26-06-2008
How to build a business in seven days
by Rosie Beasley
God supposedly built the world in seven days, so why not do the same with a business? Of course we know that the timescale is a bit unrealistic, but it would be fun to see if it can be done! You would naturally have to do some serious planning in advance, know your business idea inside out and then you’d really just end up with just the bare bones anyway. But at least you’d be off and running.
So here it is – go on, challenge yourself!
Day one – Market Research
Your first step should concentrate on research to see just how viable your idea is. If you don’t pull through day one with flying colours, go back to the drawing board and start again next week.
If your business idea is really going to work, it is important to find out what other people think about it, particularly the people whom you would like to buy your product or service. Firstly, examine your potential market – ask what are they buying now; what needs do they have? You should also look at what the competition is doing – think about how your idea fits with what is already out there in the market.
Next, you need to find out what people think. Identify your target market – decide what age group they are, which gender - are they mothers, fathers, business people, businesses, etc? Then put some information together and get out there and ask. Go up to people in the street, gather a group together at a local café, ask friends and family, phone up businesses.
Remember to take any criticism constructively – all feedback is useful – and don’t be too precious about your idea. Just because you are passionate about it doesn’t mean it’s a sure fire winner.
By the end of day one you should have an idea about whether your business is worth pursuing. If it is not, file it in the round filing cabinet and start again.
Day two - Business Plan
Every business needs a solid and comprehensive business plan. Aside from it being a necessity in order to secure certain types of funding, a business plan once complete will act as a guide throughout the first years of running your business.
Visit Business Link for a template and complete guide to the contents. Your plan should include a detailed description of your business idea, the business’s objectives, its target market, financial forecasts, cash flow forecasts, marketing and sales plans and overall strategy as a minimum. This is not a document to treat lightly - the success or failure of your business may well be dependent upon the comprehensiveness of this document.
"Clarity on these issues is particularly important if you're looking for finance or investment. The process of building your plan will also focus your mind on how your new business will need to operate to give it the best chance of success," said the Business Link website.
Day three - Finances/funding
When thinking about setting up your business you should have already had some idea about how you would fund it. Certainly creating a business plan serves to crystallise and cement your financial strategy, however actually securing the funding is another story altogether.
You need to have start-up funding to get your business off the ground, and then you also need to know what types of finance you will use to keep your business going. Your business plan should tell you how much start-up funding you need, so the next stage is to find it.
Many entrepreneurs these days decide against applying for a bank loan, preferring instead to find the money themselves. This is partly because business loans from banks are very difficult to secure in the planning stages and partly due to the credit crunch which is seeing all financial institutions tighten their belts and their lending criteria.
Consider these options for start-up finance and get them moving today:
• Your own savings
• Borrowing from family
• Investment from friends or associates
• Grants and start-up funding (see Business Link for more info)
• Credit cards
• Apply for a bank loan
• Apply for an overdraft on your business bank account
• Re-mortgaging or selling your property (with spousal permission!)
• Selling other assets – e.g. your car
Once your business is up and running it is important to keep your cash flow stable and your funding options open. Investigate these finance sources:
• Investors / business angels
• Invoice finance (used widely by businesses that offer credit terms to clients)
• Asset finance
• Bank overdraft
• Grants and government funding
Day four - Product development
Your initial business idea is unlikely to be exactly the same one that you launch your business with. It will have evolved based on the research you’ve done and further ideas that have come up during the planning process.
Today is the day to develop and finalise your product or service. If it is a product you are planning to sell, think about how you will get it produced, what packaging you will use, any improvements or modifications that could be made, any safety regulations that product must adhere to and ultimately how it might develop and expand in the future.
If your business is offering a service, think about the method of providing the service to customers, how to demonstrate the service to prospective customers, what exactly will be offered, who will provide it, how could it be improved and how could it evolve in the future.
Day five - Sales and marketing
Now that you have your final business offering and you know how you will finance it, the next stage is to tell people about it so you can start making money!
In your business plan you should have included a sales strategy. Sales is vitally important in making any business work but it must go hand in hand with marketing activities. Marketing will get you the leads and sales will bring in the cash.
How this works depends on the type of business you are starting. There are cheaper methods of marketing that you could work on first, such as listing your company with the various online directories. Yell.com is the most well known and you can get a listing in their printed book too.
Creating a website is a must in this day and age and can be done in a day, although considerable thought should go into what exactly you expect to get from it. For example you might be able to generate direct sales or if not then the purpose may be to get customers to call you up.
If you stick to a simple design to begin with (you can brand it fully later) and two or three key pages (home page, contact us & product page) then you can get up and running very quickly. The fastest way to send visitors to your site is to sign up for paid ads on a search engine, such as Google AdWords, which can get your ad visible on the same day.
Marketing can be a slow burner so don’t expect to see results instantly. However, it is possible to kick off your marketing campaign and get started on those all-important sales calls in one day.
"Getting your sales and marketing right is crucial to the success of your business. Creating a marketing strategy will help you identify potential customers and target them with appropriate products or services," said Business Link.
Day six – Premises, equipment & assets
Your business needs a base, and it also needs tools and/or equipment. This is where some of that lovely start-up capital comes into play.
Unless you’re launching a shop, surgery, restaurant, bar or hotel you can probably start out from home. You’ll need somewhere private and preferably separate from your living space to work. So if you don’t have an office or spare bedroom you’ll have to get creative. Ask your friends and family if they have any spare space you could use, or buy a weather-proof garden shed!
Most business owners need a computer as it is essential for accounting, administration and a plethora of other tasks. You may also need a printer, scanner, fax machine, photocopier, telephone, broadband internet connection and stationery. Remember what is suitable for home use may not be right for running a business so ask advice wherever possible.
If you’re a tradesman, tools can be expensive but are obviously necessary in order to do your job. Don’t skimp and buy bad quality items as these will not last as long and you’ll end up spending more money replacing or fixing them.
Day seven - Peace of mind
You should have now covered all the basics of setting up a business. There is just one more important task that will give you peace of mind – business insurance.
Even home-based businesses need insurance and there are tailored solutions for every kind of industry and specialism. You may need to consider Public Liability Insurance, Professional Indemnity Insurance, Employers' Liability Insurance, Business Contents Insurance, Tools & Equipment Cover and Commercial Vehicle Insurance.
If you’re working from home your domestic insurance may need to be altered. Get in touch with your home insurer to find out more.
But don’t worry - it’s easy to find the right insurance for your business. Just compare quotes with Simply Business and then buy your chosen policy online or by phone. There’s no fuss, no complicated paperwork and you can get covered in a matter of minutes.
Now you can start your business with the ultimate peace of mind. Because even God rested on the seventh day.
