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Starting a business

Starting your own business will be one of the most exciting and challenging things you will ever do. To be successful, you’ll need to be well prepared for what lies ahead. Careful planning will help you turn a great idea into a profitable reality.

Is running a business for you?

Whatever your starting point, there are some basic questions you need to ask yourself about your business idea, your personal aims, your skills and your know-how.

Running a business is challenging and time-consuming, so it’s worth thinking about whether this labour of love would suit your personality and lifestyle. Having your own business and seeing the direct impact (and hopefully benefit!) of every decision you make can be incredibly rewarding. But being your own boss means that the buck stops with you, which can make it harder to switch off at 5pm or weekends. It’s a good idea to speak to people who have been there and done it; ask them their reasons for being self-employed, what they hoped to gain, whether it has been all they expected and what their plans are for the future. There is no better way to judge whether self-employment is right for you than to seek advice directly from those already doing it. Be brave too. Ask local business owners about the highs and lows of running their own business. The better prepared you are to visualise yourself coping with challenges – as well as with successes – the more easily you will be able to answer the question: is running a business right for me?

Top tip

Think about your reasons for wanting to run your own business and ask local business owners if this is really what you can expect.

‘Building a business starts with you’

Entrepreneur’s checklist

There is no one type of person who is good at running a business but there are some characteristics that successful small business owners have in common. Andrew Dixon, the founder of ARC InterCapital, and Claire Locke, the founder of clothes brand Artigiano, suggest these are some of the most important traits:

Don’t worry if you haven’t got all of these characteristics – it doesn’t mean your business won’t be a success. The key is to recognise the skills you have, the skills you need and how you are going to start filling in the gaps.

What do you want to achieve?

Not all people will start a business because they want the power and wealth of Bill Gates. While some will be driven by money, others want to be their own boss to enjoy more creative freedom or the opportunity to improve the community around them. The reason that you go into business will affect the type of company that you become, so it is important to think of this at the start.

What’s the big idea?

Building a business starts with you and your personality, your skills and your ideas. These three things are not set in stone; you will develop and change, as will your skills and ideas, and you will have plenty of opportunity to review each as time goes on. But it is important that you are clear about where you stand on all three before you start planning.

Are you clear about what your business will do? This may seem obvious but many people, brimming with ideas, overlook the importance of this question. Your business will need to stand out from the crowd if it is going to be noticed by customers. And that can be hard when, more likely than not, your customers will already be able to buy whatever you are offering elsewhere. There are very few genuinely new offerings. But don’t panic, because you can still be a successful business without a unique product or service.

Top tip

Think about everything you would like your business to be, e.g. innovative, customer-focused, creative.

Think about all of the skills, strengths and knowledge you will bring to your business.

Do both sides match?

Do you need to develop different skills?

You need to create a Unique Selling Point (USP), a reason why customers should buy from you rather than anyone else out there. To develop your USP, look at what you do and how you do it. It’s often how a business does what it does that sets it apart.

Do you offer free delivery, or is there something special about your customer service, for example? Consider your customers – is there something special about them? For example, are they based all over the world; do they have values in common? What benefits do customers get from your business: price; good quality service; or perhaps your personality? Above all, make sure that you put yourself in your customers’ shoes and check that your idea is something that they will actually want, rather than a dream or product that you have fallen in love with.

Try to be as specific as possible about the kind of business you want to run. If you want to run a café/restaurant, will it just be open in the daytime or are you prepared to work evenings? Will it be traditional or innovative? It’s one thing to know that you want to start a clothing label for example, but you need to be certain about what type of clothing label, attracting which sector of the market? What will be your input? What sort of customers are you expecting to have?

Decisions that you make about what your business is and isn’t will affect every aspect of your venture – from your choice of premises and location, to the amount you will need to spend on fixtures and fittings.

‘Your decisions about what your business is and isn’t will affect every aspect of your venture’

Your business values

Now that you have your business idea and you have thought about what it is you are hoping to achieve, it’s good to take a step back and think about the type of business you hope to run. The reason you are setting up your business and the type of business you hope to become will form a core part of your business – your business values. These values will probably be instinctive to you, and you will probably already have thought about them in trying to work out your USP.

For example, if your aim is to exceed a customer’s expectations every time, and to provide outstanding customer service, that is an important business value, but it will also distinguish you from the competition and help you find your niche in the market.

Top tip

It is sometimes useful to capture your vision for your business. Collect images, words and items that capture the look and feel of your business and keep refreshing it as your business develops.

What other values might you have – treating staff and customers with respect? Working to a consistently high standard on every job? While these things may be instinctive to you, it is worthwhile writing them down. Not only will this make it clearer to both you and your business partner or first employees, it will help a customer understand what they can expect of you. That will be the making of your brand (for more on brands and brand identity, see Chapter Two).

The second part of the exercise is to think about why you are in business. Is it important to you who might benefit from your company’s success, or whether what you do will make a difference? If you do something of which you can be proud, and that benefits the community in which you work, there will also be benefits for you and your business. For starters, it will be easier to build up a strong reputation. It will also help you keep your focus and not get easily sidetracked. If you are clear on why you are in business, it will help you to...