Starting up a new business is a big decision. Perhaps, you have done it before and have some idea of what is entailed or maybe it is all brand new. Either way, anyone considering the start up of a new business should consider the seven aspects of business. Even if you are not new to the situation, it is a good idea to remind yourself of these factors.
1 - The Market
Your market is key to the success or failure of your business. Whether it is geographic or economic, consider all aspects of your market. Is there an existing market? If so, does it compete with your area of expertise? Will your market produce an adequate profit for you to run your business and live on?
2 - The Management
No matter how small or large the business, there will always have to be someone to manage the operations. If you have partners, consider where the delegated responsibilities will lie. What management model will be used? Do each person's skill set match their set of responsibilities?
3 - Your Clients
This is not the same as identifying your market. Here you will consider how each specific customer will be able to acquire your product or service. Will your target market be drawn in by your offering? How will you meet increased customer demand? How will you handle client services?
4 - Your Money
The first thing to consider is startup capital. If you do not already have the funds, realistically consider how and where you will get the money. How much will you need? Why do you need that much? What do you need it for? What items can be vetoed if you do not acquire enough money, but that will not hinder the start up?
5 - Your Location
Where will you conduct your business? Depending on what the nature of your business is, would it be possible to run it from home? What equipment or supplies will be needed? How will the choices impact your need for financial assistance?
6 - The Legalities
No matter what kind of business you want to start up, there will be some sort of license required. What is entailed in gaining the proper licenses or certifications? How much will it cost? What specialized training will we need? What kind of insurance will you need to properly protect yourself?
7 - The Ownership
What kind of ownership will the business be under? Will you be sole proprietor or will you have partners? If you are going solo will you be able to handle all the aspects of running a business? Have you adequately educated yourself on running a business? Will you need to hire experts for certain activities such as accounting or legal work?
Keep in mind the Big Seven are meant to generate realistic thought about all aspects of starting up and running a business. More gathering of information is necessary before delving in head first. So, the next step is drawing up a formal business plan. There are many online templates for business plans, but we will go over the main components here.
Begin by describing your business. Write your description as if the reader has never heard of you or your product. Detail things like your corporate structure, your product lines, your workforce, your physical location, even your equipment. Next, discuss how you plan to market your product or service. Describe your product, who will buy it and why. If you are replacing and existing market, tell the reader why your idea is better. Discuss how you will respond to increased demand. Operational planning is next. Show how the day to day tasks will take place, where, when and by whom. If you will need a workforce, include your human resource plans here. Finances are next. Give an honest account of your startup capital, how you plan to spend it and how you plan to replace it. Outline your price points and how you determined them. Touch on why you think your market will be willing to pay your price. Next, risk analysis. Consider all the risks involved in running a business, and in running YOUR business. What risks does the market hold? Who is your competition and how will you respond to them? What is your plan of action when a crisis arises?
By now, you should have a solid grasp of all the details of your company. Completing the above five sections of your business plan is a great lead-in to writing your executive summary. Plus, it is probably the most important part of your business plan because it will give the reader a good overview of your proposed business. Do not include any technical language in the summary, or a series of financial figures. Summarize all five sections you have completed and offer a conclusion on the potential success of the business. Some business plans include one, five, seven and nine year projections for their venture. This may be a good idea if your product is particularly new or unusual. It is an especially good idea if you plan to use your business plan as part of a request for financial assistance. Position the executive summary at the front of your business plan, just after the table of contents. Having it easily accessible will be appreciated by your readers.
You have gone over the Big Seven aspects of starting a business, drawn up a solid business plan and still you find yourself seeing a successful business opportunity. Congratulations! You are now on your way to being an entrepreneur.
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