Ready to start a business?

Starting a new business is both exciting and rewarding, but it is also full of challenges. The level of commitment that you will need should not be underestimated.

The success of your business will partly depend on your attitude and skills. This means being honest about a range of issues - your knowledge, your financial status and the personal qualities that you can bring to your new business. Commitment, drive, perseverance and support from family and friends will go a long way towards transforming your business idea into reality and will be especially important during the early days.

The following article will help you decide whether you have what it takes to set up a new business. It will also provide a look at the day-to-day reality of starting a business and outlines the skills and qualities that you will need.

The Entrepreneurial Quality Check

Research has shown that there are certain qualities commonly found among successful business people.

A typical entrepreneur will have the following key qualities:

  • •Self-confidence - a self-belief and passion about your product or service - your enthusiasm should win people over to your ideas.
  • •Self-determination - a belief that the outcome of events is down to your own actions, rather than based on external factors or other people's actions.
  • •Being a self-starter - the ability to take the initiative, work independently and to develop your ideas.
  • •Judgement - the ability to be open-minded when listening to other people's advice, while bearing in mind your objectives for the business.
  • •Commitment - the willingness to make personal sacrifices through long hours and loss of leisure time.
  • •Perseverance - the ability to continue despite setbacks, financial insecurity and exposure to risk.
  • •Initiative - the ability to be resourceful and proactive, rather than adopting a passive 'wait and see' approach.

The Business Skills Check

As a business owner you need core skills to execute your ideas to ensure that your new business survives in the long term. You should start by assessing your own skills and knowledge. This will help you decide whether you need to learn new skills or draw on outside help by delegating, recruiting or outsourcing.

Key business skill areas

Financial management - This includes having a good grasp of cashflow planning, credit-management and maintaining good relationships with your bank and accountant.

Product development - The ability to make long-term plans for product development and identify the people, materials and processes required to achieve them. In order to make such plans you will need to know your competition and your customers' needs.

People management - This includes managing recruitment, resolving disputes, motivating staff and managing training. Good people management will help employees to work together as a well-functioning team.

Prepare a business plan. It is essential to have a realistic, working business plan when you're starting up a business.

A business plan is a written document that describes a business, its objectives, its strategies, the market it is in and its financial forecasts. It has many functions, from securing external funding to measuring success within your business. Business link advisors can show you how to prepare a high-quality plan using a number of easy-to-follow steps. Please contact us if you need this service!

Marketing skills - A sound marketing approach will help you set up and oversee sales and marketing operations, analyse markets, identify selling points for your product and following these through to market. Contact us for our guide on how to write a marketing plan and market research and market reports.

Supplier relationship management - The ability to identify suppliers and positively manage your relationship with them. Contact us for our guide on how to manage your suppliers and choosing the right suppliers.

Sales skills - Without sales your business cannot survive and grow. You need to be able to identify potential customers and their individual needs, explain your goods and services effectively to them and convert these potential customers into clients. Contact us for our guide on how to reach your customers effectively.

You can get advice on any of these issues from your local Business Link advisors. Find your local Business Link advisor by filling in our contact form.

The Market Research Check

You need to research your target market and your competitors carefully. A common misconception is that entrepreneurs who have failed simply lacked sufficient funding or did not put the right team in place. In many cases new businesses fail because they have not spent enough time on researching their business idea and its viability in the market.
There are certain criteria you can use to establish this:

  • •Does your product or service satisfy or create a market need?
  • •Can you identify potential customers?
  • •Will your product or service outlive any passing trends or capitalise on the trend before it dies away?
  • •Is your product or service unique, distinct or superior to those offered by competitors?
  • •What competition will your product or service face - locally, nationally and globally?
  • •Is the product safe?
  • •Does your product or service comply with relevant regulations and legislation?
  • •Can you sell the product or service at a price that will give you sufficient profit?

Market research can play an important role in answering many of these questions and increasing your chances of success.

How much research you do will depend on the time and funds you have available. You could:

  • •informally canvass the opinion of friends
  • •talk to industry contacts and colleagues
  • •survey the public about whether they would use your product or service
  • •ask customers of competing products what improvements they would like to see
  • •set up focus groups to test your product or service
  • •monitor what your competitors are doing
  • •look at what has and hasn't worked in your industry or market niche
  • •study wider economic and demographic data

The more information you have, the better placed you will be to make your business idea a success.

The Financial Commitment Check

Securing the right financing for your new business is crucial, as there is no guarantee that your business will make money for you straight away.

You should aim to have sufficient reserves to last you for several months without an income from your business. For tips on how to keep afloat during the early months of your new business, contact us for our guide: how do I survive until my business is off the ground?

You need to be honest about your start-up capital reserves. If there is not enough money to see you through until your business begins to make money, then you are not ready to start up. Being realistic at this stage is likely to save a lot of pain. If you decide to launch your new business without enough funding behind it, keeping it afloat will prove extremely difficult. For more information, contact us for our guide on how to choose the right finance when starting up.

Finally... find out if you've got what it takes to START A BUSINESS by answering the questions posed at African Preneur Blog