So you want to go into business?

One of the biggest changes to the business world over recent years has been the trend to run your own business.

This decision is often a result of disillusionment with the employment market or with the desire to ‘be your own boss’.

Whilst these might seem to be valid reasons for going into business, it is a fact that many businesses fail for the simple reason that the person in question shouldn’t have started it in the first place, and business failure tends to cost a lot more than simply losing your job.

The first step.

The first step in running your own business involves taking a good hard look at yourself, ask yourself the following questions:

Are you a hard worker?

Will you be prepared to work for up to maybe 70 hours a week for minimal pay? Profits are often ploughed back in the business so a regular wage is not guaranteed. Annual leave and sick leave will become luxury.  It is also important that your health is good.

Do you have experience in the industry?

A new business will rely heavily on your own skills. Too often we hear of people going into an industry without having a clear understanding of how it works or what exactly is involved. It is equally important to possess general business skills.

Can you afford to finance the start-up?

You will need funds to cover all the costs of establishing the business, and probably your living expenses as well for at least a short time. Are you ready to risk your house or other assets as loan collateral? Despite what the banks would have you believe, borrowing money to start a business is not easy.

Will you family support your endeavours?

Can you count on your loved ones to support you when you are exhausted, cranky, away from home all the time or in dire straits?

Can you manage the business?

Besides being a good mechanic, engineer or whatever, you will need skills in bookkeeping, marketing, human resources, budgeting, and public relations and so on.

Planning to succeed

Planning is the key to success, which is not to say that some people don’t get lucky; it’s just that planning will increase your chances of survival. And for many small businesses, survival is the overriding objective.

Planning encompasses many aspects of business. Your chosen product of service must be viable, and have the capacity to generate income. Do your homework. Who will your customers be? How much will they be prepared to pay for your product or service? Consideration must be given to location, competition, government and council regulations, staffing, equipment etc.

A business plan is therefore a critical tool in firstly getting started, and then growing your business, if you don’t know where you are going it’s very unlikely that you will ever get there.

The team at Altitude Advisory can assist you in many of these key areas – contact us today.