Companies like Uber and Airbnb have led the way in the rapidly growing sharing economy. And the economy, also known as the collaborative consumption, shows no signs of slowing. It’s anticipated that 86.5 million people will be using businesses in this sector by 2021.
If you’re thinking about a small business in this economy, here are six important questions you’ll need to ask yourself.
Do You Have What It Takes?
When we think of the characteristics it takes to be our own boss, some important qualities come to mind, including self-discipline, tenacity, adaptability, and even a bit of risk-taking. But according to Entrepreneur magazine, there are six other personality traits that every person who is endeavoring to start a small business should have.
- The ability to collaborate.
- A strong sense of curiosity.
- A focus on the future.
- A desire to control your own destiny.
- A keen knowledge of technology.
- Highly motivated.
Is It the Right Business?
A successful business venture will require a strong demand for your product or service for starters. How do you know if your idea is a winner? Consider some of the following.
- Let your ideas marinate. Greg Isenberg, a venture capitalist and serial entrepreneur, said that after writing down several ideas, it’s best to wait “a few weeks to see which ideas really stick.”
- Test the idea by creating a prototype or finding a way to test your service.
- Invite industry experts to review your test and provide forthright criticism.
- Adapt using the feedback you received.
- Retest and take to market.
How Will You Finance the Venture?
There’s more than one way to finance your new business, and determining what’s best for you will depend on your particular circumstances. Inc. magazine suggests these options.
- Secure a Small Business Association (SBA) loan.
- Use a credit card.
- Find an investor.
- Offer a pledge of future earnings.
- Consider crowdfunding.
- Borrow against your 401k.
- Ask friends and family to invest.
- Take out a standard loan.
Also See: Facebook To Train 50,000 Female Entrepreneurs In Nigeria – #SheMeansBusiness
What Can Your Outsource?
Even if you can do it all, it may not be in your best interest. The three types of tasks you should consider outsourcing are:
- Anything that is repetitive in nature, like answering phone calls or bookkeeping.
- Any skills that are specialized. Writing HTML for email marketing, for example, likely requires you to use a specialist.
- Anything that needs an expert should be outsourced.
How Will You Grow Your Business?
Here are things you’ll need to do to grow your business.
- According to Siimon Reynolds, a frequent writer on entrepreneurial skills, the fastest way to grow your business is to commit to spending 80 percent of your day on sales. This means spending a lot of time face to face with both existing and potential customers. And be good at it! Relationships matter.
- Use social media to not only get the word out but to allow two-way communications as well. When you’re listening to their needs, you can respond appropriately.
- Do plenty of networking to get the word out. This includes playing host to activities that will bring potential customers to you.
- Build a quality website. According to Yelp, 85 percent of consumers use the internet to find businesses.
- Volunteer in your community. It’s a great way to give back and to get invaluable publicity.
- Measure your results and adapt.
Do You Know Common Pitfalls?
There are multiple reasons businesses fail, so be aware of what they are and work to prevent these mistakes.
- 42 percent fail because there isn’t sufficient need for their product or service.
- 14 percent fail due to poor communications with customers.
- 82 percent of businesses run into money problems and 29 percent run out of cash.
- 23 percent of businesses did not have the right team of employees.
- 19 percent of businesses fail to beat their competition.
With a $26 billion dollar estimated value in the sharing economy, there’s plenty of signs of positive growth to capitalize on. But this growth will only be possible when you’ve done your homework and adequately learned the ins and outs. So before you set out your new sign, ask yourself these critical questions.
Author: Dean Burgess
Website: Excitepreneur.net | firstname.lastname@example.org