Planning a Business – Part 1

Introduction

There are 4 basic stages of business development, but each of these stages have smaller stages, and even smaller again that can also be broken down still further. In this blog post, I will explore the steps required to bring your business from dream to reality.

 

This does not guarantee success

 

A word of warning before embarking on any business – 20% of all businesses that fail, fail within the first 12 months.

The four stages

I have defined the four stages as

  • Concept
  • Research
  • Gathering
  • Launch

Concept

 

The CONCEPT stage of the business is where you get an idea for a business. What kind of business will you operate? This may depend on your skills, desires and what you see will fill a hole in the market or industry.

  • Is the business a viable option?
  • What do you want to achieve?

If you’re wanting to start your own business, so you can work from home and earn $1000’s of dollars a day for doing nothing. This is not likely to happen, although I am sure there are plenty of get rich quick schemes on the internet, most of them don’t work – or they work for the person who originally came up with the idea.

Look at your skills – what are you good at, what areas do you need to improve on? If you have a specific idea for a business, such as wanting to open your own restaurant – are you good at cooking, do you have experience in the industry?

This is called doing a SWOT Analysis

 

Strengths

What are you good at?

What do you like to do?

Weakness

What things don’t you like doing?

What areas or skills can or should you improve?

Opportunities

What opportunities are there in your local area for you in this business venture?

What sort of things could you do?

Threats

What is stopping you from achieving your dreams?

 

You may also have noticed that the top two items on this table, the strengths and weaknesses are looking internally at yourself while the bottom items on the table are looking externally.

Make some notes below

  1. What is your business idea?
  2. What skills will you need for the business
  3. What do you want to achieve in starting this business?

 

Do a SWOT analysis on yourself.

 

Goals of starting

You may have several concept ideas for a business, consider a starting point for the business. Consider three different alternatives to the business.

  1. What is the minimum starting point for entry?
  2. What is a medium starting point?
  3. What is the largest starting point?

 

Consider – does the business you envision already exist? Not necessarily locally, it may exist in another town, region or even country. Does it not exist at all – and why?

If the business does exist, what are the demographics of that business? Is it local? In an area of a similar size to your location or intended location?

  • Can you buy the business?
  • Is it available as a franchise?
  • Do you need to start from scratch?

What problem will your business solve?

Business’ exist to either sell products or services – or both. These products or services are designed to solve the customer’s problems – do they need it?

If you are selling services such as counselling, remember the “value” is what they place on what you are saving them from. EG a Divorce Counselor is saving marriages. They are not paying you for your time as such but for the perceived value of what you can give or help them.

 

Make a note below.

My business will sell products or services. Or I will provide both.

My business will solve the problem of _________________

 

Define the concept

By making a few decisions and writing down what you wish to achieve with your business you are defining the concept of the business. By the completion of stage 1, you should know

  • What your business will do
  • What products or services it will provide
  • Do you need to purchase an existing business, a franchise or set up business from scratch?

 

You may also be able to set yourself a starting point for your business, this will help with planning and research.

 

Case Study

Aaron wants to set up his own computer repair business. He investigates his business model and decides he wants to focus on two specific areas of the business

  • Sales
  • Servicing

He defines his options as

  1. Start from home, build a shed or convert a room of his home into a display centre and then expand to retail at a later date.
  2. Get a loan and take over retail premises
  3. Get a group of investors together and purchase a franchise to set up in the local business district

Aaron has recently completed a certificate in technology, so has the skills needed to start working in the industry.

This is an excerpt from our Blogging 4 Business course

Next: Part 2 Research

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