Starting a business is a great way to create additional sources of income. There are many different businesses that you can start, this can range from monetising a hobby or skill, buying and selling products or providing a service to solve a problem that is in demand. It is important to start your business with the right framework as this will help you to achieve your goals whilst growing the business and running it efficiently. In this blog, I will be writing about important points to consider when starting a business.
- Clarify your business idea
Clarifying your business idea means looking at the idea and seeing if you can develop it to achieve the goals you have. For example, if the goal is to generate more income, you would need to clarify if this is possible with the idea you have and how you will be able to do this. When you initially start the process, it is good to think outside the box and be innovative. As the process moves forward, some of the questions you will ask are, what problem are you solving? How will customers benefit from your idea? What makes your idea different to the others already on the market? Can you turn the idea into a business and make it a success?
2. Research and test your idea
When you have clarified your idea and have an understanding of the direction you want to take, it is important to carry out comprehensive research and test your idea. Research helps you to build on your idea and to understand the facts. You need to know what is involved in turning the idea into a product or service that people can buy if there is demand for it and what you will need in order to start. If there are other businesses selling the same product or services, you can start by looking at their website to see how they do. Look at customer reviews to understand what people think. Use search engines online to gather more information and if possible, speak to knowledgeable people. Testing your idea lets you know if it is viable. You can test your idea by speaking to family and friends and seeing what they think, using social media polling tools or carrying out surveys.
3. Have a business plan in place
A business plan is important for your business because it will become your business’s blueprint or road map. It will also communicate your idea to other people if you need additional funding. A business plan helps you to really structure the research you would have carried out, in a way that will help you to formulate an action plan and put in place milestones. It will help you to understand the strengths and weaknesses of your business and what you can expect. Many ideas do not usually go past this point, but there are many resources available to help you with writing the plan. These include ready-made templates or an accountant.
4. Understand the business’s finances
An integral part of being able to start and run a successful business is being able to understand the business’s finances. It is important to have a budget in place to understand how much will be needed to start the business, the cost of running the business and how much profit you will make. You can start to prepare your budget by researching how much supplies will cost; how much it will cost to make the product and deliver it to the customer. Other aspects to also consider are how much it will cost to market the product, manage inventory etc. Once you know this information, you can decide on pricing and calculate how much profit or loss will be made. This will give you a general idea of what to expect and at this stage, it will give you the opportunity to test out different scenarios for example, how discounts will affect your profits, how many products you need to sell, and how much you will make at different price points.
5. It will be challenging, understand your why
When you decide to start a business, there will be challenging times. You will have to resolve problems that you encounter. Sometimes it may feel like you are not making any progress even though you are really working hard towards the business. Before you start, it is important to understand why you are starting, what you want to achieve and how you will achieve this. Knowing this and writing it down can become a reference point and bring some motivation in challenging times.
Turning an idea into a business can be daunting, check out the Business Start-up toolkit to help guide you towards putting your idea into a plan.
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