7 Golden Rules of Starting a New Business

What are the golden rules of starting a new business? Or rather, the golden rules of succeeding with a new business?

Anyone who is planning to start a new business - be it startups or business owners who are planning to exit a business and start a new one, go through the same dilemma. What business to venture into? How to choose the right investment? What are the chances of success...?

There is no hard and fast rulebook for starting and succeeding in a new business or everyone who started a new business would have succeeded in it. Every business has its own strengths, weaknesses, opportunities and threats. But there are some fundamental principles that help you lay a strong foundation for a new business and help it grow into a flourishing venture.

Do what suits you best

If you are a start up, choose a business venture that excites you; something which you love doing. Never choose a venture only by its financial possibilities. There is no fun in building up something which you don't enjoy. If you don't like what you are doing and do it only because you think it offers better possibilities of growth, then success, even if it comes your way, will be temporary or unfulfilled.

If you are a business owner and you are looking to diversify, choose a venture that synergies with your current one. This will not only help you be in a stronger position with better business knowledge of your industry, you will also enjoy your new venture as a fresh area of growth. For instance, if your business deals with supplying food materials, you can explore areas in processed foods or food products.

Fulfill a need

Fulfilling an existing demand is always safer than creating a new demand. It is one golden rule that always works for new businesses that do not have the financial muscle to start a farm fresh new concept and convince prospects that they do need what you want to sell to them. It is safer to venture into a business which produces products and services that fulfills a need which customers know they have.

But remember to identify the USP (Unique Selling Proposition) of your product/service to make it stand out from the crowd of competitors. Once you yourself are convinced about your product/service, you will be able to convince your customers to buy from as opposed to your competitors.

Are the margins healthy?

The growth possibilities are always better in businesses where you can have a healthy gross profit margin. If the difference between your cost price and selling price is narrow, you will not have much left to plan expansion, hire more people, promote your business or save for reserves. Therefore, choose a business that offers a better possibility of profits.

Give the right picture

One golden rule that many start ups and new businesses give short consideration to is promising more than what they can deliver. Don't oversell your products or services by promising to your customers something you can't deliver. It is always better to beat expectations by providing a better-than-expected product than handling disappointed customers who expected more than what they received. Be truthful about your products and true to your buyers.