I always wanted to start my own business, but I was never sure what to do. I’d often get frustrated that I couldn’t come up with a “big idea”. I’d go along to franchise fairs and even signed up for a government sponsored programme which aimed to match people with ideas to those with money and others with relevant skills. I had no ideas, not much money, but I was an accountant so I thought I had some relevant skills!
What I have since learned after starting a business, is that there are so many opportunities. You just need to open your eyes. I’ve got more ideas now than I can spend time on. Also, you can start and run a successful business without a “big idea” unless you want to be the new Elon Musk or Mark Zuckerberg.
What are you passionate about?
What do you love doing? What gives you a zest for life? What would you do, even if you weren’t getting paid?
If there is an activity or hobby that springs to mind, then why not look at whether you can make it a business. It doesn’t have to replace your full time income from day 1. Think about starting it part time or as a side hussle.
If you’ve got a passion why not follow it – you probably already know more than a novice, so to them you are an expert!
OK, so now let’s think of some of the practicalities. Are you prepared for your hobby and passion to turn into a job? Say you love fitness and sport. You could take some courses and become a personal trainer. That sounds great, but wait a minute, you won’t be the one training all day. You might be joining in, but you need to look after your client. You’ll also need to do what’s right for them, not what you like doing.
You might love cooking. So open a cafe or restraurant. Hang on though, cooking for 40 people day in day out is a bit different from rustling up a lovely Sunday lunch for friends and family.
I’m not trying to put you off – just go into it with your eyes open.
What if I don’t have a passion?
What do you like to do? Some of the reasons you are likely to be looking at starting your own business are to give you more control over your own destiny and to work on something that you are more enthused about than your current job. Just be careful that you don’t rush into starting an enterprise just for the sake of it, and then later realising that it was out of the frying pan and into the fire.
Why not write out a couple of lists:-
1. What are my skills? This should cover both outside work as well as work. You might be the one in your circle of friends that always organises the night out, but you don’t work in a job that lets you use your organisational skills. You might be great with the public from your days of working in a bar as a student, but don’t work in a job that has public facing aspects.
2. Who do I know? Think of family, friends, work colleagues, even Jim from football or Sue from the parent’s association. You may be amazed at what knowledge is held in your group of contacts. Some might run their own business, some may be able to offer advice on starting up.
Now look at your lists. Are there any business ideas bubbling up?
If you need a bit more inspiration, reflect on businesses where you think they could have been better. Do you have any examples of goods or services where your impression is “it’s good, but wouldn’t it be really great if it could ????”. If you solve your own frustrations or problems then the chances are that you will also be solving someone elses.
Still not coming up with anything? Why not take a look at the British Franchise Association website? Franchising might be an option for you, but even if it isn’t, the list of businesses that are available to franchise may spark some ideas of what you could do.
If you’ve got an idea – great. If you’ve got more than one – brilliant! Let’s look at how to pick the best one.
Choosing what to do
If you are really set on doing something, don’t let the naysayers put you off. Don’t get me wrong, some ideas may not turn into a business that allows you to give up work and go out on your own full-time. They could be great ideas, or products, but just don’t generate enough demand. For others, establishing something a bit different in a local market may be enough for the business to flourish. Just offering some different options or more flexibility from other businesses in the same sector may be enough to set you apart.
Below are some other aspects to consider.
How much money do you have available to invest? This could be personal savings, or borrowings. If you’re going at it full time from day 1, then you will need some money to support yourself, over and above the cash that you need to invest in your business.
Some businesses will require more money to get going than others. For instance, businesses requiring premises may have some up front fit out costs, rent deposits, installation costs for internet and telephone lines, etc.
Are you going to have a product business or service business? Product businesses may need investment in stock, unless it is being manufactured to order. As a new start, don’t be surprised if you are asked for payment up front. Once you have a track record of payments and orders, your suppliers are more likely to give you credit terms. Some service businesses are less capital intensive, but you may still need to buy tools or equipment, or a vehicle.
What you are going to sell? Seem like a daft question? What I mean is get down to the granular level. Whatever you are planning to sell, take your sales target and break it down into the number of hours, boxes, widgets, service plans (whatever you are planning to sell). Looking at the number of items you have to sell gives a sense check on how realistic your sales number is. Seeing what that means in terms of units gives a better sense of the task in hand.
Think about the profit that you can make on each unit. What is the cost to deliver the service or product. The smaller the percentage of cost versus sales, the higher your margin. The higher the margin, the less you have to sell to cover your fixed costs and the money you want to earn. This isn’t an accountancy lesson, but thinking about the margin can be a guide to how hard you are going to have to work. If you have higher margin products or services, you need to sell less of them to make the same profit (assuming your fixed costs are the same), but of course they may be harder to sell or have a longer sales leadtime. Think bacon buttie against Michelin starred tenderloin of beef with a red wine reduction. You might be able to knock out dozens of bacon butties in the time of one Michelin main course, but the margin is likely to be very different.
And what’s your market? If you have a takeaway van in the local industrial estate, your customer base probably isn’t looking for tenderloin of beef. They want a fast and tasty breakfast roll. Not a lengthy meal served as part of an all round “experience”.
Does your chosen business have any barriers to entry? For instance, a pub needs a personal licence holder. There may be local or national laws or regulations that you need to comply with. Barriers to entry can be good – in that they can reduce competition but also may create more upfront cost.
It’s worth considering who your customers are going to be. Where are they based? Why should they buy from you rather than your competitors? What do they look like – are they young / old; will they buy in person / online; are they private individuals / other companies; are they single / married / with partner?
Don’t be afraid to take some time on the above. Make a decision after considering the pros and cons of each option , or if you are going on gut feel, you’ll have a better idea of the challenges that might present themselves.
If you’re thinking of starting a digital business, take a look at the training I’ve gone through.