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  How to start a Business -

The Steps

According to Buddha “there is more than one path to enlightenment”.  So too is there more than one path to successfully starting a business. While there are numerous paths to business success and numerous ways to travel on each path there is at least a number of common steps that you can tread to aid you in your quest for life success through small business.


While I will discuss a number of steps in order,  it is worth noting that in practice, the order typically does not flow out as neatly as explained.  You will find you commence one step only to find that you need information from a latter step to help you complete your current step. 



For instance the step of undertaking your financial feasibility you do a number of times, as you find more information and as your idea becomes clearer.  You may conduct a ball park start up financial feasibility assessment using the business start up calculator today.  This may give you some indication of how feasible your business idea is, and it will only take you a few minutes to do a ball park calculation.


As you progress with your business idea you will have more information about expenses and maybe more information about your customers.  So you will return to the business start up calculator and redo your feasibility assessment.  This time your business start up assessment will be a little more accurate than was your first attempt.


Again the step of establishing your vision is one you are likely to keep refining as you find out more about your market place, your skills and develop your understanding of what you really want to do. 


Business Vision

Establishing the vision for your business is quite significant.  About a decade ago FJ Story surveyed America’s 100 fastest growing companies to discover their distinguishing attributes. He reported 17 lessons from this study and the number one lesson of these was “ all of the people involved in growing their own businesses have a crystal clear vision as to where they want to get in the long term”.  This lesson highlights the importance of goal setting for business success.



Is your idea financial feasible?  As a starting point you should undertake a basic financial feasibility assessment  to provide you with a sense of how it works and some ball park indication as to the feasibility of your idea.  You should also join the Business Startup Club and obtain a free initial assessment of your idea.


Avoiding the Traps

Historically there are a number of traps that are typically the cause of the demise of those business start ups that don't make it.  As you can identify these traps you can prepare yourself to deal with them and learn how to avoid them.  These traps can be thought of as the "lack ofs". Lack of money, experience, planning and a distribution system.


How do you rate for each of these traps.

Money:  The rule of thumb is that you need access to sufficient money not only to get your business started but also to survive for 6 months without any sales.  If this is a hobby that you are turning into a business while you continue with another job this figure could be zero.  However if your totally livelihood will be wrapped up in the business this may be a significant amount of money.  Clearing in this case a detailed cashflow plan will be needed.  We should understand that the rule of thumb states access to sufficient funds.  So it doesn't mean you actually need that money sitting in a bank account.  You could for instance have a loan facility to provide your funds.


Experience:  There are two levels of experience required:

Experience in the industry - Experience in the industry is essential to know the rules of thumb, the industry norms, the key contacts and to understand how things work.  If you don't have the experience in the industry consider how you could acquire it.  This may involve obtaining a mentor, joining an industry association, working short term in the industry, reading industry publications or using industry specific start up guides.

Experience in management - Are you capable of handling your administrative and planning load?  For instance can you read your financial statements, can your prepare your budgets.  Do you rate well with your ability to deal with people, whether that be staff, contractors, customers, suppliers.  How do your negotiation skills rate.  Are you good at seeing the opportunities in the market place and adapting your team to take advantage of them.


A Plan: The chances of success of your business will be increased when you have developed a good business plan.  The degree of effort you put into your business plan in some sense will depend upon how crucial the success of the business is.  If you are investing significant dollars or giving up a job you are likely to need to put real effort into your business plan before you start.  However if it will initially only be a part time business you may find it effective to have a basic plan and develop the plan as you develop the business.  At the very least your plan will be a checklist of the action you need to carry out.  View an example start up checklist.


Distribution System: Originally this was referred to as location but as we have moved more into the digital age physical location has become less significant for most businesses.  How much thought have your given to your distribution system?  For instance you may distribute by sell goods from a shop front where people come into your shop and purchase, you may also distribute by going to your clients premises and providing a service.  Alternatively you may operate an online business where your clients download your product from the net.  How well thought out is your distribution system.