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Whatever the aims or reasons for setting up your business, two essential elements that you’ll require are a good business idea and a carefully worked out business plan. You can’t jump in head first on the basis of a spur-of-the-moment notion or idea – it takes research and planning to turn your idea into a money-making reality. An inspired thought or creative idea is the perfect starting point for setting up your own business, but of course you need to develop it into something a great deal more substantial before you take it any further. Just an idea isn’t enough – there needs to be a market for your product or service. It’s got to be something that people will need or want. To find out whether your idea has the potential to develop into a successful business, you’ll need to do some investigation into your intended market and any competitors in the same field – in other words, market research. Some useful questions to ask yourself about your business proposition are: • What makes your product or service different – does it have a unique selling point to make it better than anything else on the market? • Is there a demand for your product or service? • Will your product or service fill a gap in the market or will it provide significant improvements upon existing products or services? • Do you have potential customers, and if so, who are they – what are their needs and wants? • How will you attract and retain business? • Who are your competitors? • How do they operate? • What makes their product or service marketable? • What could you provide that your competitors don’t or can’t provide? • What’s the history of the industry – how has it developed, have there been any previous issues or incidents in the field, and what has been successful and unsuccessful in the past? • Are there any regulations or legal issues relating to the industry or the product or service you want to sell? Sometimes the best way to develop ideas and understand all the various perspectives and issues relating to them is to enlist the help of others. A group brainstorming session is an excellent method of analysis. You could also hold focus groups with members of the public or simply ask your friends or colleagues informally what they think of your idea. Alternatively, funds permitting, you could enlist the services of a market research agency. Also, the Internet is an invaluable resource for finding out company information. Read up on how your competitors have fared by looking at their websites for annual reports etc, and search the archives of trusted news and current affairs websites such as the BBC, the Financial Times or the Guardian. Of course all of this analysis won’t just help you understand the market and the industry – it will also give you a deeper understanding of what you are trying to achieve as a business. One of the reasons why many businesses fail is that they do not have a clear vision or understanding of their product or service or what they are trying to do with it. If you don’t know what you do, how will your customers know? And how will you market and manage your business if you don’t have a clear idea of its purpose? All of what we’ve looked at so far is theory. A good idea is all very well, but it has to translate into a working product or service, which means developing a prototype that can be put into practice and tested thoroughly. You’ll need funds to do this. Advice on raising finance can be found in the last chapter of this section. If you’re struggling to come up with a creative idea for your business, don’t be put off. You don’t need to have an inspiring and original concept for your business to work. It’s very difficult to come up with something that’s never been done before, and even more difficult to make it succeed if it’s without precedent. So don’t be put off if your idea isn’t brand new – sometimes setting up in a well established field is best. However, you still need to have something to set your company apart from the others – your business needs a strong identity of its own. What will make customers choose you over your competitors? You could of course distinguish yourself on the basis of price alone, but this is unlikely to be profitable. Price won’t always influence customer decisions – they’re more likely to be looking for good value and excellent service for what they pay. Think about additional or enhanced features or benefits of your product or service, such as quality, reliability, maintenance, support, performance, promptness or speed. Finally, if you are daunted by the prospect of setting up completely from scratch and aren’t confident that you have a business idea you can turn into something profitable, a possible alternative is to consider setting up a franchise of a larger company or buying an established business. However, this also needs to be thought through carefully. You won’t have complete freedom and control over your business if you set up a franchise and it may restrict your earnings potential. And if you are considering taking over an existing business, you’ll need to research and understand it thoroughly to ensure that it’s viable. Why is it being sold, for example? Has it been successful? How would you take the business forward? Who are the customers and what makes them use the product or service? This article is copyright protected and is not for republishing
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