Although it is obvious, make sure you have an idea of what your business is going to be about and how it is going to be profitable; create a mission statement summarizing the core value and aims of the business; What does your business do? What sets you apart from your competitors? How do you want your business to be perceived as a brand? These are some of the few questions you should consider when developing your mission statement. Your business’s mission will also be helpful for when you start researching the market and the industry the business will be based in.
Once you have your business idea, do a market analysis. It is a key step that helps you recognise important information, such as current market trends and the most relevant target audience for your business. This will help shape your business. Do you need storage space? Will you have your website or a social media page or both? Do you need manufacturers? It may seem to be an exhaustive process as there is an endless list of information required to kick start your business. An easy way to explore your business idea is by carrying out a simple SWOT analysis.
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SWOT analysis is short for Strengths, Weaknesses, Opportunities and Threats. It can be used to analyze the business idea/model from both an internal (Strengths and Weaknesses) and external (Opportunities and Threats) perspective. It helps identify what your strong points are, consider what you may be missing and highlight any potential risks as well as market gaps that can impact the business. It will also help you identify what sets your business apart from others in the industry.
No matter how innovative and promising your business idea seems, if you are not aware of the industry and the current market, you are limiting the extent to which your business can grow. A market analysis serves as a ‘one-stop task’ that helps you cover all your bases to consider when setting up a business.
Tip: Websites such as Statista and IbisWorld help provide a basic understanding of the current movement of your chosen industry. However, in order to ensure that your research is accurate, carry out a survey using tools such as SurveyMonkey or Google Forms to know what your future customers are expecting from your business. Using the reports as well as the responses from your surveys, you can create 5 or 7 points for each facet of the SWOT analysis.
How you will finance your business is a very important next step in setting up your business. How much capital or ‘funds’ do you need for your business to get started? You can do this quite easily by making a list of all possible expenditures required to start the business such as purchasing raw materials, registration/license fees, website costs just to name a few. To further organize the finances of your business, you should get a bank account that is exclusive to the business. This will allow you to keep track of the business costs in a much more organized manner.
It is important that you are aware of the laws and regulations around setting up a business in your country. For example, are you allowed to register your business to your home address? What is the tax structure? Do you have VAT? To be able to research the laws that apply to your business in particular you will need to identify the legal structure of your business. The 4 most common legal structures are:
Once you feel confident that you have developed a thorough plan, the next step is to get feedback. Do a ‘practice pitch’ to your family or friends to get some constructive feedback regarding your business idea. To make sure you make the most of the feedback consider reaching out to individuals who are in your target group or have experience/knowledge in the industry. This will help you get a fresh perspective about your business, highlighting strengths and weaknesses you may not have considered. This is some of the most valuable information and do not disregard the feedback if they are not positive. Keep in mind that these individuals can become your customers in the future and customer feedback is key to running a successful business.
Once you have all the information you need, compile them together to create a cohesive business plan. This will help you understand how your initial business idea will potentially evolve throughout the lifecycle of your business. It will help you tackle the inevitable unknowns you will face when running your business and will help uncover your true potential. Afterall, a little thrill makes your journey of setting up a business all the more adventurous.