Friday, 6 May 2016

Thoughts on starting a business

Lots of people start business, for all sorts of reasons - they have a great idea, they have a particular talent for something, they get made redundant, they get fed up of being an employee. These are all good reasons, but what does it take to stay the course and build a business that gives you a regular income and is maybe something you could sell one day for a pot of money?

Although having a great idea or a particular talent or fancying a change may be reasons to start a business, none of these will guarantee success in themselves. It's often not the person with the great idea who runs a successful business, it's the one who implements the idea well. You can be a brilliant painter or architect or plumber but is you are rubbish with money or no one knows how good you are, the business will not fly.

Breaking it down into its essential components to run a successful business you need the following:

To provide a product or a service that people need or want
To let people know about it and sell it
To agree your prices up front
To collect money and get paid
To make a profit, ie get more income in than you spend

If any of these components are missing or not done properly the business will struggle and probably fail.

So how does a one person start up business manage all these different activities? Well if they are serious about wanting to succeed, they do all of the above themselves or they find someone who can do it for them for an affordable price.

The most common gaps I see are people who are lousy at finance and don't pay enough attention to it and people who don't do enough marketing and don't devote enough time to selling their product or service. Inevitably theses businesses will eventually fail. If financial management is poor, the end often comes quickly, with a surprise tax bill or similar occurrence. With poor marketing, the demise may take a bit longer but eventually the business stagnates and withers.

The early years for a start up can be a hard slog with uncertainty about income, long hours and not much time for relaxation or to spend with family. Get through this though and the rewards and satisfaction of being your own boss can be substantial. I hope these tips help start you on your way with your eyes open.