Especially, since the recession, starting-up a business has become arguably even trickier than before. However, as Alan Sugar reminds us, the recession actually provides a great opportunity for ‘grass-roots’ small business plans. This article will detail how to start a franchise, and some of the most important considerations.
Idea, market research and business plan
The first, probably foremost, consideration in setting-up a new business is the idea. Firstly, the businessman or businesswoman in question must be passionate about their product/service (or at least be able to feign passion for it), and can succeed in the competitive world of business. Lack of passion is a common fault in the business-based TV show The Apprentice. Candidates are forced into a product/direction that they are not happy with, and cannot muster sufficient enthusiasm for.
This step is very closely linked to the idea as, in coming up with an idea, many will consider the popularity of rival products/services, and niches in the market. Once an idea is confirmed, it’s wise to undertake serious market research. This may well involve surveying people on their buying/selling behaviour in the area of the market in question, and their initial reaction to the prototype/sample item and/or proposed new business venture.
Dragon Theo Paphitis claims that not doing this is a common failing of many start-ups. He even claims that people many consider it cheating, when “stacking the cards in your favour” is a necessary part of business. One important consideration is to what extent the businessman/woman needs to identify the gap in the market and clientele. Then, they must build the business around that, or make a product/service and find the customer base and business after that.
Finances and selling
Finances The next consideration is often financing the business. Obviously, business will set out to be self-sustaining within a certain time-frame. However, in the likely absence of a pot of cash to fund initial growth, finance will need to be sought. This may come from new business loans from banks or loans, in return for equity from venture capitalists (as those who go into Dragon’s Den pitch for). There are also many tax forms to be filled out, especially if the businessman/woman will be self-employed. Get selling The normal next step is to get out there, and start selling. This should be done in accordance with the market research (demographics/areas are of vital importance) and, as aforementioned, it helps greatly if one has a genuine passion for the product. The businessman/woman may also want to employ people with similar business knowledge, and passion for the product.