What It Takes to Start a Small Business

It comes as no surprise that thousands of businesses, large and small, have gone bust during the current downtrend in the economy. Literally millions of workers have been made redundant, leaving them on their own to carry on. Some have tried their hand at contracting whilst others put their expertise to work at launching small business enterprises. Those enterprises that survived understood what it takes to start a small business in a bear market. Against all odds, many of these small businesses are flourishing concerns today because they took the time to get the facts straight before launching their company.

So You Have a Vision – Is That Enough?

Some entrepreneurs have a grand vision and launch full speed ahead to make that dream a reality. Unfortunately, dreams go both ways as there are nightmares as well. Without a proper roadmap to reach your ‘vision,’ things can turn sour quite quickly. Not only should you have a business model in place, it is imperative to consider financing. Do you have the funds available to launch your business? If not, what type of financing would you qualify for? There are government grants available to certain industries which would often be money that would not need to be repaid in full, if at all. Your vision will certainly take financial backing to evolve, so don’t forget to include this in your plan.

One Step Never to Omit – Careful Market Analysis

It doesn’t matter how wonderful your product or service may be, if there is no demand, why create a supply? Only after careful market analysis should you even consider building a road to your vision. Take a good long look at which companies in your market have gone bust and what it was that led to their demise. Whilst it is true that poor management could have been a contributing factor, it is also likely that those enterprises were offering a product that has become obsolete. Would you even consider designing and manufacturing a typewriter in today’s high-tech world of voice recognition capable word processors? Probably not! If there is no call for what you have to offer, go back to the drawing board. It’s as simple as that.

Roadmap to Success – An Intriguing Business Plan

Unless you are financially independent and have the wherewithal to fund your own enterprise, you will need funding and/or financing. This step towards a successful small business is vital. You will be presenting your vision to a number of financiers, investors or lenders so make it a sound business model. Take time to develop a strategy that can sell your company before it is born. Whether money is being lent to you or you are offering stakes in the company, no one wants to back a loser. Professional help is available but many entrepreneurs benefit from tools such as the Business Model Canvas which enables them to graphically chart out their model, making it attractive to financiers.

Accounting and Record Keeping  

Many newly formed companies feel that hiring an accountant or bookkeeping service would not be worth the expense in the beginning. Unfortunately, this can be a grave error in judgement. Oftentimes new business owners or directors miss vital reporting dates or fail to keep record of expenses or debts which can greatly impact corporate or sales taxes. The reality is that an incomplete report is just as deadly to your business as a nonexistent report. It is far wiser to utilise a professional bookkeeper or accountant than it is to try to save a few pounds. A tiny error can be extremely costly and that is something which has set many companies on the path to financial ruin.

As more and more big companies go under or send their facilities overseas, the rising role of entrepreneurs is becoming increasingly important. Government recognises that SMEs play a huge role in stabilising the economy which should indicate just how important it is to get off to the right start. Develop a good business model for your product/service, research the market thoroughly, sell the idea to the right financial backers and keep accurate records for the taxman. If you follow this advice, you could have a lucrative endeavour that is built on a solid foundation. Too many entrepreneurs join the ranks of ‘here today – gone tomorrow’ so take the time to do it right and you will have a business that can withstand even the test of time.

Adam writes Articles and News for Real Business Rescue and covers all matters relating to company directors facing business distress.  He has covered many articles relating to corporate insolvency and advice and tips about business related cash flow.