What Every First Time Entrepreneur needs to know before starting their first business.

No economy in the world can survive without small scale production. Small and medium businesses form the basic fabric of every society (urban or rural), especially due to its relatively manageable size and the capacity to offer individuals extra means of income and free up time for individual use.

Left with the means, we all will love to establish something of our own which we will manage and employ all the best creative ways to make profitable.

This is a nice dream to have. However, as with all beautiful dreams, lack of action is just going to make the actualisation of the dreams a mere wishful thinking. But, let’s assume for a second that you have decided to test your entrepreneurial skills and implement your wonderful, visions. So, what’s next? 

1) COME UP WITH A DEMANDED IDEA, SERVICE OR PRODUCT.

The truth is, there is a high possibility that the idea you are thinking is unique to you, may not totally be unique to you after all. But, notwithstanding that, whatever product you are about to sell must be a product that people actually want to buy. Everything in business is about the customers money, no matter how great the services are (this does not apply to charity causes).

This is very key. No matter how beautifully made a product or service is, if it has no buyers, it’s of no use and will eventually lead to avoidable business losses for the person that made the investment. 

This can be avoided if you first carry a simple feasibility study. 

2) FEASIBILITY STUDY.

A feasibility study is an on field analysis undertaken by any intending business owner to assess the profitability of the business they intend to carry on. As an intending business owner, it is advisable to carry out a feasibility study before opening any business in any area. The basic reasoning being that you need to understand what people want first, before you can begin to supply products to satisfy the needs. Don’t just enter or open a business without doing this, especially if the business will require a moderate substantial sum.

In a feasibility study, it is also easy to figure out what people may likely want, what will improve sales and the right place to position your business for the right customers to be able to easily access your offering. Another importance of the feasibility study is that it helps you improve on your SWOT analysis (we will discuss that after this).

Now, how do you carry out a feasibility study?

There are organisations that offer such services with dedicated field workers. However, it’s preferable you do it yourself except the business is large scale. We all have our perspectives, and sometimes we may see what others may not see. During the feasibility study, start by checking out the various likely places you have in mind. Among other things, you should at least consider location, office rent, security of the area, applicable rates, utility bills, etc. Of course the prices and infrastructure of the various office spaces should inform you adequately before you make your choices.

The feasibility study should also be used to know what others are selling in the place, what is the best selling products in the place. You should also note how to better the services of the others if you intend doing same business they’re doing. 

You should be able to also inquire the form of difficulties faced in the area by people doing business there already. This will help restrict from doing business in dangerous areas or places prone to police raids, and other unnecessary issues that limits business productivity, therefore affecting profit.

The truth is, there is no limit to what you can achieve on a feasibility study. You will be surprised at what you can learn in just one day of actually engaging in a field study to learn about a particular thing.

Though a feasibility study does not guarantee that your business will start booming and make millions instantly, it will at least help reduce the chances of failure and increase chances of success.

3) SWOT ANALYSIS

S – Strength

W – Weakness

O – Opportunities

T – Threats.

The on field feasibility study should greatly inform your next line of action which is making a SWOT analysis. Forget the big name sound that it emits, it’s a simple thing we do almost every day without even giving it much thought.

From the feasibility study, you must have known the right products to sell, the right market for the products, the particular demographics in the market suitable for the product as well as learn from the practice of those before you ( if you met any directly).

Having known all this things from the feasibility study, you can begin to know the likely weaknesses the business will suffer. Let’s take light for example. If you are doing business in an area where there is epileptic power supply, then you find out that you will spend more money on fuel if your business requires electricity to function optimally. That’s additional cost that could have been used to improve other areas of the business.

Therefore, it becomes necessary that you go for specific services that particularly solves a need in the business. If you are opening a restaurant, it doesn’t make sense to be located in areas without easy access to roads, especially busy roads. If you want to open a barbing saloon, it becomes necessary that you stay at a glance, specifically few meters apart the road side area or street entrances, including food vendors.

Obviously, you have to realise that the business has to be in the face of the people you want to patronise it. This is basically the core principle behind the rising aggressive and invasive digital marketing accross the world right now with ads campaign on android phones.

SWOT analysis evidently, will point you in the right direction as well as the potential prospects inherent in the venture you are about to take. 

In the SWOT analysis, you simply examine the strength of the business. This are areas or things you can do to generate profits for the business. Weakness are things likely to hamper the business productivity. It may include burglary, arson, access to electricity, security, rates, theft, cost of transportation and staff. It may also be unexpected expenses.

Opportunities are areas you can improve in the business. It may also be areas in which you can take advantage of your knowledge to offer better services in order to make better sales. It is the chance for you to do one over your competitors.

Threats are basically the other people in the same business environment that you will likely be competing with for customers. But, that’s not the only threat too. Some times, businesses can spring up in areas marked by government for demolition without previous owners knowing. The demolition may happen and destruction of goods will be the result. There is also things like legal issues, fire hazards and other acts of God which was not existence when you opened business but may spring up later. A plan should easily take care of this. A new government may assume office and impose policies, taxes and rates not previously there. Take for instance somewhere like Ahia Ohuru (Ngwa Road Market) Aba, where a lot of traders mostly trade their wares by the street corners. It has been like that for years until the government decided to do something about it. A smart business person will know that such business practice of road standing is a cheap target for some people who will utilize the opportunity to enrich themselves through illegal market dues and fees. The target of such a trader should be ultimately secure a safe space to transact his trade with peace of mind.

Threats here may also include being careful of products bought so that you don’t buy contraband goods or stolen goods and get into trouble for it.

Please find a good book on Feasibility Study and SWOT Analysis to read. It will really benefit a lot.

4) COME UP WITH A SIMPLE PLAN.

The SWOT analysis should point you in the direction of making your business plan. This includes how much to invest, cost of running or executing the project, and all the other costs you must have figured out in the feasibility study carried out.

I’m not going to start giving you some guides on making the best business plans. But, by making a plan, you reduce the chances of being reactionary once the business takes off and be focused on achieving set goals and objectives.

Note: everything here still applies to online businessess. It doesn’t matter if it’s freelancing work online or running a blog. No matter the business involved, do not side step preliminary Inquiries. It is very important, and will help you bypass a lot of things later, especially the legal aspects of it.

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