About 50% of all start-ups never make it to their fifth anniversary, and only 4% cross the 10-year mark. That’s because many aspiring entrepreneurs are driven by the fleeting desire to mint millions and become their own bosses.
Sadly, they forget about the bitter roots that are the essentials of building a successful enterprise. Down the road, they become victims of insufficient capital, lack of industry knowledge, lack of market, unqualified staff, stiff competition, impatience, start-up costs, and burnout.
This article lays out the essential factors to consider when starting a business, including foreigners’ access to ITIN type loans.
Seven things to consider when starting a business
A business idea that works
Successful businesses start with unique, valid ideas that solve everyday problems and provide solutions to make people’s lives easier.
Here’s how to come up with a business idea that works:
- Be original and unique: That’s to say, innovate a new product or service that no other business has offered till now.
- Outsmart existing businesses: Offer better, quality goods and services than everyone else to grab market share in that vertical.
That’s only possible if you listen to people’s frustrations and complaints. Then innovate, or offer products and services that address their frustrations.
Industry knowledge and expertise
You need industry knowledge and expertise to put your business idea to work. That’s where research and careful planning comes in to build the internal capacity required to get your startup off the ground and keep it growing.
Craft a business plan where you stipulate everything to show that your business has a place in the market, the profitability of your idea, and practical steps to start and grow your enterprise.
Market or product demand
Lack of product/service demand is a top cause of business failure. You need to explore and carry out market surveys to establish whether there’s demand for the type of products/services you want to offer.
Take time to understand the current market size, future growth potential, and the market share you expect to grab. Then double down to your customers’ buying habits and the profit margins you expect from them.
Underestimating start-up costs are why many businesses bust the first year. Once you can’t pay rent, buy inventory or pay suppliers, you are on your way out.
Thus, you need to assess and estimate fixed costs, variable costs, and working capital required to set up and run your business until it breaks even. Once you nail your start-up costs and working capital needs, you’ll know how much you need to save or borrow.
Learn about all the start-up costs examples like rent, insurance, permit, machines, suppliers, payroll, research expenses, etc. After estimating funds for the essential elements, you have to check for hidden costs. You can’t run your business only with your working staff and machines. Adjust funds for other things like machine repairing, cleaning staff, business promotion, etc.
Lack of small business financing is the top reason why many businesses tank a few years down the road, and you need to have your financing options figured out upfront before you start.
Personal savings are a great way to raise initial funds. You need to have up to six months of expenses saved up in this case.
You can also go in with borrowed funds. Depending on your business type, you may need to look for short-term or long-term business loans.
Partner with lenders that can quickly offer you small business loans when you need to inject cash into the business. If you are a foreigner, work with lenders that provide ITIN loans.
To achieve strong support in the market, you must study your competitors. Dig deep into their marketing strategies, what they are doing right or wrong, their strengths/weaknesses, and pricing.
Armed with that knowledge, craft your unique selling point to differentiate yourself and start gaining your market share.
Your business can only grow and expand to the capacity of the people who work for it. Therefore, you need skilled workers who will provide a sufficient and efficient workforce to support your company’s vision, mission, and core values.
Use recruitment tools or hire a recruitment agency to find the best talent that will stick with your company. Again, think about training and compensating your workers well to stay motivated and carry out their responsibilities with expertise and confidence.
Importance of expanding the business
Starting a business is just the tip of the ice bag. To stay relevant to your audience, you need to keep your business expanding and adapting.
So once you have built a reputable company in the current market, you should begin looking for expansion opportunities.
Top benefits of expanding your business include:
- Increase your business revenues
- Expand your customer base
- Introduce new products/services into the market
- Hire new and skilled people who will bring new ideas to your business
- Expanding a reputable company opens it up to new funding opportunities
- Create brand awareness and brand recognition
How can foreigners access ITIN loans?
Starting and expanding your business comes down to one thing: access to funding. On average, small business owners struggle to obtain small business financing, but it can be harder for foreigners without proper identification documents.
Online lenders have proved to be friendly sources of funds to small business owners and minority entrepreneurs. Some even offer access to ITIN loans to foreigners without a social security number.
Visit the link in the intro to learn how ITIN loans work and how you can use this funding facility to start and grow your business.