As a small business you need to know who your competition is. This is one of the first questions you need to ask yourself. Realistically who am I likely to be competing against for custom of my service or product. Many people think of this question and say to themselves that either there is no competition, or the competition is so bad that they don't really need to worry about it. Either of those assumptions could be true, but quite often they mask a reluctance to actually assess real levels of competition and where it is coming from. This is a real mistake. Knowing who your competition is and analysing them allows you an entry-level into the market that is really important. Your competition however good they may be will have weaknesses or areas that they are not developing as well as they could.

It may well be that your competition had neglected certain areas of their business or product, it may be that they had not focused geographically on a particular area, or it may be that they do not aggressively market one aspect of their business or product as well as they could do. Any of these scenarios will give you a lead in to areas that you could start with you when business. Going head-to-head with an established business with no distinguishable difference doesn't give you an edge. Competing against an established business in an area where they are weak does give you an edge. Many people assume that established businesses run perfectly and do not have any weaknesses or areas of neglect. This is almost laughable if you think about it from a point of view of being a customer with any business you have ever dealt with. However when analysing competition about your own business people tend to forget this.

Knowing how to price or product is really important. Do not assume that your competition has priced their products as keenly or as low as they could do. Far from it they will priced their products at a level that they can get away with. If you can undercut them by any significant margin again that will give you a significant edge. The companies often take for granted a lot of their customers or clients and become almost institutionalised in how they deal with things. As a relatively new company start-up you can take advantage of that. Price is a significant lead in for many customers and can determine what they are buying and where they are buying from.

There are many other questions that you need to ask yourself at a practical level about how to set up your own business or be an entrepreneur. You need to decide on the legal basis of your business, whether you are going to be a sole trader or a company or a partnership or whatever. You need to know what rates of tax you are liable for and when they are due. You need to know whether you need the services straightaway of an accountant or lawyer, and if not immediately know where you can get hold of one if you need them. As a small business it is essential that you know what types of insurance you need, and what types of liability you could be at risk for concerning premises, product liability, business interruption etc.

The question of how you market or advertise your business is again hugely important. You might have the best business or service or product in the world, but if no one knows about it then it's not a huge amount of good. Inevitably advertising and marketing costs money and you have to decide how much your budget is and where you want to spend. The good news is that there is an abundance of choice available especially online as to how to market or advertise your business. Social networks such as Facebook and Twitter are widely used as marketing tools, but this needs to be done carefully as you can easily alienate people who don't want to be marketed at online. Google also has its own contextual advertising program which delivers exceptionally good results and can be very cost-effective depending on budget.

The other question which is ready important and no one ever asks is to ask yourself how you are going to enjoy yourself away from the business. Remember to have fun.

Author's Bio: 

Peter Main is freelance writer who has spent almost twenty years in the insurance industry, working at Lloyd's of London. He writes extensively about small business insurance and in particular about how understanding the various factors that make up the different liabilities that small business's may have to deal with, such as health insurance