Starting your own business is a big decision. Make sure that you start a business for the right reasons. Starting a small business involves significant financial risk and it does not have the safety net associated with regular paid employment. For those who have considered this fully and wish to proceed then consider these startup tips.
Starting Your Own Business
Whilst it is an ambition for many people to start a business there is a high failure rate so it is imperative to:
– Research the market. Ensure that the business idea has a good chance of success — at least on paper. If the market is entirely new then use close comparisons to give some indication of market characteristics. It is important to understand potential customers, the value proposition that will attract these customers, competitors and so on
– Consider legal structure options for starting a business such as forming a new company, buying an existing company, setting up a partnership, buying a franchise… Understand the legal obligations for each vehicle and both what is needed to start and close a new business
– Business Plan. Understand and document the plan for the business and what is expected in terms of targets for profit, customers, pricing, operating costs, assets, liabilities and cashflow. The intent is to take a calculated risk rather than a reckless risk. Undoubtedly the plan will need to change as time goes on so it should be maintained and updated
– Customers. The business will survive or die based on the ability to get customers, ensure that key business processes for competitive strategy, marketing and sales are understood and that the business has a compelling value proposition for the potential customer
– Money. Start the business with enough money and have money set aside to allow the business some time to grow and establish itself
– Consider who will be part of the business and ensure that the organisational structure and decision-making authority is agreed. This is especially important for a business operated by family and friends
– Where will the business operate from? Home? Leased premises?
– Support services. Accountants, legal, financial, tax and business advice, book-keeping, insurance…
– Develop a website strategy, whether it is for information or e-commerce, a business must have a web presence
Start a Small Business
Start a small business for the right reasons, not just for money. Plan the business carefully before starting and then make the decision whether to start or not. Government statistics show a large number of small businesses fail within the first two years so the business plan must cover that period. Finally, focus on getting sales and controlling costs.