Setting up and running a business is a time consuming task - you need to be dedicated and focused and able to structure your time in order to be successful. The rewards of starting up your own business can be great, but think carefully if you have the attributes and right sort of personality to cope with going it alone.
Do what you love:
You're going to devote a lot of time and energy to starting a business and building it into a successful enterprise, so it's really important that you truly deeply enjoy what you do, whether it be running fishing charters, creating pottery or providing financial advice.
Identify your skills and particularly your weaknesses. Be honest and ask friends and colleagues for input. If you are less hot in certain areas, hire people with complimentary skills or seek professional advice when you need it.
Make sure that there is a market for your product or service. Just as Texaco wouldn't build a petrol station next door to two others, a startup business should ensure that the market for buyers or users is strong in the area he intends to set up in.
Does the business world need you?:
Is there a large enough demand for your product? Ask around before even attempting to start your business-check with similar businesses in the area, or around the country. Find out how they started, and what kinds of clients they target, to get an idea of where you'll fit in the market.
You will need to decide what business structure you will trade under (sole proprietorship, limited company or partnership) and what obligations and responsibilities you will have as the owner of a new business. Read more about these business structures. Get clients or customers first: Don't wait until you've offically started your business to line these up, because your business can't survive without them. Do the networking. Make the contacts. Sell or even give away your products or services. You can't start marketing too soon.
Never underestimate how helpful this stage can be. Even if you never consult the plan again, it is amazing how many thoughts and ideas can evolve if you put all your thoughts down on paper in a structured format. Not only will you require a well thought-out plan when seeking funding or new business partners, but a decent plan will help you focus on your goals and ensure you are less likely to stray from your real priorities. You can read our Business Plan Guides for ideas.
Do the research:
You'll do a lot of research working through a business plan, but that's just a start. You need to become an expert on your industry, products and services, if you're not already. Joining related industry or professional associations before you start your business is a great idea.
Even if you have the best idea in the world, you are unlikely to make a killing instantly. Be conservative with your funding estimates and either save enough money to keep you going while the business goes through its initial stages, or present your bank manager with a well thought out business plan and request sufficient start up funds.
Never underestimate it. Thoroughly research the competitors in your chosen industry. Indentify any weaknesses they may have and try to ensure your product or service is a cut above theirs. Competition is a very healthy thing, but you need to do constant research and never be complacent.
As your business expands, you may well need to hire people to manage certain aspects of your operation. You need to ensure they have the right skills for the job. Above all, you need to be able to "click" with the people you work with - this simply cannot be underestimated.
Create a strong management team:
Your team members should share your vision of the business, and a certain amount of proficiency and credibility. Rely on your connections to find the perfect people for the jobs that will bring their expertise to the business. Remember that you will eventually have to set aside your ego and let them control certain aspects of the company, so your have to feel comfortable around your management team.
You want to be able to set your self apart from all the other businesses similar to yours. Having an eye-catching yet simple to navigate web site and presentation material is key to succeeding in the modern business world. Creating quality marketing tools doesn't have to cost you a fortune either; consider hiring a design art or marketing student from a nearby university to help out. You never know, you could even meet your next Junior Executive.
Seek Professional Advice:
When running your business, a few words with a trusted adviser (accountant, lawyer, business adviser) can make the difference between success and failure. Before hiring a professional, you should visit several to compare and don't necessarily make the decision based purely on price.
Be professional from the get-go:
Everything about you and the way you do business needs to let people know that you are a professional running a serious business. That means getting all the accoutrements such as professional business cards, a business phone and a business email address, and treating people in a professional, courteous manner.
Get the legal and tax issues right the first time:
It's much more difficult and expensive to unsnarl a mess afterwards. Does your business need to be registered? Will you have to charge GST or PST? Will you have to have Workers' Compensation Insurance or deal with payroll taxes? How will the form of business you choose affect your income tax situation? Learn what your legal and tax responsibilities are before you start your business and operate accordingly.
Be honest about your weaknesses:
Identify what you do well and what you do badly, dividing it into areas such as financial, marketing, operational and general management. Be honest with yourself, but also be realistic. Try and get someone else to evaluate your answers - another person's perspective can be very valuable. Identifying your weakness will help you to recognize what you are good at, and which areas you will need to find someone who can do a better job than you.
Biggest causes of failure:
The biggest causes of failure for start ups are - setting your sights too high, not researching your market thoroughly, hiring the wrong staff and not putting enough funds aside for contingency. Keep an eye on these potential pitfuls at all times!