Before You Implement a New Small Business Idea

Introduction - many small businesses fail within the first year because their owners either don't have the necessary skills and motivations, or their fundamental small business idea is flawed. Business success or failure depends as much about individual as it does about the business concept and idea. There many practical aspects of setting up a new small business. Before you consider the practical actions, have you considered whether you should be doing it in the first place? The following article looks at the issues you'll need to consider before embarking on your new business idea, including your motivations, your level of skills and experience, a quality of your business idea, the risks and rewards involved and where to begin....

Why Start a Small Business? - there are many reasons why people want to start around enterprise. The most common one of those is to be able to make their own decisions, by capitalising on the strengths of their specialist skills in order to achieve a higher level of financial reward . Some people simply want the personal satisfaction of knowing that they are in control of their own destiny and have a chance to achieve financial independence and control over their day-to-day lives. Other reasons include creating a family enterprise that can be passed on from father to son, mother to daughter. In addition, the increases in the number of women going back to work, or a work from home business idea, after having children is increasing - many women are seeking flexibility that self-employment offers to have a healthy work life balance. Being your own boss is sometimes adopted out of necessity (as opposed to choice), as the economic downturn has increased unemployment through both voluntary and mandatory redundancies.

Do You Have the Right Stuff? - starting a small business can be a life changing event. It takes a certain type of person to achieve business success. So before you begin you must ask yourself some difficult questions about yourself:-

• Do you enjoy taking risks? In other words, are you prepared to accept the consequences of business failure, such as the loss of your personal investment?
• Have you got the self-confidence, passion, physical health, competitiveness and self belief in your own abilities?
• Are your self-starter who can get up in the morning and have the self-discipline to concentrate on implementing a business plan?
• Can you work on your own and independently without the support of team members?
• Do you have commitments to your family which means that your working hours will be restricted?
• Are you prepared to learn from your mistakes, work long hours and sometimes unsociable hours to get the job done?
• Can you see yourself in three years time managing a successful and growing business?
• How do you react to stressful and difficult circumstances?

Do You Have Appropriate Skills and Experience? - you may have the right attitude and passion to start up on your own, but do you have the appropriate skills and expertise? Most entrepreneurs need to be multi-skilled and be able to cope with the constant change from factors outside their control. Virtually all business owners have to go out to 'sell themselves' and their business opportunity to their respective market. even the best home based business idea needs assessment of appropriate skills base. For some entrepreneurs, the prospect of cold calling or approaching prospective customers using professional selling skills may seem daunting. For others, a lack of business training, expertise and skills to manage a firm that delivers small business services, may represent just as big a potential problem. Do you have the right level of business and industry knowledge to make the business a success? Most industry knowledge can only be gained through experience of failure and success. Lack of experience will mean that knowledge will have to be researched theoretically, to justify yourself that your business idea is based on proven business details. Organisational and management skills are also vital to achieve business success; the ability to project manage multiple tasks, across different disciplines, under pressure and sometimes simultaneously. For instance, you may have to employ staff and have the confidence to lead. motivate and delegate activities you cannot do yourself. Are you a leader and do you have the appropriate business knowledge and legal expertise to employ staff, manage their concerns and aspirations and lead them? Managing a small business also entails a large amount of financial acumen and administrative paper work regarding bookkeeping, business accounting, tax issues and cash flow issues such as invoice factoring and forecasting. It is unlikely that all entrepreneurs will have all the necessary management skills from the outset. Try and list your strengths and recognize where you will need to train and educate yourself to obtain the necessary skills required.

The Business Idea - many people leave full-time employment with long experience and expertise in a particular field in order to start up on their own. Does their business idea have to be so unique and different that nobody is ever thought of it before? There are not many new business ideas around - just old ideas marketed and implemented differently. Often pursuing a tried and proven business idea is less risky than trying to dream up a fantastic new idea (which supposedly no one has ever thought of before). If you are considering leaving full-time employment to go it alone, can you exploit the contacts and friendships you may have made within your existing employer? Have or will you leave your old full time employer on good terms? Most good business ideas are based on the individual's good understanding of a particular industry or market sector. To attempt to enter a market you know nothing about present's obvious risks, as ignorance to off the mentality and behaviour of buyers, their needs and wants, may prove problematic. It is vital that the business idea is tested through professional market research processes, in order to understand who the participants in the industry is, what are the distribution channels used, who is the competition, and most importantly - what do customers want.

Financing Your Dream - it is becoming increasingly difficult for new business start-ups to access business credit from high street lenders. Over recent years, small firms have successfully obtained increasingly larger amount of business debt, in order to start-up, survive and grow. However, the credit crunch is making it more and more difficult for entrepreneurs to raise the capital required to start up. The main sources of finance are using a small business bank loan, commercial property mortgage, obtaining a business grant, finding venture capital or offering debentures.

Small Business Advice - it is difficult to know who to speak with to discuss your business ideas. If you know a small business person that has been established for a number of years, a frank and honest discussion of the issues involved in setting up and managing a business, would be very useful. There are a host of books and websites regarding starting and running a business - most providing useful business guides and contact details. There are also non for profit advice centres such as businesslink who may be able to help you. If you have an accountant, they will be ideally placed to go through the financial aspects of your business idea and explain the practical aspects of starting a new business. Think very carefully before getting over excited and rushing in - you have to be utterly confident in yourself, your business idea and check with others it is viable and plausible.