Starting up a Business
Starting a business can be an exciting and sometimes daunting experience. The key to developing a successful business begins with research and planning. It is very important to conduct some form of research on your proposed idea - firstly to establish - is there a market for your business and secondly, to assess what costs are going to be involved. Your market research will also determine how you should promote and market your business and will help you plan all the financial aspects of your new business including projected profit from sales, monthly outgoings, overall budget required and income you will earn from the business. Your research should also including sourcing information on all the possible supports that are available to help you from agencies like Local Enterprise Office (LEO)Westmeath, Department of Social Protection and the Revenue Commissioners.
Preparation in the form of deliberate planning is the most important thing that you can do to ensure that your business idea gets off the ground and continues to grow. Once you have conducted market research and are convinced that there is a market for your product or service, the business needs to be planned by developing a business plan that outlines ways of raising and sourcing finance, choosing premises, recruiting staff, proposed management structure, marketing strategy, and plans for growth. It is important to consider the following:
(i) Assessment of your idea
Think about why you are going into business. Will there be a demand for your product or service? Answering the questions below may help you assess your idea and its viability:
- Why is it a good idea?
- Based on what opinions / assumptions is it a good idea?
- Who would be interested in your product / service?
- Are there any reasons why your idea may not work?
- What are the reasons that your idea would work?
- Is your idea already in the market in some form, and if so how does your idea differ?
(ii) Market Research
Naturally you will want to get up and running as quickly as possible, but prior investigation is crucial if the business is to have the best chance of success. Market Research is an essential part of preparing to open a new business. What is the size of your market? What products do people most need or want? Will there be a long term demand for those products? Where will you source your products from? Who are your competitors? Have any similar businesses closed recently? Can you check with any local agencies if anyone else is planning to open a similar business in the future?
You need to spend time researching and answering these questions long before you open your business as it may influence your decision on where you locate, how much you charge, and even what the exact nature of your business may be. All this information forms the basis of your business plan which you will need to produce.
For certain types of businesses, Feasibility Study Grants are available from Local Enterprise Office Westmeath, for more information; please contact Aileen Mc Garth or Tracey Tallon.
(iii) Prepare and plan your business strategy. Click here to view sample Business Plan
To stay operational, a business must be profitable, or at least have the potential to become and remain profitable after it has recovered its start-up costs.
Investors will only invest in a business if they can clearly see an opportunity to make profit. One well prepared document is essential to introduce a business idea to bankers, investors, state agencies and business support groups. This is the Business Plan.
Generally, you will need money for two things, getting started and keeping the business going. To start the business, you may need what are called Fixed Assets, and to keep the business going, you will need what is called working capital. Fixed Assets are things which you can see and which are fairly permanent. They include premises, building alterations, cars, vans, tools and machinery.
Estimating what you will need for fixed assets is usually straightforward and often involves no more than looking for quotations or negotiating.
Working Capital is the money that works in your business. Think of it this way; you need money to buy raw materials, to pay your own wages and to meet your overheads so you can produce goods for sale. You won't usually get money for the goods you sell until you make and deliver them. You need therefore to have the cash ready to meet your bills until you get paid. That money is called working capital.
Remember the longer you have to wait to get paid, the more working capital you need and the more sales you make, the more working capital you need. Working Capital is the blood in the veins of your business. More businesses fail because they do not have enough working capital than for any other reason, so it is essential you manage your working capital.
At present, it is important that you have a clear business strategy negotiated with your bank, including access to overdraft facilities and loans and know what rates of interest you will be charged and what penalties are in place should any default situation occur.
Remember to research the possibility of grant aid or funding from other sources other than a bank.
For information on Financial Supports from Local Enterprise Office (LEO) Westmeath, click here.
(v) Marketing and Promotion
Marketing has been described as "Finding out what people want and selling it at a price they are prepared to pay and at a profit to yourself". Through your market research you should have a good idea of your customers, who they are, their location and their spending habits. You should also have clearly identified your competition. Once you are aware of these two factors, a marketing policy should be set out. The four main factors in a marketing policy are:
Product not only applies to the product you are selling but also the services around the product. Range of products, choices, brand names, and originality. Type of packaging, service, what extras are you offering?
Price has a number of associations that must be taken into consideration. Not only does it determine your profit margin, it also indicates quality and value to your customer. Once your price is set, it is difficult to change without compromising your product in some way. If your price is set too low, customers will not then be prepared to accept an increase. If set too high, customers will not return to see the price decrease. It is also essential that your costings be calculated correctly, high volume will not necessarily guarantee a good return.
Place: This factor is more relevant to some businesses than others. If your business requires you to travel to the customer then location is not a factor to your customer. If you are in a retail business then your location should be convenient to your customer.
Promotion: There are a number of ways of promoting your product. Direct mail; mail shots to your list of potential and existing customers. Advertising and publicity, newspaper advertisements, Golden Pages etc. Direct sales. A more recent form of advertisement and promotion is the internet. It may be beneficial to investigate whether a web site would suit your business. A web site can act as a brochure for your business or it may be possible for you to conduct transactions on-line.
Finally, here is a list of things you can do now to help get you started:
Start Your Own Business Guides and Workbooks are available from Local Enterprise Office (LEO) Westmeath
Specific guides are available on setting up a Retail Business, Food Business, Coffee Shop / Restaurant or a Craft Business.
Attend a LEO Start Your Own Business Course held throughout the year in Mullingar and Athlone and receive a free Guide to Starting Your Own Business worth €20.00.
Seminars on Getting Started in Business; Tax Registration; Raising Finance; are held throughout the year.
After completion of a Start Your Own Business programme, make an appointment to see a Business Advisor in Local Enterprise Office Westmeath. They will help you plan and develop your business idea and also inform you of all supports that are available to you.
Log onto www.smallbusinesscan.com; www.basis.ie; www.mybusiness.ie