Turning an Idea to a Small Business

Working a nine to five, five days a week job can be tiring sometimes.  Especially if you feel that you are stuck in a dead end job.  It is during these times of reflection that you start to wish you have your own business and you are your own boss.  But how does one go about starting a business?  Everything actually starts from a small idea and following through with that idea.  The following is the first process in molding a creation of small business:

1- Write an initial informal business plan.  This informal business plan will consist of jotting down questions that you have for yourself and answering them afterwards.  If you do not know what kind of business you want to venture into, this exercise may help you discover your genre. 

2- You must ask yourself what kind of things are you passionate about.  What activities you enjoy most.  Almost all business owners love what they do that is why they are successful in their chosen field. 

3- Everyone is talented in their own way.  Think about your unique set of abilities and how you can apply them in a small business setting.  Add your experiences and other knowledge into it as well and see what you would come up with.  Whether what you are thinking is plausible or not.

4- When your ideas are starting to form, also write down any additional trainings or education that you might need in relation to the preparation for them. 

5- At this point, you have the information that you need to think about what kind of services or products you can offer.  The market industry that you will venture into will also start to form in your informal business plan.  Weigh out the pros and cons of providing a new service or product against adapting an existing one and making a better version.  You have to keep in mind what qualities and experience you have that qualifies you to offer such product and services. 

6- When you have consider the products and services for your small business, the next question to ask is, is there a need or demand for them.  Most of the small business that does not succeed is that there really is no demand for the product and therefore no market for it.  You have to make sure that the products or services that you consider is what consumers need or would want to buy.

7- Knowing your competition is imperative in the business world.  You need to know the kind of market you are venturing into and the share of the market that could potentially be yours.  You need to research the turnover of new businesses in that market as well.

8- By knowing your competition, you can then formulate ways to make your products and services better.  You have the advantage of knowing what your competitors lacks, giving you the opportunity to come up with a better quality service or product.

Once you have written down the above, your ideas for a small business will start to form.  By now you will have a better understanding of the products or services that you want to offer and the target market you want to venture into.  Getting to the specifics of the plan is your next step:

• What kind of business will it be?  Will it be a sole proprietorship business or do you plan to have partners in the business.  You must familiarize yourself with the legal structure of your business and the requirements you need.  Will you need to have employees at the start of the business or can you work alone to provide the products and services that you will offer?

• For your small business, location is a very important thing.  Are you planning to have a home-based business? If so, do you have enough space at home?  Will you need a formal office to meet clients and customers?
  •  Resources play a very big thing when starting a small business.  How much money do you have that you can invest in this business?  If additional funding is required, do you have families and friends that would be interested and willing to help you out?  If you are looking into partnership, what role would they play in the business and how much would they need to invest?
  • If you do not have enough resources then you will need to look into financing.  By now, you have an initial idea of how much your business will need in order to start it.  However, you must forecast how much more you need in relation to working capital and other costs and expenses.  You will need to project the expenses of your business until it starts to generate profits and be self sufficient in running on its own.  You have then to research where the additional funding will come from.
  • You have to be aware of the statutory and regulatory requirements of your would be business.  It will be beneficial for you to be ready about them before you start you business.

This is the time that after you have finished with your informal business plans to make a formal first draft and put everything together.  Make your business plan as objective as possible with justification for everything so that potential investors and lenders will have no trouble in understanding it.

• Description of your business in the first section of your business plan is important.  Here you must state your goals and the mission of your business.  You must go through the specifics here about your products or services and the development phase of your business. 

• The Marketing section of your business plan must state the target market of your business.  Describe in detail the niche market if that is what you have and other market studies that you have made.  Get into the specifics of your marketing strategies and how you plan to reach out to your potential clients or customers.

• Financials – This section is probably the most important section for potential investors or lenders. You must indicate here the resources you already have and the resources you will need.  You must state the budget for operational costs and other expenditure that your business will incur.  The financial projection for your business is what this section is all about.

• Management of your business – this section focuses on the management of your business and the people that will be involved.  You will need to specify the job responsibilities and duties of each one and it is wise to attach resumes of the people you are thinking of coming on board. 

The first business draft you do is not the final business plan. Go over it again and review and make necessary changes as you see fit.  This is just a starting point.  As new information comes along, add them and revise your business plan to make a better and stronger one.  Make sure to cover all areas.  It will be a very valuable tool once you start your business.