So, you want to start a business? But wait, what do you do first?
Pick a name? Buy a URL for your website? Incorporate a company at Companies House? Write a business plan? All of the above?
Stop. Before you do any of that, first, answer three questions. The first thing you must do is answer a simple question: Why? Why do you want to start a company?
The answer to your question will determine in large part how you start and go on to develop your business. Perhaps you’re looking to turn a hobby into a side hussle or are looking for new purpose now the kids have flown the nest. Maybe it’s a long held dream to be your own boss, or you’ve had a Eureka moment that has convinced you that you're the next Richard Branson. It might be that you’re bored with your current routine or it could be as simple as just something to tick off the bucket list - ‘it’ll be a laugh’. The important thing is that there are no wrong answers, as long as they are honest.
The next question is, What do you want to do?
Not just what is your business going to do, i.e. the products and services it will offer (important as that is), but what do YOU want to do? For example, if your business is based on your hobby, how far will your enjoyment extend beyond the core of that hobby? Just because you love making jewellery (and are very good at it), doesn’t mean you’ll enjoy marketing and selling it (or be any good at that). If there are things you definitely DON’T want to do (such as sales or marketing on social media), then that will lead your business down a different path.
The last question is, what are you prepared to lose?
There is no such thing as a dead cert in life and this applies equally to businesses. If your business is going to require any sort of investment, whether it’s for capital assets (e.g. office equipment, tools & machinery), for stock / inventory, or for other working capital (rent, wages, utilities etc), then it’s all at risk, no matter how confident you feel. Just like going to a casino or a day at the races, don’t ‘bet’ more than you’re prepared (& can afford) to lose.
Once you know your ‘why’, your ‘what’ and your appetite for risk, you’re ready to start.
Start where though?
In coming editions of this blog we will present different persona's that have common characteristics based on the answers to the three questions above - the enthusiastic hobbyist, the reluctant entrepreneur, the gung-ho empire builder, and more. For each we'll discuss the strategies that they are most likely to use in building their businesses which match their why, what and attitude to risk.
Colin Hall, is Founder of bizplansuk a business planning consultancy, specialising in helping small and medium businesses plan for growth
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