Why do you want to start a business? There are plenty of answers – but the answer that you give might tell you a lot about the business you should be running.
So if you just want a little extra money, perhaps you should consider a sideline. If you want more freedom and the chance to be your own boss, perhaps you should leave your 9-to-5 job and start something new. If your answer is that you want to use a skill or area of expertise that you already have things are simpler – but otherwise your first need may be deciding what kind of business to start.
You need a big business idea
If you don’t know what kind of business to start, you may need to do your research. Successful business ideas are often ahead of the curve. Look at the trends and technologies on the horizon and how you might move into them. Innovations related to home technology for example might be the next big thing. But if you don’t believe that you can take on the likes of Apple and google, don’t despair. There are business opportunities from cleaning to dog walking that don’t require genius or multimillion budgets.
If you have a business idea that isn’t completely new, it could still be the basis of a thriving business. It is has been done before, don’t despair. Simply look at the current offerings and focus on how you can create do it better, cheaper or faster. For example, window cleaners have worked with ladders for generations. New technology allows cleaners to keep their feet firmly on the ground, and use extendable pressure washers to clean more windows in less time. It can open up new customers too – the new style of cleaner can work on widows conventional cleaners simply could not reach.
You need market research
Before you launch your new business, whether it is a groundbreaking new concept or a new take on an old favourite, ask the key questions. Is anyone else already doing what you want to start doing? If not, is there a good reason why not? And perhaps even more important – what will people be prepared to pay?
There are plenty of ways of doing this. Start by looking at your potential rivals or partners and put yourself in the position of a customer – you can make telephone calls or do your market research face to face. Try to get a feel for the costs involved and the services provided. Then start talking to potential customers. Find out what they would be prepared to pay for whatever it is you are thinking of offering.
You will have to be scientific about this. You can’t just do online research, or only talk to people you know. This is likely to be useful for planning the questions you will ask in the real world, to real potential customers. If you can, let people see your product or service and see what their take is on it. A fresh set of eyes can help point out a problem you might have missed, and their feedback is valuable to fine tune your offering.
Don’t expect everybody to like your big idea, and don’t be discouraged if some people are negative. But if you start seeing a pattern and find that not enough people share your enthusiasm, it is probably time to slow down and take the time to consider carefully what they tell you. Figure out why someone liked or didn’t like something. How could you make it better? What would be a better solution?
Also, one way to help you get through negative feedback is to create a “wall of love,” where you can post all of the positive messages you’ve received. Not only will this wall of love inspire you, but you can use these messages later when you begin selling your product or service. Positive reviews online and word-of-mouth testimonials can help make a big difference.
You need a business plan
A business plan is simply a written description of how your business will work. It is important, because it will help you work out on paper all the details which you need to cover in the real world. So your plan should show how you will make money and who from, and how you will need to invest to do so.
This is not something to rush. Start with the name of your business. This can be crucial, especially with the web. Making a unique memorable and searchable name is essential for any business, which is harder than it sounds. This article can help you avoid common mistakes when picking a name.
Next comes an executive summary. This is a high-level summary of what the plan includes, touching on the company description, the need the business is solving, the solution and why now. Being a summary, you should probably complete this section last.
Then provide a business description. What kind of business do you want to start? What does your industry look like? What will it look like in the future? What are your own strengths and weaknesses, and how will they affect the business you want to run. So if you are a qualified engineer, you will have a natural aptitude for an engineering business. It is a core strength which you should include.
Look at the market you will serve. What exactly is your target market, and how can you best sell to the people who make it up? Will you go door to door, open a shop, set up a website?
Follow this with a competitive analysis. What are the strengths and weakness of your competitors, if they exist, and how will you beat them? If your business is so innovative that you will not have any competitors, how is the need you will answer being answered now?
Only now can you define your product or service. Define what you will do or produce, and create a budget for that product or service. You will need to go into every detail – after all this will be the core of your new business.
Operations and management plan. How will the business function on a daily basis? Who will do the work? How will they be paid?
Then look at the finance. Where is the money coming from exactly? When and how will it reach your bank account? What sort of projections can you create? You need to show what the profits and the costs will be if you meet your sales targets – and what you will do if you don’t.
You need a team
You may be able to start a business yourself, but if you are serious about taking it further you will need a team who share your vision. You may have to start ith part timers and even freelancers who can work as needed but sooner or later you will need to take on full time people who can offer the dedication you need. You will be working hard to build your business, you want people who can help. In return, they will want paying. Good people are never cheap – but you really can’t afford the other kind.
You need funding
Once you have a business plan, and made full use of it to fine tune your idea, you are ready to start looking for funding. You will probably have to put up your own money to set up your business, but you will probably need to borrow as well. Finding lenders willing to advance funding for a business startup can be difficult, but things can be a little easier if you have a good business idea and a professional looking business plan.
There are plenty of options. Friends and family may be one place to start, but you should also find out about government grants, crowdfunding and angel and venture capital investors. If you have a strategic partner or customer lined up you may be able to approach them. If they want your product or service enough to pay for it, there’s a chance they’ll want it enough to fund it too.
You need help
Business finance has moved on a great deal over the last few years and is no longer simply a matter of calling on your bank manager. The good news is that there are now many specialist and alternative lenders who will be keen to do business with you. Finding the type of finance you need to get your business plans up and running, might mean calling in a business funding expert who can look at the whole business lending market, and find those lenders who can help entrepreneurs with a good idea, and provide the solutions that will help your business be a success.
