Set Up A Successful Small Business: Teach Yourself

Vera Hughes, David Weller

• Publisher: Teach Yourself
• Year: 2010
• eBook ISBN: 9781444129656
• Topic: Business
• Subtopic: Entrepreneurship
• Index: Business

[Teach Yourself] Set Up a Successful Small Business will help you to get your business venture off the ground and turning a profit. Arming you with a strategy for success, the book will support you through the entire process, from getting to grips with business finance to effective marketing. Written by small business owners who have been through it all themselves, you'll also receive insider tips to help give your business the edge.
NOT GOT MUCH TIME?One and five-minute introductions to key principles to get you started.
AUTHOR INSIGHTSLots of instant help with common problems and quick tips for success, based on the authors' many years of experience.
TEST YOURSELFTests in the book and online to keep track of your progress.
EXTEND YOUR KNOWLEDGEExtra online articles at www.teachyourself.com to give you a richer understanding of setting up your own small business.
THINGS TO REMEMBERQuick refreshers at the end of each chapter to help you remember the key facts.
TRY THISInnovative exercises illustrate what you've learnt and how to use it.

1

The first step

In this chapter:

• Is it saleable? A sound product or service; the market need; suppliers
• Can you sell it? Personal attributes required; self-motivation; organizational ability; management of time; energy and health; communication skills; pilot scheme

The first thing anyone needs before setting up any kind of business is an idea, or perhaps more precisely the idea of starting in business at all. It sometimes happens in a blinding flash, but more than likely it insinuates itself and gradually the idea of setting up a business develops until it is hard to remember when it was not there.

Before the idea takes over too much, certain questions need to be asked in order to keep things realistic and in proportion – not to kill off the idea, but rather to have a controlled development of it.

Talking to a neutral business adviser could be a sound way of doing this. For example, good Business Link managers say that the most important part of their counselling work for potential business start-ups lies in dissuading people from investing their life savings and re-mortgaging their houses for a business idea that is flawed and will never succeed. The majority of people who get as far as going to their local Business Link for advice turn up with ideas that could spell disaster for them if the ideas are not at least adapted significantly and they are often abandoned. Of those who go ahead and launch businesses, many will fail within three years (30 per cent according to the Department for Business, Innovation & Skills’ statistics), and only a small minority will actually grow. So while not wishing to put a damper on things from the start, it is only fair to point out how important it is not to get carried away with an idea just because you want to believe in it. Ask an objective business counsellor to assess the idea before you sink your money and your family’s security into it.

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Insight

Contact your local Business Link for objective advice. They helped us with our broadband application.

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Is it saleable?

A SOUND PRODUCT OR SERVICE

The first question to ask about your idea could take the following form: What precisely is the product or service I am going to offer? followed by the key question: Why should customers buy MY product or service rather than those which exist already?

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Insight

If you are not honest with yourself, you might get the answer you want, not the right answer.

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There is a distinct advantage if the product you are intending to offer is a legal requirement, in the sense that, potentially, you have a captive market. Items related to health and safety, for example, fire extinguishers or even Fire Exit and other related statutory signs would come into this category. You can probably think of other areas which could apply.

Nevertheless that key question still needs to be answered, and answered realistically: Why should customers buy MY product or service rather than those which exist already? Make a list of the good points about your product – they could form the basis of your marketing strategy.

THE MARKET NEED

Continue to question your idea:

• How many people are likely to want to buy product or service?
• Will the numbers be sufficient to justify proceeding with the idea?
• What competition already exists?
• How well established is it?
• Will I be able to compete?
• Is there a particular segment which I could concentrate on?
• Is what I am considering generally an expanding or a contracting market?
• Will I be infringing, even inadvertently, other people’s intellectual property rights? Is your idea really your own, or are you copying someone else’s? Visit the Patent Office website, www.patent.gov.uk.

The finding of the answers to these and other related questions forms the basis of the market research exercise which is necessary at this early stage to turn a hunch or idea into something more down-to-earth and practical, or to confirm that the original idea is sound.

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Insight

If you are using questionnaires, allow people to be anonymous if they wish. If people want to add their name, they’ll always find somewhere to write it.

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As a small trader or partnership, you cannot afford to embark on a very large market research exercise, but it is worthwhile trying to establish whether what sells well to friends and colleagues, or business contacts, will be bought by others.

You can research the market in an informal way by asking friends, family and colleagues what they think of your idea. A more businesslike approach is to send out or give out a short questionnaire. You could do this at networking meetings, on-line, or with gatherings of family or friends. Expect a better response if you hand out the questionnaires personally and get people to complete them then and there.

Whichever method of distribution you choose, design your questionnaire carefully, taking these guidelines into account:

• One A4 sheet at most, or computer equivalent
• Ask questions which require tick box responses, people don’t like to write long answers
• If you ask people to rate an attribute of your product/service, give them an even number of boxes to tick – four or six. If you give them five they are likely to go down the middle
• Leave space for additional comments
• Don’t ask for a lot of personal information. You might be infringing the Data Protection Act – refer to www.dataprotection.gov.uk
• Make giving their name optional. People often give ‘truer’ answers if they know they are anonymous
• Draw up a good system for analysing the responses.

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Insight

Use your networking contacts to do some market research, your local Business Clubs, for example.

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Your local Business Link runs market research courses for people starting up in business. Ask at your Job Centre, your local Business Link or your local college to see what courses are available. The courses include not only market research, but marketing, book-keeping, selling and many other matters dealt with in this book. A book can give you useful general guidelines – a course tutor can give you personal attention and expertise. ‘Taking it further’ includes typical courses run by Business Links.

SUPPLIERS

If your business idea involves selling a product, you will need to obtain either the raw materials which you are going to transform into something else, or the components which will create your finished article.

These items will need to be obtained from suitable suppliers. You will find that there is no shortage of people wanting to sell you things for your business. What you must do is draw up your product specifications very carefully and decide on the suppliers (it is probably better to have more than one source) who will provide that quantity and the quality you need at the price you wish to pay.

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Insight

Search the web – it’s the only place we could find collarless shirts and stiff collars!

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Make a list of the components you need, and for each component write down the potential suppliers, their prices, delivery dates, settlement terms and product quality. Making such a list helps you to think clearly and objectively.

Can you sell it?

PERSONAL ATTRIBUTES REQUIRED

The personal attribute most required is belief in the product or service you are about to sell. If you do not have absolute faith in your product or the quality of your service, you will never get your business off the ground.

You must try not to be put off if other people’s reactions do not initially match your enthusiasm.

SELF-MOTIVATION

The belief in your product or service is the first step in self-motivation; what follows depends on your own ability to move off the starting line and keep up the momentum.

Sometimes people feel that those who have their own businesses are lucky, ...

Table of contents

• Cover
• Title
• Copyright
• Contents
• Personal introduction
• Only got a minute?
• Only got five minutes?
• 1 The first step
• 2 Business finance
• 3 Premises
• 4 Methods of trading
• 5 Marketing
• 6 Selling the product or service
• 7 Doing the books
• 8 Personal finances and business expenses
• 9 The professionals
• 10 The office
• 11 Employing others
• 12 Opening a shop
• 13 Import and export
• 14 e-commerce
• 15 Running a home and a business
• Taking it further
• Index