There is always an idea that pops in and the passion that motivates you to deal with a particular product. Starting up a business can be complicated as well as well as interesting if it succeeds. Here are some of the factors that you should consider and will boost your business performance tremendously.
Market or demand
Before starting up a business, you must access the availability of a high demand for your cakes. The key questions are “to what extent will the product be demanded?” “Who will be the target market?” Identify if your business can serve both in the international and local market. This can be determined by analyzing the area of business or carrying out a survey about the particular product. If you plan is to sell the cakes locally, the demand needs to be favorable whereas if it’s international, you need to research more about it.
Before making up your mind on the business, you must first gather information about the competitors, factors required to compete with them and their strategies to success. The business will depend on the demand and supply gap, that is, if the supply is low, the demand will tend to be high thus you can venture into the business despite the competition. To overcome market competition you should make your product different and unique as compared to the others, popularize your product, and have a potential strategy that will keep you going. However, if the product is a monopoly, competition won’t be applicable.
Acquiring the right location may be difficult; therefore one requires a clear decision making depending on the product to sell. One needs to be located in a developed area that has a high population and can easily be accessed. Facilities such as raw materials, good transport system, water, and electricity should be available at affordable costs. You should not be located where the competitors are large in numbers.
As the owner, you should have the knowledge and expertise on how to go about the business. You need to be creative, innovative and inventive. Limited knowledge may lead to poor decision making or getting fooled by corrupt suppliers and the general public.
Total projects costs
The total project’s costs include the startup costs, working capital, closing capital and net profit. The startup costs may be high but you can minimize it by reducing the working capital and maximizing the profits. This requires a good utilization of resources. Working capital includes the inventory and credit offered to customers in addition to the provision of bad debts and other expenses.
Legal restrictions and regulations
When setting up your bakery business, you need to comply with the country’s rules and regulation by providing detailed information about your business. Consult a business expertise to be advised of the legal compliance details. This will enable them to determine the tax you will pay depending on the incomes and register the business.
Initial cost capital can be acquired through own savings and investment or fund borrowing. Before borrowing, analyze the most convenient institution, the rate of interest charged and the repayment terms and conditions. The funds should be consistent with the business capability for it to be able to repay on time.