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Ensuring Success in Your Small Business Venture
Date Added: August 16, 2011 05:56:00 AM
Author: Shelissa Kern
Category: Business: Investing

Thanks to the Internet, the opportunities for working and conducting business online have grown by 200% since the mid-1990s. Yet, 90% of small businesses fail. Why? The major reason is that most people are not prepared to take on the challenges of managing and building their own business. Read on to assess your business preparedness. 1. Do you have the aptitude: Are you a self starter? Can you communicate effectively with suppliers and customers? Are you ready to work hard? Can you stick to schedules? If your answer to any of these questions is no, you are not yet ready for entrepreneurship. 2. Are you street-smart: Drop shipping resellers often run into scams. These include fake products, poor quality goods, and excess shipping costs. As a rule of thumb, you should not do business with suppliers who demand a fee. If you cannot find honest suppliers from the thousands of suppliers who advertise their products online, you will only get slightly burned in a business venture. 3. Can you acquire licenses and permissions: Resellers require a business tax license for ordering supplies. You have to look at considerable paperwork related to tax, shipping, and import and export of goods. If you think it would be hard to get the licenses, put your business plans on hold until you have an alternative. 4. Can you acquire finances: Some business ideas find many supporters. Others flounder and die because the required financial backing was unavailable. You need money not just to buy the first inventory, but also for hiring equipment and paying employees. And you need enough capital to support your business until you break even. Banks are the obvious choice when looking for funds, but unfortunately, few banks are willing to extend loans to small businesses, particularly home-based ones. If you plan to set up a home-based business, the Small Business Administration might be the right organization to approach for guidance and funding. There are many other loan programs run by the government, and you should do a little research to judge the feasibility of your venture from a financial point of view. If you are a female business owner, or belong to any of the special groups notified by the government, you can get substantial financial support through these organizations. However, if a few experienced people in the industry feel that your venture is not attractive enough for lenders, you will have to revisit your business plans. 5. What will you sell: Some products sell, and some do not. Computer related items are popular, as are CDs, books and toys. Niche products are in demand in select markets. Good market research is perhaps the most important part of starting a business; it allows you to spot opportunities and get ahead of competition. Sometimes, you have to push the market - persuade people to buy something (for example, if you feel people who buy a computer keyboard online may also need a mouse, make sure they are targeted appropriately). If you are bad at market research, handling your own business may not be the right choice. 6. Can you find suppliers: Finding suppliers who are honest and offer fair priced products is difficult. Another problem is finding suppliers in particular regions. For example, if you want to drop ship to Venezuela, you have to find a supplier as close to customer location as possible to save shipping costs. If your customer base is located too far away from suppliers, you have to be ready to pay more for shipping, or find warehousing facilities in a location. This involves more costs, and if you are not ready to take on the additional costs, you should look again at your business plans. 7. Can you rise to the occasion: Every business has its problems, particularly unforeseen situations that require quick thinking. Suppose a regular customer of yours orders a product and your supplier is out of stock, how do you react? Yelling at the supplier will not pacify your customer's need. A reseller dedicated to customer happiness will probably order the product from another supplier, or go out and buy it from a retail outlet - anything to keep the customer happy. To ensure that your business does not join the ranks of failed entrepreneurial ventures, you must build a business with sound basics. Don't wait for business to "take off" before you think about what direction to take, which markets to target, and how to plan finances. If you want a business "some day," remember that the some day may never come. Start small, but do start. Here is how you can start preparing to go into business even while employed: 1. Save: Put off buying the second car or a new car if you don't really need it. Use cheaper remodeling kits for your home. Reduce unnecessary household expenses. Save as much as you can. You will need the money when your business is still emerging. Drop shipping from home does not require a lot of capital when compared with other businesses, fortunately.
 
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