Venturing into business is when a person engages in business activities to make profits or gains through offering goods or services on the market for sale. A person who ventures into business is known as an entrepreneur or business person. The entrepreneur is responsible for both the profits and risks of the business. An entrepreneur must have a business dream and a passion to pursue it. You have to consider the following issues before venturing into business;
- Positive mindset toward business;
- Risk management;
- Business plan; and
- Key success factors.
Positive mindset toward business
To be successful in business a person must possess an optimistic mindset toward business adventure. A positive attitude enhances the chances of succeeding in the chosen business field. It increases the entrepreneur’s confidence in venturing into business despite the challenges along the way.Risk management
Venturing into business involves some degree of risk-taking as risk is part of life. It is not an area for risk-averse persons who try to avoid risk as much as possible. In business, you do your best to reduce the risk or prevent it from going beyond your risk appetite level. You must have an idea of the gain or loss you will make when your business succeeds or fails. The assessed potential reward when compared to the assessed risk must be in your favor. You must have a formal approach for identifying, analyzing, evaluating, and treating risk exposures to prevent them from occurring. If the risk exposures do occur the approach helps you to develop a satisfactory solution to keep it within your risk appetite level. Your business processes should have adequate controls in place.
Business plan
You must prepare a business plan that will guide you in ascertaining the viability or sustainable profitability of the chosen business line. A business plan is a formal document that contains the vision or dream of the business, the goals for achieving the dream, and the methods or activities and time frame for achieving the goals. The business plan should have adequate information and guidelines on the following key areas;
Products and services
The plan must specify the physical or virtual products or services the entrepreneur plans to offer to the market. There must be potential demand for planned products and services which is not being effectively met by the current suppliers. The products and services should be of high quality and meet the criteria of being well-made, reliable and performing to the specifications.Market analysis
Market analysis is the assessment of the target market to confirm the market size, extent of competition, market trends, size of niche market, distribution channels, key success factors, profitability, and growth rate. The aim is to estimate the success rate to expect when the products are launched on the market.Market trends
You should be aware of the key factors that affect the demand for goods and services in the market you have chosen to operate in. Is the market affected by seasons, school holidays, consumer behavior, festival periods, and among others? Understanding market trends will help you develop and implement effective marketing strategies and ensure the availability of products and services when required.Market size and share
You have to determine the market size which involves estimating the total number of potential customers in the market. This will help in determining the demand for the products or services before launching them on the market. This mitigates the risk of offering products and services on the market for which there is no effective demand. At this early stage, it is possible to estimate the targeted market share.Niche market
You can decide to offer goods and services to either the whole market or a small segment or niche of the whole market. A niche market is a specific small part of the whole market for example a babies’ market that specifically consumes baby foods and other baby products. The babies have unique needs and their parents have unique preferences that will require the development of specific products and marketing approaches.Competition
There is also a need to establish the number of players offering similar products and services and the level of competition within the chosen market. The level of competition will guide you in deciding on the strategies to use to attract, win, and retain customers. A customer will only come to you if you are offering better value than the competition.
Distribution channels
A distribution channel is the route your products and services will take to reach the final consumers. You can decide to sell either through intermediaries or a network of businesses or directly to the final consumers. Your choice of distribution channel will depend on the product characteristics, market characteristics, available resources, and competitive factors.Profitability
A profit is the difference between the revenue generated and the expenses incurred in generating the revenue. When expenses incurred exceed revenue your business will make a loss. You can only achieve growth in your business when you make profits.Capital
You will need money or capital to invest in financial resources, physical resources, human resources, and digital resources among others that are necessary to build, run, and grow your business. The amount of money you require will depend on your initial resource requirements.Registering your business
You will need to register your business so that it can have a legal status under the law. A legal status gives your business both an identity and legal protection.The Key Success Factors (KSF)
Apart from the above, there are the following other key success factors that you should consider;Right team
As a person, you may not have adequate competencies in all key areas of your business line hence the need to attract, develop, and maintain the right team of employees that will give you the necessary support.Effective leader and decision-maker
You must have the capacity to make decisions that will produce positive impacts on the employees, customers, and other key stakeholders of your business.Patience
Success cannot be achieved overnight as it depends on small steps and the small successes that you make every day. You have therefore to be patient as success may take some time to be attracted.Keep updated information
The quality of decision-making depends on the quality of information that you use in decision-making. You have therefore to maintain up-to-date information for decision making.Conclusion
Venturing into business is a deliberate effort to implement a business idea or dream to make a profit.