What will your logo be? Will you have a company twitter account? Which celebrity will you approach to endorse your product?

It's nice to daydream about peripheral issues but you should not start a business unless you are prepared to have no social life and possibly no wage for a few years.

Still interested?

Joanne Hession, author of Don't Get a Job, Build a Business and founder of QED Training, tells Down to Business presenter Bobby Kerr what to consider before starting your own business, in our AIB Getting Started Series.

What Joanne says:

Starting a business – the top tips

 

Step 1: Are you suited?

First off, ask yourself if you’re personally suited to being in business for yourself. Although it might sound glamorous to be the boss, setting up in business (especially in the first few years) is hard work, requiring a lot of guts and often borrowed money. 

People get the entrepreneurial bug in lots of ways but, however you caught it, ensure that you’re suited to being self-employed and (potentially) to being an employer.  Take time to ask yourself these questions:

• Why am I going into business?
• What am I trying to achieve?
• What’s the dream?
• Do I have self-belief, confidence and passion in my idea?  
• Do I  have drive, energy, motivation and commitment?
• Can I tolerate uncertainty and risk?
• Do I know what areas of business/management I’m not good at?
• Do I have a business idea? Is it any good? Do I really know?

Be clear about your goals. Write down the personal and business goals that, by going into business for yourself, you will be able to achieve.  For instance, if your personal goals involve a lot of travel, free time, or greater flexibility in your working week, then you must build a business that can sustain your goals financially while ensuring that the business does not depend on you being there every day of every week.

Step 2: Your business idea

New businesses work in two main ways: putting an original idea into practice, or developing an existing one. A large proportion of entrepreneurs don’t create new ideas themselves, but simply see an opportunity by altering, improving or expanding an idea.  Business ideas can be found all around us, through travel, watching trends, or simply keeping your eyes and ears open. Where people are complaining about something, whether an inadequate product or a lack of a good service, then there is always an opportunity to fill that gap.  Just because you have an idea, it doesn’t necessarily follow that you have a successful business. You need to assess if your idea is any good. 

So what makes a good idea?  One that has DEMAND and PROFIT.  How do you find out?…..the next step is RESEARCH.

Step 3: Researching your idea

This is the piece of work that most start-ups don’t do enough of.  They spend time thinking about logos, business names, will they work from home or not, will they set up as sole trader or company (and what’s the difference), what funding will I get/need, what will their websiite/facebook page look like, do they need premises  etc etc instead of focusing on:

• Is there a NEED/DEMAND/DESIRE

So does a viable market exist for your idea? When researching your market, it’s all about finding out who needs/demands/desires what I have to offer or what need/desire am I going to satisfy by creating a certain product/service? Never contemplate setting up a simple bandwagon-jumping business. Invest time twisting your business idea so that it meets a need and ultimately more desirable to your target market. 

Quality market research will help you decide how you should best position your product or service, where your business should be located, how you should market it and what staff or skills will be required to run your business.  Although it’s tempting to take the cheap option of using friends and family as market research guinea pigs, don’t fall into this ‘expedient trap’. They will be biased in their responses and may not be able to relate to your target market.   

Step 4: Run The Numbers

Once you’ve got an idea of the number of customers you might have, its time to start running the numbers.  This can be done really early on as it helps you to see what businesseswill be viable and what won’t, even before the research has been done.  Make the numbers your best friend and constantly “run them” to see how much you need to sell at different price points and the likely profits you will make.  The numbers give you huge knowledge about your business and together with good market research they help you make the right decisions in the start up phase.

Step 5: Keep setting yourself “Gates” – Fail Fast!

If your business idea is going to fail it is best to fail fast!  Ideas can fail at many stages so keep setting yourself “Gates” that you must get through in order to keep going with the business idea and keep yourself focussed.  If you can, get yourself on a programme (training or incubator) with gates where they don’t let you progress through the programme until you pass through each gate. 

Step 6: Planning for success

It’s easy to start a business (€20 to register a business name electronically with www.cro.ie) but more difficult to keep it going and make a success of it. Drawing up a good business plan will force you to consider all of the aspects of your idea, from cash flow to your management team, especially the areas you’re not naturally interested in or good at. A business plan must be written down, forecasting where your business is going in the next few years and how it is going to get there. 

The business plan will be a necessary document to support your business – particularly for accessing finance. Before it even gets to that stage, it’s crucial to write it yourself, as it will help you assess how viable the business you’re embarking on is. The business plan should be revisited often to compare what’s actually happening with what you had targeted, ensuring that you’re keeping on track or amending your plans as necessary while your business gets off the ground. 

 

Step 7: Attend a Start Your Own Business Course and/or Other Free Networking events

Consider attending a Start Your Own Business Course.  This will address all of the areas of setting up a new business as well as giving you the opportunity to meet with other budding entrepreneurs to share adrenalin, ideas and contacts. These courses not only provide you with all of the practical information, but often challenge your ideas and force you to think about creating the best business model that you can.

Some organisations offer Start Your Own Business programmes for specific sectors, such as setting up a retail business (2 day programme Carlow CEB April 2014).

There are lots of programmes and networking events out there…….

Step 8: Think Big

A common trap is a business model that creates either a hobby business or merely a job. Typically in the hobby business, the owner is working more hours for less money than they would get on the open market. In the second instance, a job is created which simply pays the owner the same money that they would get on the open market, but which comes with added stress and risk and no real freedom. 

Businesses need money to survive and also to take advantage of new opportunities that present themselves. They also need money to buy you free time for work ‘on’ rather than ‘in’ your business – a key component of success. If you don’t plan for the business to make money, you’ll never be able to buy the resources that your business needs to grow and to buy yourself the room to make choices.

 

Step 9: Think About Your Exit Strategy

It’s perhaps an odd consideration at the initial stages, but you should think about the ‘endgame’. Do you want to build an asset that you can eventually sell off for a tidy sum?  Do you want to start a business that increases in value and runs independently of you, or one that you can franchise in Ireland and abroad? Do you want to create a job for yourself that churns off cash and after retirement gives you a healthy pension to sustain the life you are used to? 

A Sample of Other Topics to discuss:

• Working From Home
• Financing Your Start-Up – how much money will I need and where can I get it
• Getting to your Customers
• Building an Online Business
• Using Social media for your start up
• Getting Help – what is out there (information/education, facilities, support, finances)
• Keep an Eye on Your Costs and Manage Your Cash – The Financials
• Legal issues that are important for start-ups
• Networking to drive sales
• And many many more…….!

See also talk on “Dublin, the best city in the world to start a business” on http://qedtraining.ie/dublin-the-best-city-in-the-world-to-start-a-business/

Joanne Hession

Joanne Hession is a successful entrepreneur and recognised leader in training, mentoring and business in Ireland. Joanne is responsible for training thousands of budding entrepreneurs through her business QED Training (www.QEDtraining.ie) and works internationally in the Business School sector through QED Accreditation Advisors (www.QEDaccreditationadvisors.com). She is passionate about business and providing new businesses with best in class training on how to do business better, smarter and more successfully and she is co-author of #1 best selling book “Don’t Get A Job, Build A Business”. She can be contacted at joanne@qedtraining.ie.