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Starting YOUR own business, how to do it and tips on how to set up a new business

Topics covered on this article:

Employed and don’t know if you should risk it?
What do you need to start your own business?
Where do you get the idea for your business?
How do you know what idea is the best?
What is a business plan and a business strategy?
Resources for your business
How do you get customers?
Continuous improvement
Further reference

If you are thinking on starting your own business you might be wondering how do I do it? or do I have what it takes to do it?. The idea behind this article is to give you what the author considers the basics to start your own business.

Although it doesn't cover all the details of what to do and how to do it (because every project is different in nature and the topic itself is extensive), I describe what I have found to be the fundamental steps for a successful business. You might want to read a bit more about myself and how did I get the information to write this article. If you want to do so please visit the page about Xpressions design.

Employed and don’t know if you should risk it?

I have met people who have had the idea of running their own business forever but don’t know how to do it; they are scared of risking the secured income from their employers. I normally compare this stage to the time when we were young and decided to leave home and start our own life, either because we get married or because we’ve decided to have some sort of independence. Most of all we have passed through this stage in our life and we know how scary it is to think that you will no longer get the money and support you need from your parents. Some people find this easy and some might find it difficult. Normally, those who believed they could do it, they survive and succeed whereas the others will perhaps struggle a bit and finally succeed and the rest go back home because it was not the right moment to leave.

You and only just you know when the right moment to achieve this independence is. The important thing here is that you need to understand that this is a process, where perhaps at the beginning you will not receive the same income you have at your current job. The same way you had a base salary when you left home and then you got to the position you have now; the same will happen when you leave your job and start your business. There will be less income at the beginning and depending on how much effort you put on your business you will reach the point where your income will be the same or better than your old job. When you take a decision like this, you have to evaluate the external risks and yourself (strengths and weaknesses) to know if the right time has come to leave your job. Also very important: don’t forget to map out your business plan to know what month or year you should cease your job while you get everything ready for your business, get some initial sales and customers. If you leave your job and start from scratch you will find the process very scary cause you don’t have any secured income at all and will probably think of going back to your previous job, don’t do that because this bad experience will put you away from thinking of doing it again.

What do I need to start my own business?

As a freelance graphic designer I have witnessed many successful stories of new business. Among all the factors I believe matter for their success there is one that I believe matters the most: Self confidence (Believe that you can do it).

And when I say believe that you can do it I mean: you KNOW you can do it because you have very good reasons to believe it. Some people might not believe on this and will probably stop reading this article at this point but in fact this is part of a simple formula for a successful business which (although very basic) looks as follows:

YOU (believe you can do it) + BUSINESS IDEA + BUSINES PLAN + RESOURCES + CUSTOMERS = BUSINESS!

All right you might be asking yourself: what is a good business idea? I won’t ask you to buy a restaurant franchise and run it or give you a list of ideas for innovative products because even if I do; chances are they will not be successful for you because you don’t believe on it or it is not precisely your area of expertise, and without knowledge there is no POWER. I will explain this in more detail later on but for the moment just bear in mind that; KNOWLEDGE is a huge advantage for the foundation of your business.

Where do I get the idea for my business?

You might have designed something that you have worked on for a while or you might be an expert in something and you know that you can sell that KNOWLEDGE; well that’s a good start. Whether you want to sell products or services, for every project we have in our life if we like what we are doing and we are good at it we will always get the best results with less effort. Here is when you should ask yourself: what do I enjoy doing? Perhaps your friends and family always tell you how good you are at something, well there it is, that is a good business idea. If you are good at something and enjoy doing it, you have a HUGE advantage over your potential competitors. This narrows down the formula described before to the following:

YOU(believer) + what you are good at and enjoy doing + BUSINES PLAN + RESOURCES + CUSTOMERS = BUSSINESS!

I suggest you develop a list of things that you enjoy doing or you know you are good at, and be careful: make sure you know that you are good at it; not just think you are! As I mentioned before; this might be because your friends, family or colleagues sincerely compliment your work. Let’s set a couple of examples to illustrate this:

Example No.1:

Let’s say you are good at talking and your passion is decoration; you read, shop, are always up to date on the latest fashion articles, you have the knowledge and people compliment you for that. Because you are so good at talking (great sales weapon) and have knowledge in fashion you might be thinking on selling your own brand of decorative products. Perhaps you are not so good at talking but you have the passion for decoration, well then you only need some RESOURCES (I will talk about this later on) to make the idea work. The important thing here is that you have the knowledge and that is all you need to start.

Example No.2:

You are a great surfer and you love the beach. Have you ever think of sharing your knowledge with others by teaching while running your own surfers school where people can subscribe online through your website? You don’t have to work hard and boringly in a place you don’t like to get the money you need to live, you are better off selling your experience and knowledge.

If you don’t believe with all your heart and soul, enjoy what you do and are good at it, you don’t have 50% of what you need for a successful story, simply because everything you build is supported by the foundation: you, and if you are not sure the whole system will not be stable.

If you know you are good at something that makes you stand out from the crowd, think about it, it might be an excellent business idea, use that knowledge!

How do I know what idea is the best?

The one that your instinct tells you? No, don’t do that. There might be some things that will be instinct driven while you run your business but this is definitely not one of them. You might drive this decision based on the time you want to spend between setting up the business and getting the payback or based on the resources you already have or need (call it money, hardware, people) or may be based on how you see your business in the future. Again it all depends on your goals.

One thing you should keep in mind is your strengths and weaknesses. No matter how big you see your business in the future, if one of you weaknesses is patience, you will find the process a very frustrating one. Most people don’t consider these factors when making decisions and they should because your personality plays an important role in the whole process. By evaluating yourself you are evaluating risks.

External risks have to be evaluated before taking a business decision as well: it is not the same to start a manufacturing plant with expensive machinery and equipement or selling dangerous goods than selling imported products online. They all have a different degree of risk that can be controlled based on your knowledge of the topic. Risk management is something you must be doing continuously to guarantee the success of your business even when the business has matured.

In conclusion, next to the list of ideas that you developed previously attach the list of risks that each idea involves (you will need this list when you develop your business plan). You might want to sort the risk types by: Environmental risks, Personal factors, Economical risks, Political risks, International risks (Market change). Every business has different types of risks, you must carefully go through each one of them to evaluate to what extent you can overcome them.

What is a business plan and a business strategy?

If you don’t plan your holidays they might not go as expected. In order to make things happen the way we picture them in your mind you need a goal and a plan.

Setting your goal is one of the most important steps when starting your business because it determines the direction to follow and the plan to achieve it. It is the motor of your motivation and the answer to all your questions everytime you face a challenge (eg. if I do this will it help me to achieve my goal?). A business without a goal is a ship without a compass: you never know what it is at the end of the journey. Your goal should be as realistic and as specific as possible; defined in terms of time, priority, proffits, place and opportunities. Compare the two goals below:

1. " Become the major distribuitor of X product in Melbourne by 2009 and Australia in 2012 and be known as the best brand of x products"

2. "Distribute x products and get some revenue as well as be known as a good quality brand"

Which one is giving you more information to work with?, Which goal would indicate you what to do next or where to start from? This is the reason why a goal is so important to start any project you have in your life.

On the other hand, a plan is a set of steps, activities, strategies, risks, information, procedures and dates you need in order to achieve your goal. A business plan establishes where you are now and what obstacles, risks and opportunities you have in the process to achieve your goal. There are plenty of ways to develop a business plan, some of them more sophisticated than others but you basically need a document that contains the information to get started. You will find plenty of templates for Business plans. One that I have used and recommend is from ANZ bank, you can download it on http://www.anz.com/aus/promo/anzbusinessplan/default.asp. Alternatively you can use the guidelines to write a business plan from the business.gov.au website: http://www.business.gov.au

In summary, a business plan is a document that maps out all the structure of your business idea, the risks and resources. It will give you a wider vision to determine what to do, when and how to do it.

Following the formula presented before:

YOU(believer) + what you are good at and enjoy doing + ELABORATED BUSINES PLAN + RESOURCES + CUSTOMERS = BUSSINESS!

Resources for your business

During the development of your business plan, you should have come across a vital part of the project called resources. Resources are the tools you need to make the idea happen. This can be either the machines to manufacture a product, the warehouse to store your products, the people to manage the diverse areas of your business, the software and computers you will use…the list is endless and of course different from project to project, but it can be translated into a single word: MONEY.

If you want to make money you have to spend money. In order to complete the formula for a successful business, you need to make sure you have the right tools for the job. List down all the resources you need (make notes if they are available) and next to each resource write down its cost and when will it be required. Prioritize the resources using categories such as required, necessary or desired. This will give you a better understanding of what will you need, how much will it cost and when will you need it. Also by doing this you will know when to resign from your current job, if you need a loan and how much or if it is possible to minimize the cost of the resources by extending the deadlines for each project activity. If you have planed your business, understand the risks involved and have the right resources then it is time to create some revenue and in order to achieve this you need customers.

How do I get my customers?

During the development of your business plan you should have mapped out your target market, who they are, their age, characteristics and so forth. You have your sales figures based on your market research and it all looks very promising, but you have to use this market research information in order to generate sales.

At this stage all the great ideas are in your mind and unless you promote them you won't get anything out of them. In order to sell your product or services you need to tell the world you exist and what you do or sell. Advertise yourself in order to put the system you have designed and planned into work. Depending on the nature of your business, your strategy, your budget and your market you need to develop some sort of marketing campaign. But before you even think of promoting your business, you have to give it a name (brand) and that brand needs a corporate image:

Design your corporate image: This includes your logo and any slogan that help your customers differentiate you from your competition, makes it easy for them to remember you and describe what your business is and does. Your logo will most of the times incorporate the colours as well as the look and feel you will use for all your marketing material so make sure it is done right the first time.

Business cards and stationary: By the time you start promoting your business at trade fairs, exhibitions or reunions you will have to hand out some business cards and stationary. Make sure they look professional because that is the equivalent to your resume when you apply for a job. If the person you give your business card to doesn’t understand it or doesn’t find it professional you will lose a potential customer.

Once your corporate image has been sorted out, you will need some marketing material to promote your products and services. Some budget solutions include:

Brochures and catalogues: Make sure you have a professional catalogue displaying the products or services you offer. This can be a multi page catalogue to deliver to your potential customers or a single page flyer / postcard that you can just post mail to your clients. If your business is seasonal you will need to develop this type of brochures very often to keep your customers informed of what you are doing and when. (e.g. postcard for mother’s day).

Half page catalogue advert: If you are going to present your products at any trade fair, the event organization will probably develop a catalogue with adverts from all the stands at the trade fair. Make sure the design of your advert is attractive and eye catching and offer something to the visitors in order to encourage them to visit your stand.

Product photography: If your business sells products or your service has something to show, do it with professional photography. I know it is tempting and cheaper to take the photography of your products yourself but why risk it? If you are not a good photographer your will demerit the product appeal and your customer will not be attracted to it. Remember: a picture speaks more than a thousand words!

Website design: A website is a non expensive but very efficient solution to attract new customers, keep the existing ones informed of what you are doing and to improve the image of your company; just imagine: how did you get to this website? Don’t use that free email account on your business cards (i.e. you@hotmail.com,you@bigpond.com.au). Be consistent with your brand, get your own domain name (you@yourcompanyname.com.au) and show it off proudly to the world.

Packaging design: Although most of the time the product packaging ends up in the rubbish bin, it plays an important role in the purchase decision. The main purpose of the packaging is to protect the product, but when the product is displayed inside the packaging you just can’t rely on a functional packaging to sell the product; you need an attractive design too!

If you need any assistance to design your marketing material, I will be glad to help you. I offer attractive design packages that will assist promoting your business.

By using any of the above marketing materials and by providing a good quality product or service, your business will receive the benefits of reccomendations from your customers. Word of mouth is a very powerful tool so make sure you offer something that will make your customers come back or at least recommend you to someone else.

CONTINUOUS IMPROVEMENT:

During the implementation of your business and the first monts you will learn a lot about your products, services, the business, the market, your customers and so forth. Make sure you use this information to update your goals and identify new risks and opportunities you didn't see when you just started. The path to success relies entirely on your ability not only to start something but to keep it running and the only way to do this is by continuous improvement. Similar to any other job, if you just sit back and relax when you get the job you wanted, chances are someone else with higher expectations and goals will overtake you or even worse he/she might get your position!. Don't let this happen to your business, innovation is a must and the fuel that will keep it running.

FURTHER REFERENCE:

Refer to books, articles and a lawyer or accountant for legal advise before starting your business, don't expect to know everything because that is a big risk for you and your business. The more risks you eliminate the more prosperous your business will be.

I hope this article was useful for you, if you have some comments or tips on how to start your own business and want to share them to the world please post them with your name and email through the contact form and let me know if you want your name to appear next to the comment. Thank a lot and I wish you all the best on your business project.

YOUR PHILOSOPHY

"Success often comes to those who dare to act. It seldom goes to the timid who are ever afraid of the consequences."
Jawaharlal Nehru

"People rarely succeed unless they have fun in what they are doing."
Dale Carnegie

"Always bear in mind that our own resolution to succeed is more important than any other one thing."
Abraham Lincoln

"If you think you can, you can. And if you think you can’t, you’re right."
Henry Ford

"The secret of business is to know something that nobody else knows."
Aristotle Onansis

"Success is achieved by those who try and keep trying with a positive mental attitude."
W. Clement Stone

"Every achiever I have ever met says, 'My life turned around when I began to believe in me.'"
Robert Schuller

"People who are afraid to fail can never experience the joys of success."
Pete Zafra

Robert Schuller

"One of the most common causes of failure is the habit of quitting when one is overtaken by temporary defeat ."
Napoleon Hill