6 of the Most Important Factors to Consider as You Plan Your Small Business

6 of the Most Important Factors to Consider as You Plan Your Small Business

GBTI offers individuals a wide range of loan products, including those meant to fund the creation or growth of a small business. Guyana is quickly becoming an environment welcoming of entrepreneurs, with more access to support and guidance.

Still, the success of a small business largely depends on the legwork that you do prior to opening your doors. While money is certainly an important consideration, you should think about a wide range of other factors as you gear up to open your business. Some of the key considerations include:

1. Your Personal Strengths and Weaknesses

Before starting a business, it is important that you understand where your strengths lie and also recognize your personal shortcomings. Creating and running a business is hard work. You will need help and understanding of your weaknesses in order to find people who complement your skills and deficiencies.

Establishing a company involves financial, marketing, and legal considerations Think about what you can do well and what you might be able to teach yourself. Where you have gaps in your knowledge and proclivities, note them so you can find the right people to help you when the time comes. Ultimately, when you are honest with yourself regarding your strengths and limitations, you will be more prepared to run the company effectively.

2. Your Professional Support System

Opening a business is challenging. When you have more people in your corner, you have a greater chance of success. Try to find someone who can give you advice about different aspects of the business. For example, someone who has started a business in your town may be able to guide you through some of the legal hoops. Someone who owns a business in a related field can likely give you tips on expanding your customer base.

Ideally, mentors and advisors should be people you feel comfortable being completely honest with and who will make themselves available for questions or advice around the clock. You can find mentors a number of ways, from getting involved with local business communities to searching them out online.

3. Your Local Markets

Businesses are successful when they fulfill an unmet local need. You do not need to be the first one to the market with an idea if you improve upon current offerings and listen to what customers actually want. To that end, you should have a clear idea of your local market and its needs.

Talk to people and listen to their answers to make sure there is a demand for your product or service. Understand the demographics and their buying habits. You may also want to spend time research nearby markets so you can position yourself to expand in the future.

Pay close attention to competitors and how they have positioned themselves in the market to make sure your business is distinguished enough to compete successfully. Doing this legwork will also help you market the business well.

4. Your Business Plan

A key step in the process of opening a business is creating a plan. Entrepreneurship is a risky venture and a business plan is the best way to mitigate this risk. By creating a comprehensive business plan, you will force yourself to think through many of the issues that could arise and establish paths to deal with them.

A plan forces you to think in detail about your business and the various means of fostering its growth in the years to come. Additionally, a business plan creates a map for the company that you can go back to and assess whether or not you are on the right track.

If you have veered from the business plan unexpectedly, you need to think about why and whether or not you should steer back toward it. Changing courses is sometimes necessary for survival, but you need to do so in a calculated manner.

5. Your Estimated Costs and Returns

Part of the business plan is running the numbers. By looking at how much money you will need to launch the business and estimating the likely returns, you can verify that the plan is viable. Crunching the numbers will also help secure financing as you will be able to demonstrate how the loan gets repaid.

While the numbers are estimates, they are important for projecting growth and development. Think about the overall startup costs, sales, and cash flow. Depending on the nature of the business, you may need to seek out more data.

Look at the performance of similar businesses in your own market and others to get a better understanding of what you can expect. Mentors and advisors can also help a great deal when it comes to making these estimates.

6. Your Contingency Plan

Even when you think you are prepared to start a business, unexpected issues can occur. The past year was an example of that, with the pandemic rapidly changing how many people approached their own businesses. Contingency planning helps guide you when the unexpected happens and can help the business from floundering.

When first starting a business, you may also want to think about income and what you will do if sales are not at the level that you expected. If you have another job, you may want to keep working it for the initial startup period to make sure your business is viable. You may also want to consider different avenues of funding that could help keep the business afloat if you run into unforeseen issues.