Starting your own business is exciting, naturally there will be worries and concerns at the same time about whether you are doing the right thing. This is completely natural as you will want to make sure that to the best of your abilities that your new business will be a success and give you the rewards that you want to achieve.
Although there is no guarantee that you will be successful in your new venture, you can do many things that will give your business idea the greatest opportunity of the business success that you desire. There are 3 things that you can do:
1. Make sure that your business idea is well thought out by writing a business plan with your Business Advisor.
2. Work out how much you need to survive and does the business make financial sense by preparing a financial forecast with your Business Advisor.
3. Engage a competent, well-qualified Business Advisor who will work with you and challenge your ideas to ensure that they are robust and well thought through.
If you're wanting to work with an experienced and well qualified Business Advisor to get your business idea off the ground, we'd love you to get in touch.
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1. Work in stages
The forecast spreadsheet contains 6 tabs which can feel overwhelming at first, so it’s a good idea to break it down into chunks.
Start with the Personal Survival Budget which is about your personal expenses and how much you need to maintain your current lifestyle. Then move onto the sales forecast, thinking only about the income your business will generate. And finally, complete the cashflow forecast tab and expenses you will incur. The forecast template also enables you to enter sales and expenses for your second year of trading.
2. Consider seasonal variations
When completing the sales forecast, plot out the different months of the year and consider how events and customer behaviour at different times of the year may affect your sales. For example, retailers may find that the run up to Christmas is the busiest time of the year but for garden maintenance businesses December may be one of the quietest months.
3. Think about your average sales prices
If you have a lot of different products or services then it won’t be possible to list every separate item in your sales forecast. Instead you could consider what your average customer will spend and use that for your forecasts, or take it a step further and identify groups of customers such as high spend, medium spend and low spend.
4. Don’t forget the small expenses
When thinking through your business expenses it is easy to think about the big costs you incur such as rent, equipment, stock or marketing. While these expenses have the largest impact on your cashflow remember to also include the expenses that come around month after month and are easily overlooked – things like stationery, postage, credit card processing costs and online software subscriptions.
5. Calculate your breakeven sales from your expenses
Figuring out your sales before you’ve started your business can be tricky. One solution is to start with your monthly expenses, then work backwards to figure out how many units you need to sell to cover those expenses. This will give you a basic breakeven point from which you can work on your sales forecasts further.
You will need a programme which can open Microsoft Word and Microsoft Excel files to view and complete these documents. If you do not have this software please let me know and I will be able to provide the documents in an alternate format.
If you have any trouble with the links please Contact Us and we will be happy to send them to you as an email attachment
1. Work through one section at a time
The template document is broken down into six sections which each cover a different aspect of your business. Aim to work through these sections one at a time, tackling each question individually. Begin with the foundations and build up the rest of your plan from there.
2. Use the prompts
Many of the questions have prompts to help you with your thinking and break down the question further. Use these prompts to answer as fully as possible. It can also be worth adopting the mindset of “If somebody was asking me to loan them money, what would I want to know in order to have confidence in their idea?” The Business Idea document is as much about you carefully considering how you will go about setting up your business, as it is about demonstrating that your idea is good to your Business Advisor.
3. Put yourself in the readers shoes
While your business idea may make total sense in your head you are aiming to explain to other people, including your Business Advisor, why it can be successful. This means making sure that you spell things out as clearly as possible. A good way to think of it is to assume that the person reading your Business Idea document knows absolutely nothing about you, your business or your industry (which is often the case anyway) and therefore needs to understand as much as possible about what you are aiming to do.
4. Provide evidence to support the things you’ve written
Being able to back up the things written in your Business Idea document will help validate of your idea as well as give confidence to the reader. Examples might be emails from potential customers saying they are interested, copies of market research you have done, certificates for relevant qualifications or training courses and quotes for the things you need to start your business. If you are already trading then providing evidence to show what you’ve done so far can be invaluable.
5. Your first draft doesn’t have to be the finished article
Nobody expects that the first draft of your Business Idea document is going to be perfect and your Business Starts Business Advisor is on hand to help get things into shape. Don’t agonise about getting every single detail and scenario in there, aim to write down your current plans and then take on-board the feedback from our Business Advisor. The process of thinking through the questions and feedback will stand you in good stead for understanding the most crucial aspects of your business in future.