Updated: July 27, 2022
A business can be considered a moderate to high-risk investment. However, it is also one of the best ways to make money and reach financial freedom.
Moreover, starting a business can be easy. Most of the time, it’s just a matter of having the courage and adequate resources.
But as most entrepreneurs know, starting a business is very different from making your business successful.
I remember a friend telling me that out of five new businesses, only one will continue to be successful after five years.
I don’t know where he got that information but based on experience, I’d say the truth is certainly not far from that statement.
Personally, I’ve had my share of failed ventures. Maybe I’ll find the time to share with you those stories in the near future. But for now, let me talk about what I believe are the main ingredients for new business success.
So how do you check if your business idea is a winner? Then assess yourself against these five key factors.
You love the niche and the industry.
Don’t venture into a business you don’t have passion for.
If you love sports, then don’t venture into the internet cafe business. If your hobby is gardening, then going into the fashion business is not advisable – unless, of course, you love clothes too.
Ask yourself, are you willing to run the business if it’s only making enough to survive? If yes, then that’s what I call love and I’d say you’re off to a good start.
You can imagine yourself working in it.
People go into business because they want to be their own boss. But ask yourself, are you willing to work for that boss?
Most entrepreneurs start out being self-employed. And this means that you should have the enthusiasm to learn and do all the major activities of your business.
Sure, a dim sum food cart business is a good venture. But can you imagine yourself putting on that apron to make and cook siomai? How about spending the whole day inside your food cart, selling sharkfin and gulaman to your customers?
Your business fulfills a need.
After checking your mindset, the next thing you need to assess is your business idea. And for a venture to be successful, you need to provide a solution to a problem. As they say, you need to have a unique selling proposition.
In general, successful businesses offer one or more of the following:
- A new or innovative product
- A cheap or economical alternative
- A product or service with great value and quality
Remember that your business is not really there to sell, but to satisfy.
You know who and how to reach your customers.
Who is your target market? Why would they buy your product or avail of your service? Can they afford your business?
Furthermore, do you know how your potential customers think? What are their habits and where do they often go? Most importantly, what motivates them to buy?
If you don’t know the answers to these questions, then your new business is starting out blind. Avoid this pitfall and do market research. Never rely on pure instincts. Back it up with hard facts.
You’ve done the planning and calculations and the results are good.
I always believed that a business should first and foremost, run smoothly on paper before anywhere else.
This means writing a business plan and doing feasibility studies and breakeven analysis.
Do the math and see how long it will take for your business to reach ROI under conservative circumstances. Practice different business scenarios and see how it will go. Never underestimate the importance of running your business on paper.
But during those first few days and weeks of entrepreneurial inspiration – when you begin to seriously consider starting your own business, these five factors will really help you find the right path towards business success.