How Do I Get My Small Business off the Ground and in to a Profitable Enterprise?
You will learn
- What to research when setting up a business
- How to determine your costs
- How to decide upon the operation of your business
Turning what seems to be a great business idea in to a profitable enterprise is one of the biggest challenges you can attempt. If you have a steady job, you have much to lose. If you have no job, you may not have any funds either. So, where do you start?
"In business, you get what you want by giving other people what they want."
- Peter Drucker, Business Guru, Author, Professor of Business
So, before you can launch a business, you need to do the research that proves you have a product or service that people will want to buy. Before you can do that, you need to be able to define the kind of customer you think you should approach – in other words, you need to do a marketing plan.
People think that marketing is something for big companies, but every business needs to understand and apply the basic principles.
Every product has a price point - a selling price which people are prepared to pay for the item. It is decided partly by your costs, but also by what the customer will stand.
If you ask for a price that fails to meet these challenges, then you will either make no sales or you will have very little profit.
Identify your potential customers by some kind of categories that you can use in order to reach them. It might be their age, location or lifestyle.
Test the appeal of your product or service to them and refine your offer until it looks likely to win sales.
Work out how you can promote to these potential customers. What methods and how often? What will this all cost? What sales will it bring?
Now you need to think about the operation. Will you work from home or rent premises? Will you need to buy equipment or stock? Will the business just employ you or will you need staff? Answering these questions will also mean calculating more costs which your selling price will have to cover. Are you still on track?
If you are still on track after answering the above questions, then you will need to think about any legal matters. For example, licences, insurances and so on. This could mean more possible costs to factor in.
Finally, you need to turn all of these costs and sales prices in to a forecast of how the business will work from a cash flow perspective. You are likely to start quite slowly and build month by month. Often there is a lot of money spent to get started, and not much coming in for the first few months. What does that mean in terms of paying the bills? Consider the implications for both the business and your home/personal life.
You may need to raise money to buy things and get started, and have more money to fall back on in those early months. Will you approach the bank or the Start-Up Loan Company (a Government backed organisation) to get a loan? Consider whether you would be able to repay any loans out of your profits.
Dealing with all of these questions will help you to build a Business Plan which will show you whether you have a potentially viable business.
There is loads of help for these processes, so have look on the internet, or contact your local Council to see if they have advisers you can meet. You can also contact the Growth Hub for business advice at firstname.lastname@example.org.
By following this advice, you can start your business with confidence.