There’s never a bad time to start a business even when times are tough and markets appear saturated. Business is a jungle and it will always come down to survival of the fittest.
The greatest threat to starting a business is that you are not going to make a go of it and statistics indicate that more than 50 % of new businesses fail in the first three years. According to a recent business analysis there are six things that are crucial to the success of both the start-ups and the continued success of any business. These are:
- The Idea
- The Team
- The Business Plan
- Financial Capital
- Your Business System
- Timing
THE IDEA:
All businesses are based on an idea or concept, which eventually becomes The Vision. The vision is normally made up of three parts:
- The basic idea – “The What”
- Why will people want or need your idea – “The Why”
- How will people benefit from your idea and how will you communicate your idea to your target market – “The How”
From this you can produce the physical aspects of your new business – location, decor, fixtures and fittings etc., target market, product offering and pricing structure.
THE TEAM:
To be successful you need to have the right team working with you. This is often a challenge in both recruitment (attracting people to apply for the job) and selection (picking the right people to join your team). Very often the team you open up with is completely different from the team with you a year later. This is not unusual however, if one spends more time selecting the right person, both in mental attitude as well as work skills, this turnover of staff could be greatly reduced.
THE BUSINESS PLAN:
The Business Plan is basically a checklist and a route map to which, from time to time, you refer to see if you are still working ‘The Plan’.
A Business Plan typically shows an understanding and personal experience of the market you are entering. It will also contain a financial calculation of:
- Start-up costs (rent including deposit, furniture and equipment, signage plus your opening stock and sundries.
- A Staff and Sales plan, which is a projection of how much turnover, you want to do and how many staff you will need to do that turnover. This can be quite tricky and there are scenarios to consider.
2.1. How much turnover do I need to create to cover costs, and then to make a profit. This will tell you how many staff you will need.
2.2. If you know how many staff you are going to open up with you will have an idea of how much turnover you could generate.
- A marketing and promotional plan of action. This includes start up promotions, promotional events going forward, staff training, new developments and innovations in your particular industry.
FINANCIAL CAPITAL:
It goes without saying the new businesses require start-up capital. If you are fortunate enough to have saved the cost of furniture, fixtures, fittings and stock, you still need working capital for the first two or three months of trading to be able to pay your running costs while you are building turnover.
YOUR BUSINESS SYSTEM:
Yes, even a small business needs to use a reliable business system. After all you don’t plan to remain a small business forever! The ideal system is one with a strong focus on building a client base, allowing you to attract and retain new clients as well as develop an on-going relationship with them. This type of system is referred to as CRM (Client Relationship Management). In addition you will need a diary to manage your time, inventory to manage your stock and consumables, invoicing to record and monitor turnover and an income statement to track and monitor your costs. That’s all.
TIMING:
New ideas and products often fail because they are either ahead of their time or because they are late entries and the market has already been saturated. Timing often determines how much time it will take to establish a successful and sustainable business.
It is interesting that, according to the experts, the above six points rate, in order of importance to the success of a new business, almost 50% is attributed to timing with the second highest being your choice of business system.
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When it comes to Business: Start Right, Stay Right
Here’s to your NEW business
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