So you want to start a business? Starting their own business and being their own boss is something many people dream about. Before you begin, in order to maximise your chance of success it is wise to ask yourself some searching questions to be sure that you have what it takes, and that you are tackling this new phase of your career in a focused and effective way.
The starting point is to establish your personal needs and objectives in terms of personal, family, and financial goals and expectations. Remember in all things to be tuned in to guidance from the Lord and to always plan prayerfully. You do not want to wind up committing yourself to some business that is not in line with the Lord’s will for your life.
Hint: – When identifying personal values and needs evaluate them according to whether you can compromise on them or not. In other words are you flexible about them. Let’s say that the distance from your home to the business is important to you. How flexible are you on this point – is 10 km OK or is it too far/near, and so on with each need and value.
The next step is to ask yourself what skills you have. When you get down to it you really do have a great number of skills and you need to evaluate these in order to identify any gaps between the skills you have and those needed to run a business. Typical questions would be:
Do I have…?
Administrative skills – record keeping, personnel records, etc.
Management skills – organisation, planning, control, leadership, etc.
Technical skills – product knowledge, service skill, etc.
Financial skills – bookkeeping, billing, order processing, etc.
People skills – sales, customer relations, personnel management, etc.
And, then ask yourself…
Are these related to my product or service that I want to sell and the business I want to start?
Now assess in which of these areas you have the necessary know-how, and in which areas you expect to learn on your own, and in which areas you will need to hire others to handle them for you. You can make notes on your skills about each area below:
Administrative – ________________________
Management – _________________________
Technical – ____________________________
Financial – ____________________________
People skills – __________________________
Next identify the skills gaps and how will you fill in the gaps? Possibilities include:
Hire experts – as full time employees or part-time;
Use consultants – just for advice or to help in certain areas;
Learn by reading and self-study – books, courses, etc.
Attend courses – full-time, after-hours, etc.
Step three is to examine your personal financial resources and to determine how much of the financial resources needed to start and run the business will have to be financed from outside sources. Remember that you should have working capital to take you through the start-up phase and through the period until the business can stand on its own financially. You should also be able to meet your personal financial obligations and service any loans during this period.
The fourth step is to decide on the type of business you intend starting. For example, will it be a service type business, a manufacturing business, or a retail business, and in what type of industry will you operate. (Food, education, stationery, motor spares, motor service, retail goods, etc. etc.)
Step Five – Initial Market research – Who will be your customer? Describe your customer in detail (remember any work done here will be invaluable at a later stage when preparing your business plan.). Typical attributes to consider are:
Number of people per household
What will make them come back?
Again and again and again?
Step Six – What is your Product? Typical questions to ask yourself in this area are:
Is the product already sold in the market place – how and where – if not, why not?
What ancillary products are there?
Quality – what level of quality will I be trying to maintain?
What specific competencies do we have?
What is the unique selling point?
How will the customer still need the product 5 years from now?
Are there new ways of doing things?
Step Seven – what about competitors? They can make or break your business and you can also gain valuable insights into the type of business you are intending to start by studying carefully how they run their businesses. Questions to think about are:
How many are there?
How do they do business?
What are their strengths and weaknesses?
What image do they portray?
Resources – what sort of resources do they use/have at their disposal?
Prices – what sort of prices are they charging?
How could you do better or differently to them?
How will they feel when you enter the market?
Step Eight – how will you position and promote your product?
What will your product image be – up-market, general purpose, economy, etc.?
Advertising – in which media?
Brochures – are these right for your business?
Questionnaires – helpful to determine customer needs.
Billboards and other signage – where will these be located?
What distribution methods will you use to get your product to market?
Step Nine – what legal requirements must be met before I start?
What will my business structure be – partnership, sole-proprietorship, or company?
What are the advantages/disadvantages of each type?
Are there environmental factors that might affect this business?
What regulations apply to this type of business?
Finally, how do you choose a name for the business? The business name and logo are the first and most critical part of marketing your business, so it is well to give it careful thought before proceeding. Some issues to consider are:
The business name must sell your business;
You must feel good about your business name, you will live with it for a long time;
Your business name is your first impression on the customer;
It should be easy to remember;
The name determines how other people perceive the business;
The business name needs to distinguish your business from others – it must be unique and may not infringe on names already in use by other businesses;
Cute or humorous names do not usually work over the long term;
Avoid using generic and worn-out phrases in the name.
Remember that starting your own business is a big step and an option that needs to be carefully weighed to be sure you are moving in the right direction and starting the right business for you!
About the Author: –
Max Oerder, Pr. Eng., F.S.A.I.E.E., M.I.B.A., has consulted to a variety of businesses in a diverse range of industries. He is experienced in the preparation of business and project plans for Corporate Divisions and Small Businesses.