Unlike the usual vainglorious pledges to lose a stone, learn Chinese or climb Kilimanjaro, the decision to start a business should never be made on the spot. If it is, it is almost certainly destined to fail – and in so doing, cost you a lot more than your unused gym membership.
In the beginning, there was the idea
Or at least there should be. But not everyone is lucky enough to have a Eureka moment, in which they think up something genuinely new and sellable.
Most business ideas grow organically, where someone with a lot of knowledge or experience of a particular field works out a way to provide a product or service better – be it more quickly, cheaply or intelligently.
But even the best ideas need fleshing out with plenty of research. Fail to do your homework properly and you risk falling at the first hurdle.
Many good businesses succeed not because they’re based on a flash of inspiration – but because they evolve an existing idea and combine it with great execution.
Make sure you know who your potential customers are, understand what they want and how much they will pay for it. Once you’ve established that they will buy from you, you must work out how you will reach them. Then you must shape your marketing messages and design your business model around them.
Funding for launch
Funding isn’t easy to come by but with a good idea, presented well, thought through and backed up with knowledge and experience, there’s always a way – whether it be your bank, friends and family, a grant, an ‘angel’ investor, or even crowdfunding.
But whoever you approach for cash, you’ll need a clear business plan. This should set out your stall – explaining what your product or service is all about, why you think people will want to buy it and at what price.
The more you can bolster your bid with solid facts, statistics and maybe some case studies showing what competitors have achieved, the better.
Always be realistic but don’t forget, if you can do something better or differently to what’s out there, or available in your area, you can create a market. Quality service and value for money will always be well received.
Other things to put into your bid include the estimated size of your market, how you intend to reach your customers and as detailed a financial projection as you can make. And don’t forget to give some details of the background, skills and relevant experience of you and your team.
Naturally, whoever you approach for financial help will want to know when and how they will get their money back, so make sure you can answer these questions too.
Blast off
Once you have a robust business plan and your funding is in place, there’s one more tip to follow before you light the blue touchpaper:
Surround yourself with experienced people and a good team. They don’t have to be paid employees; they could be mentors, advisers or investors – the important thing is they can provide insight or expertise to help you test your ideas.
Try to network with key people in your sector who have done or are doing similar things. People are often very willing to talk about their successes and failures, and this can open up new opportunities.
Finally, ask yourself some tough questions:
· Are you providing a product or service you really believe in, and that you know to better than the competition?
· Are you in a market with good prospects, doing something that people want to pay for? However good you are at something, it’s no good swimming against the long-term economic tide. Remember, even the best scribes didn’t last long after the printing press arrived.
· Are you delivering a great service to your customers?
· Is your business scalable? – i.e. can it grow without everything being dependent on you?
If the answer to all the above is yes, you’ve got a good shot at making the business a success. But remember, like those who make running a marathon or climbing a mountain as their New Year’s Resolution, many new business starters will fall by the wayside. It’s not enough just to know what steps to take – the important thing is how you take them.
Ultimately it needs lots of hard work, determination and courage to succeed with a start-up. Those who lack any of these elements risk ending up like the would-be marathoners who get no further than a gentle jog round the park on New Year’s Day, or the would-be ex-smokers who are back on the cigs within a week.
