owner, a proprietor, a partner, a trust or a shareholder. Alternatively, are you going to have a physical or online business? Is it going to be a franchise, a family business, a freelancing service, or a home-based business?
4. Where is your market?
Is your market limited to your neighbourhood, your town, city, state, country or is it internationally scalable? If physical goods are involved you might want to research regulations and laws related to export or import trade, depending on what activity you are planning to engage in.
5. Who is your customer?
Businesses that start out without a clear image of their ideal or most likely customer are not targeted well. Remember that you should always start with a customer’s need or problem in mind, not our dream profit.