How to start your own business
Much has been written about the new world of business and employment, which relies on a multitude of new start up companies’ creating their own employment.
Gone are the days of jobs for life, full employment, and one company careers. Here instead is a different way of life which means you are in charge of your destiny. And your own employment.
First, though you need the business idea. You need to have the idea and the vision to implement it.
Broadly speaking there are two main types of new business.
First the small business, usually run by a sole trader, offering services such as hairdressing, painting and decorating, accounting, etc. These are designed to provide employment for the proprietor and some associates, perhaps their children.
The second company is one which is designed to provide goods or services nationally and globally. This company may also provide hairdressing services (think Vidal Sassoon, Nicky Clarke, Andrew Collinge, John Frieda, Charles Worthington, and Barbara Daley) but the entire business approach is different. It is predicated on celebrity clients, hair products, diffusion ranges, and endorsements. Not on the business that can be generated by one person.
What kind of business model?
So that is your first decision really. Is this business intended to pay your bills, and fill your days until you can retire? Or are you going for global domination: building a business that will live on long after you.
Because if you are going for the second option, it is best to choose something that is scalable; where you can build a brand and a reputation, take on staff to deliver your product or service.
It is generally acknowledged by business experts, gurus and consultants that any company can be made profitable as long as the public want to buy the product or service that it offers.
The route to expansion and profitability with an “in-demand “product is relatively easy. However if no-one wants to buy the product or service, or needs to buy it, or can be persuaded they need to buy it, then the task is infinitely more difficult. If not impossible.
So you need a product or service, and a vision of the business you want to build.
If you try to build a business with a product or service no one wants or needs, then the business will fail. You will lose money, and waste your time.
That is not to say successful entrepreneurs have never had failed business. On the contrary, many of them have had several. But they do cost time and money, and if possible you want to shorten the odds in your favour.
Should you follow your career dream?
Many people advise “do what you love “but that can be a dangerous route if what you love is not what a large proportion of the population loves. Or large enough and niche enough to afford you the income you want to make.
Part of the definition of being successful is having the ability to spot a business idea where no-one else sees it.
Remember the scene in the movie The Social Network about the founding of Facebook, when Mark Zuckerberg suddenly realised the potential of what he was working on? Whether or not the scene was true to life, there must have been a seminal moment when the global potential became clear.
In today’s world of fast changing technology, there will be many more internet related fortunes still to be made. Some of them will be revolutionary, in the way that Yahoo, Google and Facebook and Twitter have been.
Others will be essentially the “taking online” of services that existed before, such as Just Eat. Who knew there was a fortune to be made from taking takeaway food ordering on-line? Visionary!
So take some time to think carefully about the product or service, the vision and the company model.
Work in an area where you are knowledgeable
It is a good idea to select an area where you have some knowledge of the industry. If you don’t have first-hand knowledge of the industry, it is also advisable to work in the industry in any capacity, while you are putting your plans together.
Educate yourself about the industry you have chosen to work in, but don’t do it on your time and money. Learn everything you can about running the business you work in.
This will give you an insight into the industry and may raise issues you had not previously considered. You may even decide this is not the right business idea for you. Consider that a lucky escape, and move on to the next business idea.
The formal business process
First of all you should do some market research, and develop a business plan. The marketing plan will be an integral part of this document.
The marketing plan can be defined as “having the right product in the right place at the right time, at the right price “
Then you should consider legal issues such as insurances including disaster and liability insurance, health and safety, any regulatory requirements.
Then you need to form the company legally, raising funding if necessary.
All this before you even think about producing or supplying the product or service!
Do you need premises, equipment, staff, vehicles, IT equipment?
Then you need to consider the production and supply of the product or service that is going to make your fortune.
The marketing plan may call for some marketing to be done before the product is delivered.
Then begins the cycle of sales/delivery, and assessing customer feedback, refining and improving the product and marketing.
It is worth remembering that statistically most new businesses fail. More than half will fail. That doesn’t mean you won’t eventually run a successful business, but even our most revered entrepreneurs have failed businesses behind them.
So it is a good idea to start small to minimise the risk. Once you have a trading history you can better gauge the likelihood of success and invest more of your investors’ or your own money.
So to begin with, work from home if you can. Both Microsoft and Apple began life in someone’s garage. If you have to have premises, keep them small to minimise outgoings.
Keep stock levels low, buy only the equipment you have to have. Buy used furniture and equipment rather than new.
What personal qualities do you need?
Anyone who runs their own business needs a particular mix of qualities, including but not restricted to;-
Ambition, drive, determination, intelligence, creativity, social skills, self-belief, optimism, tenacity, acceptance of risk, strong work ethic, acceptance of criticism and failure, leadership, tolerance of stress, decisiveness, energy.
Remember the difference between a successful business person and an unsuccessful one, is that the successful person keeps trying till they succeed!
Whatever you decide to do, good luck!