The two key ingredients of a successful business are a reasonable
business idea and a thorough business plan, which will put the meat on
the bones and turn your idea into something concrete and viable.
A wonderful idea is a great start for anyone wanting to start up a
company, but it’s just the bare bones and needs to be fleshed out with
a detailed and thorough business plan before you start the ball in
motion to get the business off the ground. For a start, you’ll need a business plan to make
your sales pitch to potential lenders and investors, but you’ll also need it
to help you examine the idea in more detail to ascertain whether it
will be viable. You need to understand the market and whether people
will want to use your service or buy your product. This means doing
some market research.
Here are some helpful pointers to assist in your analysis:
Your product or service should have a unique quality that makes it
stand out above others.
It has to be something that people want – i.e. there needs to be
a demand for it.
Your product or service is most likely to be successful if it plugs a
gap in the existing market or if it is vastly better than anything else
currently on the market.
Build a profile of your potential customers. Understand who they are
and what their needs are.
Think about how you will promote your business and establish and
maintain a customer base.
Investigate your potential competitors. Think about their product or
service, how it is marketed, what its unique selling points are, how
they run their business.
Compare your business to those of your competitors. Consider how you
can make yours better or how you can set it apart from the others.
Do some research into the industry. Look at previous history and
development, and any significant success stories or failures.
Find out whether there are any laws or restrictions governing the field
in which you want to operate and examine how they could affect your
business.
Often you can gain a better understanding of something by consulting
other people. As the old saying goes, two minds are better than one.
Focus groups and brainstorming sessions are frequently used by market
research agencies and marketing departments of large companies. It can
help to gain several different viewpoints and other people may come up
with ideas or problems that you would never think of. Hold group
sessions, ask people you know for their opinion, or, if you can afford
it, contact a market research agency to help you out.
You’ll also find a great deal of useful information on the web.
Companies often have reports and news items on their websites, and
sometimes a company history section which can also be useful. News
websites are also a good source of information, where you can search the database of old news items.
This analysis will help you to understand the purpose and direction you
want for your company. One of the most important elements in a
successful business is having a very clear understanding of the
company’s vision, i.e. its ultimate objective. Your customers will only
understand your business if you do.
As well as establishing whether your company makes good business sense,
you’ll also need to ensure that your product or service actually works.
A prototype will therefore need to be made and it will need to be
tested. This will inevitably cost money. There’s a guide to finding
finance for your business in a later article in this series.
Of course, you don’t need to have a fantastically creative idea to set
up a company. In fact sometimes it can be much more difficult to
establish a company that’s based on a new concept, as there is no
previous experience to go by. So setting up in well known territory can
provide a great deal more reassurance. However, your company won’t
succeed just by being the same as everything that’s gone before it –
you still need to find a unique angle to assert the identity of your
company and make it better than the rest. Does your product or service
have better features or facilities? Is it manufactured to a higher
standard? Does it last longer? Is it more reliable? Are you quicker at
delivering? Do you provide more flexibility? Don’t rely on price alone for your business model.
People don’t always make choices based on what’s cheapest – perceived
value for money is usually more important.
If you prefer the security of starting up in an established field, you
might want to take this one step further and set up a franchise
business or take over a company that’s already up and running. This can
provide you with more security and peace of mind, although it does have
its pitfalls. In a franchise business
, you will be bound by the rules
and regulations of the parent company and may not have complete
control. You also may not have as great a capacity for making profit.
If you’re thinking of buying out a company, you’ll need to do your
homework to ensure that it’s a secure proposition. Find out how the
business works, who its customers are, why it’s being sold and its
history.
