Businesses get started for one of two reasons. Lifestyle businesses are intended to give their owners a standard and way of living they would like to achieve. Some businesses are founded with the intention to grow into a significant entity, employing people and becoming a significant player in the market.
A popular route to starting up a business is on the back of redundancy. Lifestyle businesses are common and there is little intention of growing the business to need “outside the immediate family” help.
Whichever reason you start the business be prepared for a shock!
Now there is only you, just you. You have to do everything, from Accounts to Warehousing, from IT to Purchasing.
In a poll, sixty hours was the minimum working week, successful business owners’ work, with many reporting eighty or more.
Why start a business?
Some people will want to be wealthy as running your own business can be a good wealth generator.
Other people may wish to do a “good thing”. Plenty of businesses, before and since social enterprises were invented, have been started for social reasons. Profit is not the only motive.
Finally some are driven by a very personal reason. The desire to build something which is “my own” can be a powerful driver. The desire to show people just what you can do!
What skills are needed?
Businesses are skills embedded in a commercial wrapper. You may have a qualification in architectural design, a skill at producing designs and set up a design practice. That you are good at this technical skill is a given. You need to be good at the technical delivery process to succeed.
You will have to develop a unique selling proposition (USP) for your market segment. You need to fashion a reason that attracts customers to you and not your competitor. Competing on (lowest) price is not a good idea. Usually the incumbent in a market has deeper pockets than you and therefore the ability to run at a loss to drive competitors out of business.
Your skills must also match the market segment you hope to sell into. There is a difference between a hot dog stall and a Michelin starred restaurant. The difference is the expectation of the customers and the skills needed in the business.
What about the market?
Before you start a business you should determine who your competitors would be. You need to understand their USPs, their marketing approach and try to see any gaps in the market you can target.
You should be wary of markets which do not have any suppliers for your product or service (I’ll use product to mean product or service ). This could mean your dream is simply not needed in the market.
On the other hand you might just have a life changing idea that will be a spectacular success. I still struggle to understand why anyone would buy the first telephone!
To match your product to the market’s needs profitably is the remit of marketing. Some would consider Sales to be part of marketing but I will treat it separately.
Marketing is often described using the 7 Ps. They are:
• People • Process • Physical evidence. • Product • Price • Place • Promotion
I’ll be explaining the 7 Ps in the next blog