It’s very exciting to think or even dream about starting a business but you need to get down to practicalities very early on in the process if you’re going to turn your dream into a successful reality. Mistakes made early on can prove to be very expensive to correct.
What Should I Do Before Starting A Business?
1 – Start Your Own Business Diary
It’s a good idea to start a business diary to record your thoughts, feelings and beliefs as you begin the process.
There are two good reasons for doing this:
- Writing forces you to think clearly. There will be so many exciting thoughts going through your mind that things can get muddled. You need clarity of purpose.
- Writing creates a record of what you were thinking and why. As your experience increases, your beliefs and knowledge change so it’s good to be able to look back at why you had particular thoughts and made certain decisions. Your memory will play tricks on you but your diary keeps you grounded in reality.
No one else needs to read it but the few minutes each day it takes to write down what you’re thinking and feeling will be very valuable.
2 – Get Clear On Your Own Motivation
Businesses start for a wide variety of reasons ranging from “I’ve got a brilliant idea that could make me a multi-millionaire” to “I’ve got to start my own business because no one else will employ me.”
If you’re sick of being an employee and being treated by your boss, capture those thoughts in your diary. What is it that you hate about the way you are being treated?
Having a record will give you something to look back on when you’re employing your own staff so that you treat your employees better than you were treated. If you’re lucky to get a great team, you want to keep them together and not to drive the best and most ambitious away to startup another business that will compete against you.
If you want to be rich, record why you want to be wealthy. What will it mean to you and your family?
I won’t pretend that starting a successful new business is easy. It often looks much easier than it turns out to be and having your motivations clearly established upfront will give you something to look back on when the going gets tough. It will give you the persistence to carry on when it would be easier to concede defeat.
Motivation comes in two forms:
- Away from a painful problem
- Towards a pleasurable solution
Some people have a bias and keep moving away from pain or towards pleasure and gain. Others need away motivation to get started and towards motivation to carry on.
Think back about your past? What has successfully motivated you to achieve success? Where was your motivation too weak to get past the obstacles involved?
I recommend that you record both types of motivation and update it as your thoughts change.
3 – Get Clear On Your Own Personal Skills & Attributes
You want to build your new business by playing on your strengths. You need to recruit staff to cover for your weaknesses but you can’t go too far the other way as you won’t pull together as a team.
I recommend the Kolbe A / Strengths Mastery Advantage Test to learn more about yourself and what kind of problem solving preferences you have.
4 – What Type Of Business Do You Want To Start?
Sometimes it’s obvious what type of business you want to own and manage.
You have that great idea that will make millions or you have twenty years experience and mastery in a particular trade or profession.
Other times, it’s not clear.
You want your own business but you don’t know what you want to do.
The book “The Start Your Own Bible” gives you a short introduction to 501 different business types.
If you don’t have experience of a particular trade but you want to start a business in it (e.g. plenty of people have dreamt about having their own restaurant), you need to get specific knowledge.
There is no substitute for working within the sector to see the business problems and the issues involved with serving and satisfying customers. You’ll also get to see what works and what doesn’t.
At a minimum, talk to people who have worked in the trade and ask them a few key questions:
- What did you like best?
- What are the worst things about working in this type of business?
- How would you start again?
- What would you do differently if you started again?
- What are the top 5 lessons you’ve learnt from your experience?
5 – Can You Attract Enough Customers To Your Business Start-Up?
The biggest hurdle for just about every small business is to attract enough customers to get the business established.
Some lucky people sell into a market vacuum where there aren’t any competitors or substitute products but few of us are that fortunate.
The vast majority of new business owners underestimate how difficult it is to get customers to buy and make far too over-optimistic forecasts about their sales revenue and cash receipts.
These false business plans give an appearance of prosperity where it has no right to exist. The business spends money it can’t afford and the business owner regrets it after a few months.
If you don’t have a background in sales and marketing, I recommend that you buy some training to teach you the basics.
As a small business, you need to avoid big company marketing and concentrate on direct response marketing which gives you a measurable result.
6 – Be Clear On How Much Money You Need To Start Your Own Business?
Many business start-ups get very focused on the need to raise business start-up cash but it is difficult.
It’s much better to go to the bank after your business has been trading for six to twelve months and say “this is what we’ve achieved so far but we need to borrow to take it to the next level” than to present an unproven business case to a risk averse bank manager.
Look for ways that you can bootstrap your business.
If you want a chain of shops, start with a market stall.
If you want a professional firm, start attracting and servicing clients while working from your own home.
Keep costs and expenditure low and prove that you can meet and beat the 3 risks of starting a new business.
Success builds on success. Start small.
7 – Put Together A Business Plan For Your Start-Up
There are two great reasons why everyone says that you must have a business plan:
- It clarifies your thinking for yourself and for other people involved.
- It’s much better to lose money on paper than in real life.
Work on both the words and the numbers. Each has its purpose.
Play with the numbers. Vary your assumptions. It can be very revealing (and quite frightening) how small the difference between a successful business start-up, struggling and even failing to get established.
The biggest uncertainties lie in your forecast for sales revenue. That’s why I think great training in marketing is so important.
There is low cost business planning software to help you. I think this is much better than getting someone else to write your business plan for you.
What Are Your Tips For What To Do Before You Start A Business?
If you’ve started a business, what other tips would you give to people who are getting ready to launch their own business.
Leave your comments below please.