How To Plan a New Business Venture
When you’ve come up with a viable business idea that you’re confident you can do, it’s time to start the planning process!
So let’s start with the obvious – no matter how cool your idea is, you will need to do some research before pushing ahead with it. It might turn out that you’re setting yourself up for a never ending uphill battle in a cut-throat industry. Or that you’ve overlooked an important fact that takes the necessary start-up funds from do-able to impossible, or worse, you could have overlooked a legal aspect and would be breaking the law! Anyone who has ever looked into something like printing t-shirts to sell will know the vice-grip that is copyright law, and just how many cool ideas it rules out!
Either way, the most reckless thing you could do is to act impulsively on a business idea and start pumping money into something that is doomed from the start.
Use all resources available to you and suitable for your business. Use things like the internet, newspapers, and online message boards to your advantage. The more resources you know how to extract information from the smarter your searches will be, the more productive your time will be and the more accurate your research will be.
Save everything that is useful such as:
- Bookmarking useful web pages (make sure you have some sort of bookmark organisation)
- Price lists of equipment you’ll need
- Suppliers – You may need to apply for trade accounts for some lines of work
- Competition – Bookmark people/websites already operating in your chosen field, even much larger companies or ones in other cities and countries that you won’t necessarily be competing with – You’ll need to research them more later, learn from the best.
Write down all the important stuff so you don’t need to repeat this research another time. Your time is money now. Working smarter starts here.
List of Research Topics For Your New Business:
Start up Costs
Equipment to operate:
Everything you need to get going and have an operational business. Some of the things you will want can be bought a later date, so be sure to distinguish the difference and avoid over-spending without thinking.
Essentials would include stock, tools, materials, shipping packaging if mailing anything, a van if providing a service on call-out.
Don’t forget the little things like anti-virus software if you’re using your computer a lot. That and good cloud storage (or USB back-up at the very least) are almost essential. These things can start to add up. Keeping good records is essential and keeping physical copies of your finances and cash flow means printer ink and paper.
Many often overlook this aspect, especially when it comes to digital professions such as e-commerce or web building. Plumbers, Electricians, and Engineers all need training. Your business is more than likely to have some sort of guidance and training available, whether it’s through a training course or an e-course, there’s bound to be skills you can work on.
If needing to rent workshop/office space, then you’ll need to account for a lease. You’ll usually need to take a lease for a minimum of 6 or 12 months so plan accordingly.
The cost of flyers, cards, adverts, website, e-mail marketing, sign-writing on a van.
If you’re working alone then your time counts, do you have living expenses covered whilst you pursue your dream?
Who are they?
How ‘big’ are they?
Are you competing with branded chains or other sole traders or both?
How do they operate?
For example: do they have a very interactive website to the extent of replacing customer service? Could this be good for you to emulate or should you try to avoid doing that and go for a more personal approach?
Are you able to break into this market with the start-up funds available to you? Are you within your means of being able to obtain this start up cost through borrowing?
Are you even able to enter this market at all? It’s highly unlikely you could get into making smartphones, or aspiring to be the cheapest clothing retailer around, those markets would take millions of investments.
Does your entire competition compete for the same target audience or are you in a field where your product or service can be tweaked to fit a whole new niche or sub-category of consumers? In other words is it adaptable?
Figuring this out and studying your competition will help you discover your market and learn more about your potential target audience, as you’ll more than likely be competing for the same customers with some companies.
Does your success rely on you securing and maintaining relationships with suppliers/wholesalers? It’s important to remember that some suppliers are unwilling to sell to smaller companies, or those ordering much smaller amounts than established companies.
Are there any legal complications that you can think of? Copyright is a common one!
Do you depend on the stability of the currency market? For example are you in the UK buying stock from China in USD? Leaving you relying on the Pound versus the dollar AND the Chinese economy. (There are ways to mitigate these losses and costs so don’t despair if you answer yes, just be aware that it can affect you. Just knowing can save you thousands).
Do you have a product/service at risk of being made obsolete? (Think VHS, Services replaced by the internet, Typewriters being replaced by PC’s, etc)
Understanding exactly how much all this is going to cost you, how hard it will be to compete once you’ve got going, and the things that are likely to stand in your way will help you determine almost straight away if a business opportunity is worth pursuing or not.
If you decide that your business ticks enough boxes for you to go for it, then read on, because there’s still plenty to think about. If you’ve come to the conclusion that it’s just not worth it, before giving up completely, think of ways to adapt the idea and see if you can come up with some unique twist that changes it. You never know. For example, the idea to start an FM radio station might not be the best, but what about Podcasts? Yes, Podcasts are quite hard to break into but that’s the general idea. See if you can tick a few more boxes with an adjusted take on the idea. If not, keep thinking. Your best idea may come to you when you’re not thinking as hard.
Before starting you’re going to have to decide if you’re working alone, with a partner or a team. There are different challenges between working alone and with someone else, but most low-cost business ventures are likely to be able to be run alone. In fact, unless suitably scaled over time it may be the only way to run some businesses. You need to make sure you’re okay with this before choosing your career.
If working with one partner, then don’t be hasty to pick someone. That can be your biggest downfall – The frustration of wanting/needing a partner on a project and being unsure as to who would be suitable. The best thing you can do is to write down a list of your strengths and weaknesses for this certain project, note down the areas you cannot do by yourself. This gives you a criteria of what you’re looking for in a partner. You want someone who has strength where you’re lacking. If you’re incredibly intelligent business wise but cannot use a computer to save your life, then finding someone extremely technical would be a great idea. If you’ve got most aspects covered aside from marketing and sales, then you only really need someone who’s a whizz with marketing, cold calling and perhaps sales strategy. Don’t just pick someone because you need someone, or you could find you’re splitting half your profits and you STILL need to outsource a ton of tasks that could have been avoided had you spent more time looking for a better partner.
If you’re putting together a team, you’re either going to need a bigger budget or a group of people who fit the bill who don’t mind working for % share of your company. Many people have offered a 5% stake (example) in a company in exchange for work in the early days of their business. Many businesses formed on student campuses have begun this way and it’s a great way for entrepreneurs with low funds to get started and for students/less qualified people to obtain work. Of course it’s risky in the sense that your team might not make any money ever, so you’re not likely to find someone hugely qualified by using this method unless you have a genius idea and get incredibly lucky, but its an option for those with low budgets and willing to accept lesser skilled people to get going. The risk for you here would be that your company might quickly outgrow these people you’ve just given stakes to, leaving you wanting to buy them out down the line. But, if this is your only option then it’s better to get started than to never start at all right?