14 Feb Things to think of before starting any business
You may have several ideas about businesses. You may be excited about some of them. But none of them may be viable. Viable = A business that makes enough money to stay alive.
How can you check if your idea is indeed viable?
1 – Think if there is a need for your business in the market that you are trying to serve
e.g., If you are planning to launch a restaurant in a certain location, are there sufficient people living in the area around it? Is there anything with your restaurant that will be unique and make people come there? What type of pricing will work in that market – will a premium priced restaurant with an exclusive menu bring people in?
2 – Think if you have what it takes to set up that business
e.g., Are you prepared to give up the security of a salaried job to take a risk that may or may not succeed? Do you have the tenacity to hold on if things do not turn out as expected in the initial stages? Do you know how much it will cost you to acquire (rent or buy) the location for the business? Do you know how much your monthly outgoing is likely to be – thinking of the rent, electricity, water, cooks, waiters, cleaners, advertising etc. etc.? Do you know what would be the actual cost of preparing the different dishes in your menu?
3 – Think of how you are going to finance the business
e.g., Dip in to your savings? Take a loan from the bank? Will the bank give you a loan? If you take a loan, will you be able to afford to pay back the interest and principal monthly on top of the other expenses you will have while running the business?
4 – How are you going to finance your personal life when you are starting off the business?
e.g., Do you have sufficient savings to keep you going for 24 months even if there is nothing coming out of the business? Is there a spouse who is in a salaried job to help you out during this period?