When your career reaches a bottleneck, with unclear prospects, those who have lots of great plans might consider a start up. However, being a boss is completely different from being an employee. You must have detailed planning to start with and then implement your plan step by step in order to achieve a successful business.
Self-questioning for a clear direction
Starting a business is not child’s play. You must ask yourself some serious questions before you take the leap. Is it just because you are stuck in your present job that makes you want to jump? How much do you know about the industry you plan to enter? Is your cash flow enough to support business operations in the early stages? Are you willing to work around the clock at maximum effort? Is your character suitable for starting a business or being your own boss? Do you plan sole-ownership or to establish a partnership with friends? Are you open for different opinions? All in all, you must understand clearly how much you are willing to sacrifice in order to start a business!
Assessing the business nature through market research
You may have a “mighty plan” but maybe others do too! Therefore, market research is a must. Firstly, research whether there are similar competitors already in the market. If the answer is “yes”, what exactly are their businesses and how do they operate? What are your advantages and disadvantages? If there are no competitors, think deeply why no competitors exist? In fact, does a potential market exist? Is the target customer group not large enough? Is the expected net profit not enough to maintain operations?
Assessing viability through budgeting
Capital is crucial for starting a business. For small businesses, expenditure should be closely monitored because every dollar counts. Budgeting starts with cost and required cash flow calculation, including stock ordering and monthly operating expenses (inventory, rent, wages, overhead costs, etc.). By comparing the investment with the expected return, payback period, credit, liabilities, etc, you can assess the viability of starting the business.
Take establishing a start-up company as an example. Monthly rent for a private office at co-working space can range from HK$5,000 to HK$15,000, depending on the size of the office and the location. If a junior staff is required, monthly salary is likely to be around HK$12,000. Together with rent, computer equipment, stationery and other miscellaneous costs, the running costs may be around HK$280,000 per year. In addition, the costs of inventory, advertising and promotions constitute other huge expenses, so total minimum costs between HK$500,000 and HK$600,000 for the 1st year can be very common.
What is the perfect age for starting a business?
There are many start-up companies with young people as partners whilst there also many people who start their own businesses about the age of 40. So, what is the perfect age for starting a business? Well, there is no absolute answer. Young people are enthusiastic and energetic. Veterans of the workplace are experienced, mature and prudent. These all are necessary requirements for starting a business. For most people, the prime time of life is around the age of 35 and this can be the golden period for starting a business because they are still full of energy and have accumulated considerable experience, capital and business contacts, which are beneficial to business management and development.
Striving for capital instead of waiting for the “money”
People may think of venture loans. However, this kind of loan scheme usually involve complicated application procedures and longer approval times. As an alternative, applying for a personal loan from a bank can be an option. Take HSBC’s Personal Instalment Loan as an example. The approval time can be short for applicants who have payroll accounts or income proof records at HSBC. Such loans offer a maximum 60-month repayment period. In case you need more funds afterward, simply redraw the repaid loan any time, with no need to apply for a new loan again—very handy cash flow for sure!
So, do you want to start your own business now? If so, please make an enquiry to HSBC.
To find out more about personal loans, feel free to call us on (852) 2748 8080, or apply online now.
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