If you have a business idea but are not sure what the next steps are, this article will help you.
Key steps to take when starting a business
Research and Refine
Firstly you should objectively evaluate whether your idea really does hold water and are confident that others (outside of your fans and family) think the same. You should have created a prototype (if viable) or model to aid gather data and test the public’s response. You may conclude that no-one likes your idea, and it is back to the drawing board. Don’t worry, better to have found out now, than to have spent thousands of pounds and years of your life arriving at the same conclusion in a harder way. The next idea you have may be the one that changes your life (as it did for so many successful entrepreneurs before you). You may also hear that your idea is highly desirable and perfectly conceived. The more likely outcome is that you are onto something but that it needs tweaking at best, and revamping at worst. If this is the case you should reiterate until the idea is refined.
Now it is time to make a business plan. The likelihood is that so far you have probably encountered a few hiccups along the way. Comments you didn’t initially like (but learnt from) or other practicalities that were unforeseen. Believe it or not, this is good. You will have no-doubt had your determination and desire tested, along with your ability to adapt and problem solve. You will need these skills in the future. If you have been lucky enough to sail straight through this stage (we all envy you) but bear in mind it won’t always be this easy.
Many of the people we have contact with dread making a business plan. It elicits almost the same kind of response as an annual tax return. It is actually an extremely useful and simple tool that is sometimes overcomplicated and over-analysed. Simply put a business plan is a description of what your business will do and how it will carry this out profitably. If it can clearly describe this and support it with some facts and figures you have ticked most of the boxes. There are many downloadable templates with easily marked sections to be completed than can aid your plan. You can re-write this as many times as you like and also change it as your business changes. What is important though, is that you have a clear idea on how you are going to make money from this idea.
Begin with an executive summary. If you had to explain your business idea in a nutshell what would it be? This is a good exercise in distilling the concept in a crystal clear way and will be useful if you have to articulate the idea to investors or suppliers.
Next describe the business structure, and how you intend to seed this. This may sound daunting, but you will need to have both a legal entity and also the money to get started at some point. Don’t get too hung up on the legal side to begin with, many businesses create the legal entity once money is coming in and are dormant until then, but even if that is the case, you should consider the structure. Take a look at 'Deciding which business structure is best for you' for more info. Most SMEs opt for a limited liability company, but limited partnerships and sole traders are sometimes more appropriate.
Next describe what you sell to your market and who that is. This should have been thought of from the start, and then reinforced through your market research. Maybe it is fashionable accessories to 15-25 year olds, or it may well be baby products to new parents (we all know what a lucrative market that can be). Give specifics here that highlight what makes you different, and how big the market is (also homework you should have done in your market research stage).
Plan and Review
Business strategy is the next key section to fill in and probably the most extensive. This describes how you will go about selling your goods/services to your target audience, and should include some financial projections and timelines. To properly fill out the business strategy you need to know your market, facts and figures and also have an idea of how long it will take to achieve certain milestones along the way. Some tips here are, put down more information than you need. It is always easier to refine down good content than to add. The other tip I would recommend is to review your strategy at different times and after talking it over with a friend, colleague or consultant. You gain an additional point of view, and revisiting (even if it is only yourself re-reading) can make things clearer with fresh eyes. A final tip when it comes to any financial projections try to come up with several alternative cases, good, average or bad. This will allow you to see the margin of error or profitability that you have assumed in your business.
Many business fail because of a lack of planning and commitment. There are many areas in business you have no control over such as inflation, unemployment, recession and foreign exchange rates. For the areas you can affect the result, make sure it counts and plan your success.