BATON ROUGE, La. (BRPROUD) – An increasing number of Americans are reportedly starting small businesses during 2022, and some of these startups are local.
One statistic indicates that Louisiana is home to nearly 350,000 small businesses.
As entrepreneurs embark on their career goals, they’ve undoubtedly researched their various markets and looked for information on what it takes to succeed.
This information is vital as studies reveal approximately half of small businesses fail within the first four years of opening.
Listed below are five questions potential entrepreneurs may want to ask themselves and investigate before opening a small business. The information is lifted from experts who’ve contributed to sites like Smart Hustle and Business News Daily.
What am I exceptionally good at? And what skills do I lack?
The leader who is aware of both their talents and weak points is better equipped to know when to trust their own instincts and when to delegate certain duties to more knowledgeable partners or employees.
According to Smart Hustle, “Knowing your strengths and weaknesses can help you conduct your business in a planned manner.”
The article goes on to say that an entrepreneur typically needs talent in the three areas related to: Personal Characteristics, Interpersonal Dealings, and Practical Skills.
It details how each of these skills need to be applied as follows:
Personal Characteristics: A business leaders personality should usually include positive traits such as optimism, drive to excel, risk tolerance, and resilience.
Interpersonal Skills: Interacting with others in a positive way is necessary so as to establish lasting professional relationships with dealers, suppliers, customers and investors.
Practical Skills: Running a business requires you to be on top of your game at all time. With practical skills like goal setting, decision-making, business knowledge, you can take your business to great heights.
A personal assessment in regards to the areas listed above can help you figure out which aspects of your company you’ll show expertise in and highlight any personal weaknesses that will hold you back if they aren’t addressed.
If I start this company, who will my competitors be? And how well are they doing?
It’s recommended that fully understanding the industry you’re thinking of entering means getting a full picture of who your competitors are. This requires researching their strengths and weaknesses with the goal of providing something to potential customers that they do not offer.
According to Business News Daily, “Just because you have a brilliant idea does not mean other people haven’t also had the same idea. If you can’t offer something better and/or cheaper than your competitors, you might want to rethink starting a business in that area.”
What does my target demographic really want?
If you were trying to find the perfect gift for a close friend, you’d take the time to consider their culture, the experiences that have shaped their likes and dislikes, their long-term goals, and the things that make them truly happy.
After taking a moment to brainstorm these aspects of your friend’s personality and background, it’s likely you’ll come up with a gift that suits them.
Experts say the same in depth analysis is necessary when a potential business owner attempts to figure out who their target audience is and what they truly want.
According to Business New Daily, “Understanding who needs your product or service can help fine-tune your offerings and ensure your marketing and sales strategies are reaching the right people. Part of this decision is understanding if you are a business-to-consumer (B2C) or business-to-business (B2B) enterprise. Within those parameters are multiple categories, including but certainly not limited to age, gender, income and profession. You can’t earn a profit without your customers, so understand who they are and make them your priority.”
Are there local resources that can help me with my venture?
Most successful endeavors of any sort are achieved with assistance from multiple sources, and the same is often true of startups.
So, it can be beneficial to find out if local resources for small business owners are available in your area.
Smart Hustle says, “Turning your idea into a legitimate business takes immense effort and resources. Enlist exactly what resources are essential for your business to operate and their associated costs, starting from manufacturing/production to equipment for office space.”
The article adds, “Make sure you create separate lists of assets that you are using from your home amenities and equipment that you need to purchase. This will help you estimate investment cost and calculate comparative feasibility.”
What will my financial plan look like?
Before launching a business, experts say it’s important to have a thorough understanding of your current finances and how much you’ll be able to invest into the company.
That said, Business News Daily also recommends finding other sources of capital.
It says, “Most entrepreneurs start a business with a very limited amount of capital, which is a large hurdle to many. However, there are plenty of options available to a budding business owner.”
The article continues, “The first and most common place to seek capital is with friends and family. If that is not enough, expand the search to angel investors and venture capitalists. Should these options not provide the amount needed, then apply for business loans through banks and small business associations.”
Hopefully, taking the time to answer the five questions above will be helpful to potential entrepreneurs.
Click here for additional information on starting a business from the U.S. government.