In the next part of our series of articles where we illustrate the possibilities of using AI in decision making, you will find out what to look out for before starting a business.
Before starting any business, it is important to carefully consider several factors:
A business plan: This document should include all key aspects of your business, including your business strategy, target market, competitive analysis, marketing plan and financial projections.
Financing: You'll need enough capital to cover start-up costs and keep the business running until it becomes profitable. Consider where this money will come from: personal savings, loans, investors, etc.
Location: the location of your business can greatly affect its success. Consider the availability, visibility, accessibility, and demographics of the area.
Employees: You'll need qualified and reliable employees to help you operate. Consider what roles they will need and how you will recruit and manage them.
Suppliers: you will need to find reliable suppliers for the Italian food and coffee you want to sell. Consider their prices, product quality, reliability of supply, and payment terms.
Licenses and regulations: Find out what licenses and permits you will need to run your shop and café. This may include medical licenses, business licenses, and more.
Insurance: You will need various types of insurance, including property, liability, and possibly workers' compensation.
Cost and Expenses: You need to have a clear understanding of all the costs associated with running your business, including rent, utilities, payroll, contractors, and more. You will then price your products and services based on these costs and expected profits.
These are just some of the key factors to consider before starting a business. It may also be helpful to consult your plan.
What could be the unexpected costs?
When opening a new grocery store and café, there can be various unexpected costs. Here are some examples:
Maintenance and repairs: equipment such as coffee machines, refrigeration equipment, or ovens may require costly maintenance or repairs. Similarly, it can be expensive to repair or replace damaged or outdated equipment.
Increased supplier costs: Food and beverage prices can change depending on various factors such as changes in supply and demand, weather, political situations, etc. This may mean you have to pay more for your supplies than you originally anticipated.
Insurance costs: if there is a business change or if there is an incident that increases your risk (such as fire or theft), your insurance rates may increase.
Tax costs: Tax laws and rates can change and may affect your costs. In addition, if you make more than you expected during the year, you may end up with a higher tax liability.
Employee training and training costs: If you hire new employees or if laws or regulations change that affect your business, you may need to pay for their training and education.
Marketing and advertising costs: You might find that you need to spend more on marketing and advertising than you originally planned to attract customers.
Licensing and permit costs: The cost of obtaining the necessary licenses and permits can vary and can change over time.
These and other unexpected costs can have a significant impact on your financial results, so it's important to have a reserve fund to help cover unexpected expenses.
What is easy to underestimate?
When opening a new grocery store and coffee shop, several areas are often underestimated:
Time and effort: Owning and operating a small grocery store and café requires a lot of time and effort. Many new entrepreneurs underestimate how much time is spent working, which can lead to exhaustion and burnout.
The complexity of inventory management: Proper inventory management is crucial to the success of a retail business, but it can be complex and time-consuming. Underestimating this area can lead to losing money due to wasted or insufficient inventory.
Employee Costs: Payroll is only one part of employee costs. You must also include the cost of benefits, training, recruiting, and other related costs.
The importance of marketing and promotion: many new entrepreneurs underestimate how much time, effort, and money it will take to effectively market and promote their business.
Costs of maintaining the store: In addition to the initial costs of opening a store, there are ongoing costs for maintenance and repairs, utilities, cleaning costs, utility fees, etc. that may be higher than originally anticipated.
Legal and regulatory requirements: Compliance with all relevant legal and regulatory requirements can be complex and costly. It can also be difficult to keep up with any changes in these areas.
Customer Service: Providing excellent customer service is critical to the success of any retail business, but can be challenging and requires ongoing attention and resources.
Uncertainty and risk: Many new entrepreneurs underestimate the reality of uncertainty and risk, which can lead to a lack of preparation for potential challenges and difficulties. It is important to have a risk management strategy and a plan for dealing with unexpected issues.
Market changes: Markets change rapidly and you need to be prepared for changes in customer behavior, competitors, supply chains, and other factors. It is important to have a strategy to adapt and respond to these changes.
The importance of networking: Networking and building relationships with your local community, suppliers, other businesses, and customers can play a key role in the success of your business. Many entrepreneurs underestimate how important active and effective networking can be.
Reinvesting profits: once a business starts generating a profit, it is important to reinvest some of that money back into the business, for example in marketing, expanding the product line, or improving the premises.
