Wednesday, 25 March 2009

So you want to start a business... Part 1

Anyone out the looking to start a business? If you answered "yes me" then it means someone out there is reading these words, for which I am truly thankful. It also means that you are like thousands of others each year.

In a resession the number of new businesses being created actually increases as people try to find work by creating their own job. The sad fact is most of these businesses will fail within two years. With my blog over the next few days I will look at what you (and your accountant) can do to help prevent this.

Blog 1 The Idea

You would think that everyone would start at this point. In fact normally people have a fuzzy idea of what they intend to do. These range from the fairly well formed "I want to open a shop that sells X" to "I think I can run a shop".

Focus the idea as far as possible. What do you know enough about to make a career? If it is a new product is it something people will actually use? Are you making something for others to sell to the public? What outlets will you sell through.

Anyone who has ever watched Dragons Den will of seen how many people get a long way down the road to market without ever really having thought about their market. Do not be afraid to talk to other people. Be careful about talking anyone too close to you. Mum's for example are well known for thinking anything you do will be great. Try to talk to people outside your normal circle.

It is often a concern that by talking about an idea you are open to someone stealing it. There are ways round this. Talk to an accountant. Some Market Research companies run small focus groups that ask about a number of ideas and provide feedback. One question in these groups can be a good investment.

Finding out than an idea is a non-starter at this stage is much less expensive than starting that fails in the first six months. Once you have an idea that you know can work the next thing to find out if it can make money. You are now ready to put together The business plan

To be continued....

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