The number of people starting businesses burgeoned to a 13-year high in 2020, according to Business Insider. Although many of these businesses are in different industries than the one you want to start, there’s still a lot of competition out there. That’s why it’s imperative that you take certain measures in advance to increase your chances for success. With that said, following are some steps you should take before launching your new business venture.

Select the Right Product or Service

You’re going to be spending a considerable amount of time getting your business off the ground. That’s why it’s essential that you enjoy what you do or at least have some expertise in the matter. Launching a marketing consulting business after spending years in corporate marketing, for example, would make a sound premise for a business. Similarly, you could improve your chances of success by selling a product in which you have expertise.

Assess Your Financial Situation

You’ll need to have a grasp on the amount of capital you’ll need to launch your business. One of the best ways to derive this figure is by conducting a break-even analysis, according to Business News Daily, where the actual formula is Fixed Costs/(Average Price – Variable Costs)= Break-Even Point.

Identify Your Target Audience

A target audience or market consists of people who are most likely to buy your product or service. If you’re selling premium products, for example, your target audience may include people with incomes over $100,000. Target audiences can also possess certain behaviors or characteristics, like fitness enthusiasts. Aligning your product offering with the right target audience enables you to better reach them through your promotions. It can also help you better gauge your potential in a market.

Listen to Your Customers

One of the most important steps to succeeding in business is always knowing what your customers want. Customers’ needs and wants change over time. They may also have certain issues with your products or services and expect them to be resolved. The best way to stay in constant contact with your customers is through market research. Whether you conduct occasional surveys or simply ask for feedback, market research enables you to make timely changes or improvements to keep your customers highly satisfied.

If you take these essential steps before and while you’re running your business, you’ll dramatically improve your chances for success. Just make sure you keep records of all your sales and expenses and pay your taxes.