For many, the thought of launching a new business is an exciting endeavor filled with promise and opportunity. But without the proper research and preparation, an adolescent business soon turns to collapse. In fact, only 40% of small businesses are turning a profit, and over 50% don’t make it past their fifth year.
Don’t let your venture become another statistic. Consider these seven crucial factors before starting a business.
As the age-old adage goes, you have to spend money to make money. With this reality in mind, dipping into the red–before your business finds a home in the black–may just be a necessary step for your business’ success. Remember, these start-up costs are an investment in your vision, a vision that could swing open doors of opportunity and make your brand a household name.
So, what startup costs should you plan for? Start by carving out room in your budget for equipment. For example, should you choose to launch a primary care practice, you’ll need to purchase audiometers, AEDs, vital signs monitors, body weight scales in addition to waiting room furniture and break room appliances.
With equipment squared away, next on your list of startup costs will be incorporation fees and office space rental costs. Fair warning, renting an office space will monopolize a sizable portion of these initial costs, so be sure to budget accordingly. In some cases, office space can exceed $1000 per employee, depending on the nature of the space.
Other startup fees to consider include the following:
- Utilities (water, gas, electric, internet, phone bills, etc.)
- Marketing (signs, pamphlets, brochures, banners, business cards, etc.)
- Website costs
- Supplies (wound care, gloves, syringes and needles, stethoscopes, etc.)
- Payroll costs (typically 25% to 50% of your total budget)
- Insurance costs (general liability, workers’ compensation, errors and omissions, etc.)
- Travel costs
The first detail to resolve is how you will fund your new business. Luckily, there are many financing avenues to follow as a small business owner. Some of the most common methods for financing include savings, credit cards, and friends and family. If you don’t have sufficient personal savings, or you don’t want to risk damaging your credit score, consider looking into Angel investors and crowdfunding. That way, you’ll gain funding from individuals or companies in exchange for an equity stake in your business. Another excellent option for financing your enterprise is an instant small business loan. After completing a straightforward application, you can gain access to funds within 24 hours without offering collateral.
After creating a solid business plan, the next step is determining the demand for your product or service. If you plan to launch your business locally, assessing the market might require surveys or focus groups. Details to consider in surveys include growth potential, buying habits, market share, and market segments. To reach a global consumer base, you’ll need to conduct broader research. Thankfully, the internet and social media have streamlined the process of reaching target audiences around the globe.
Entering the industry without knowledge of your competitors is a recipe for failure. Unless your product or service has a monopoly on the market, you’ll need to construct a strategy for contending with industry leaders. Start by analyzing how your competitors price and sell their products and determine how they’ve positioned themselves with consumers. Once you’ve identified potential strengths and weaknesses, you’ll have a much better chance at establishing a unique selling point.
Don’t underestimate the technology needed to make a business successful. Between machinery, software, and office equipment, acquiring modern technology ensures your business runs smoothly for years to come. For example, investing in Customer Relationship Management Software allows you to track consumer growth and increase potential leads. Other standard business technology includes accounting systems, inventory control systems, online data storage, and cybersecurity software.
Determining a location for your business depends on what kind of market you wish to enter. For retail businesses, a sizable space with heavy foot traffic is advantageous. If you plan to purchase a manufacturing unit, consider locations with low electricity and water expenses. Of course, always keep your budget in mind when searching for the right place for your new business.
Your business might start with only one or two employees, but you will need efficient human resources to expand. Consider going through a recruitment agency to find qualified staff or submit job postings on popular hiring sites like Indeed and ZipRecruiter. As your business grows, be sure to develop salaries and perks that maintain employee satisfaction.
Ask any successful entrepreneur, and they’ll tell you the most important skill to develop is a can-do attitude. Chances are you will encounter many naysayers as you build your business, and believing in your venture is the only way to rise above. Conferring with other aspiring business owners is another great option to support each other and maintain a positive perspective on your professional future.
Chasing after your dream to launch a new business is no small feat, but when done correctly, leads to great rewards and satisfaction. Should you choose to overlook these crucial factors, your healthcare business launch can quickly go south–whether these wrong turns are in the form of an overdrawn equipment budget, failure to allocate room for marketing or website development costs, etc. With this guide at your fingertips, you’ll navigate the new venture with confidence.