Starting from Scratch - Your New Business Starts Here

Like thousands of people every day, you may be "thinking" about starting a new business. You are fed up with your current job, hate your boss, believe you can do better or simply need some additional cash to develop a better lifestyle.

You may have even been made redundant and with limited employment opportunities may decide that starting your own venture is something you've always wanted to do and now you have the chance.

The trouble is, most people are just doing that - just thinking about it.

For the people who succeed in life they actually make these life changing decisions a reality by doing something about it. In this article I'll show you some steps you can take to turn your thoughts into reality.

How to Plan your Venture from the Beginning

To be honest, an idea is only an idea until you have some proof down on paper. And the best thing to do is to prepare a financial forecast. And it should be realistic rather than you will take away market share from existing businesses.

If you've ever seen Dragon's Den on BBC2 then the types of questions ask are pertinent here. How much is your selling price, what is your margin and how many do you need to sell. Even if you have those numbers it's important to also reduce costs as far as possible and understand your target customers intimately to maximise returns.

From your forecast numbers, done correctly will show you 2 incredible statistics:

• How many items you need to sell to reach the profit figures you have in your mind
• What your costs are, both at a unit basis as well as fixed costs.

And after all that, your profits.

Now this may seem obvious, but sometimes when I calculate how many items I need to sell to achieve a certain goal I am stunned. It's usually so much more than I have in my head!.

Now preparing finances can be hard for most people. Luckily for me I trained as an accountant so find it straight forward, but if there's one tip for you, it's to a prepare business plan for your idea (click on that link for business plans that include a financial planning wizard !)

There are of course many other issues to contend with; the biggest one is about sales and marketing, but generally, most people have a hunch about their business or have seen a big gap in the market for their ideas.

Receiving Feedback on Your Ideas and Plan

The biggest advice I have for you is to show your ideas and plans to people you can trust and get their feedback.

People need to pull your plan apart and in all the years I have spent in the corporate world, a team far outperforms an individual. This is because everyone approaches a challenge in different ways so you will see the issues from different perspectives.

It also allows you to view your ideas in the "cold light of day". Enthusiasm sometimes outweighs reality. On that first day of business when you have no customers coming through the door you may remember one of your friends saying "well, does anyone really want to buy your widgets ?"

So put your plan in front of many trusted people and listen to what they have to say. And have good answers to their questions that you can justify.

This will also be useful if you need to approach a bank for any type of loan because being approved for a small business loan these days can be hard. Bank managers know the risks they want to take on and will have many questions that your colleagues will also probably ask you.

Try not to be put off at this stage and take things personally. Sometimes people are right but they may not also see your ideas in vision.

Put the Hard Work in for High Rewards

Running any business is going to be hard work. The businesses I run take 10-12 hours a day and that includes most weekends (much to my wife's annoyance) but most times to be successful you really do need to put the hard work in.

In fact, in your first year of business you may not make any money at all, so be prepared for this as well. Most of the money you earn as profit should be re-invested into your business for the future. It will also be spent on getting your business off and running.

The most successful people have started small and grown big. So don't think you are going to be the biggest within 12 months. It will take time but all that effort will be rewarded.

If you don't know something (like marketing or financing) then get expert help or outsource it to someone who has been recommended to you. You can't do it all but you should be the entrepreneur that's in charge of your business. If things go wrong your plan will help but you will need clear strategy and direction for a long term successful business.

Ready to Begin ?

As I mentioned at the beginning of this short guide you should start to plan your ideas. Please make sure you put a plan together. If you don't use the resources on this site then at least put together a simple Excel spreadsheet of your income and expenses for the next 3 years. This will likely highlight all the challenges you may face and be able to change your strategy before you start investment and mitigate pitfalls along the way.