Advice for new and start-up businesses
No two businesses are the same and there are no sure fire rules or blueprints for creating a successful business.
Otherwise, there would be no challenge, would there?.
There are however some common themes which emerge from experience and common sense.
The Business Plan
It makes good sense to have a business plan.
It may occupy no more than 1 side of A4 paper, or may not be written down at all. However, if you are not able to explain succinctly what your business is about and how you plan to get there, how can you possibly expect anyone else to understand or help you.
The marketing plan
Sales will not just happen. They never do. Where do you think your sales are going to come from? Why? How much are you going to sell? How will your markets find out about you? The marketing plan defines the markets you are aiming at and what actions you are going to take to woo them.
Costing and margins
Many people start out believing that they can win business simply by undercutting the market and match a present product offering more cheaply.
Later on, they may find themselves appalled at the length of their working day and the slim returns to show for it. Make no mistake, the public will have benefited from the episode, and the new entrant may in turn find his hard won business stripped away from him by yet another who is prepared to bid the market down even further.
Capital is a resource, like staff, production capacity or admin competence. Work out how much of it you need and then think carefully about where you are going to get it from. Businesses fail more within their first 2 years because of lack of capital than for any other reason.
This is a subject in its own right. Having a business partner is like a marriage. There are pluses and minuses and the partnership works as long as the pluses outweigh the minuses. Breaking up is so hard to do though, so be aware.
Yes, you need good advisers. You do not need to learn everything about everything. You just need to have people around who you can ask when you need to know a thing and whom you trust to give you a right answer without having an ulterior motive or agenda which conflicts with your own. Such things as, where do I go to find a good bank; what happens if I employ someone; what about legal advice for contracts and so forth; what about renting premises. And stacks more, too.
Supposing it all goes right. One of the greatest challenges is managing growth. It is a truism that in business, there are always problems. The difference is between those that are nice to have, like too much work, big tax bills because of big profits, and those that are nasty to have, like poor quality control, running out of money. When things are going well, there are always plenty of people around to come up with helpful suggestions about how to spend your money. When they are going badly, that is when you discover who the real allies of your business are, and that is when deep, long-lasting business relationships are formed.