In our last article we began with the two main ways of getting into a business.
- The complete startup, building from the ground up.
- Buying an existing business
Our previous article focused on buying an existing business, so in this article we are going to focus on building from the ground up.
Speak to any entrepreneur or small business owner and you’ll quickly learn that starting a business from scratch requires a lot of thought and work.
Generating a business idea from the start means that you must see a gap in the market for it to be any chance of being a success. Most great new businesses come from someone noticing a problem or an issue that has yet to solved.
The problem to be solved could be product focused, service focused, or locality focused. Or all three.
Let’s look at a scenario.
You live in a town, or region that has a large mining and manufacturing base. The companies employing staff are required to supply protective clothing that gets covered in grime every week.
But each worker is responsible for cleaning their own uniforms.
It’s very hard to get these clothes clean in a domestic washing machine, and anyway the grime eventually damages these machines.
There appears to be a ready-made market opportunity to set up an industrial laundromat designed to clean the dirtiest and toughest stains for this market.
But having a great problem-solving idea is only the beginning.
Some budding entrepreneurs understand the effort necessary to create a business, but they might not be familiar with the many steps required to launch a business venture. If you’re willing to put in the effort to build a business, you’re going to want to know the steps needed to reach your goals.
Before you invest more time and money, test the idea.
1. Conduct your research – Is it truly going to solve the problem?
2. Do you know how much you will need to invest?
3. Can you really make money from solving this problem, considering the investment required?
4. How much can you charge – will your intended market willingly pay for the service/product?
5. How will you let your target market know that you have a solution?
6. Do you have a cash flow pan to ensure you can survive financially while you build the business?
The world needs entrepreneurs and people with ideas, but history is littered with good ideas poorly implemented. Make sure your idea has a chance to flourish.
As business accountants, we are in an ideal position to help you improve your chances of success. We can assist with a business plan, and help you map out a cash flow plan.
Give us a call today.