Starting your own business is difficult, there’s no getting around that. You’ve taken a large step by deciding to be your own boss, but you need to know what to expect, and plan accordingly. Here are some essential tips for starting your own business that will help you get off the ground.
Compile a Business Plan
A business plan is the first, most essential (and perhaps the most difficult) part of entrepreneurial planning. The plan will help you pave the road for your business’s success for the first 3 to 5 years, and will serve as the primary resource for requesting funding. You should include these essential sections:
- Executive summary: Because you’re still a new business, you’ll have to use this to touch on the most important parts of the other sections, also mentioning things like your experience in the field, as well as what led you to start your venture
- Company description: Describe what you plan to do, who your product or service serves and what sets you apart from competitors in your industry.
- Market analysis: Analyze the market you’ll be entering, touching on its outlook, its distinguishing characteristics, the size of your primary target market, as well as how much of a market share you might be able to gain. Also use this section as place to demonstrate your awareness of your competitors, and what window of opportunity they’ve left in the market.
- Management / Ownership: A business can be owned in a multitude of ways. This is a handy resource for determining what type of management structure would suit your company best, as well as how to present it best in your business plan.
- Product / Service line: Tell the “story” of your product or service. Describe what you’re selling and how it benefits your clients or customers and Explain what the product or service’s life cycle is.
- Marketing and sales: What is your marketing plan? In describing this, include details like what channels of distribution you plan to use, what your communication strategy is (how you plan to reach your customers) and a growth strategy detailing topics like whether you will be buying out other businesses or franchising your own.
- Financial Projections: Seeing as you don’t own an established business, you’ll only be including financial projections and not historical financial data. When it comes to your financial projections, you should include forecasted income statements, balance sheets, capital expenditure budgets and the like. Also make sure that they match your funding requests, as creditors will always be on the lookout for inconsistencies.
Financing your Business
Unless you happen to have all the capital you need to fund your ambitious business plan, you’ll need to have a plan for how the company will be financed. There are many options, like government back loans, research grants and venture capital that can help get the ball rolling.
Choosing your Location
The precise nature of your business will, to a large degree, decide where you’ll want your premises located. For entrepreneurs who are able to splash out on property, you’ll need to consider aspects like your brand image (do you want to be visually associated with the area you’re situated in?), the competition in the area, the proximity to suppliers, what the local labor market is, and whether there’s space for future expansion in the area. For those who are on a tighter budget, consider a lease-free office option. A few self-storage companies are offering office space solutions in converted storage units that are affordable, conveniently located, and without the need to lock in to restrictive lease terms.
Finally, before you can start trading, you’ll need to register a business name that you will “Trade As” or “Do Business As”. In South Africa, CIPC (Companies and Intellectual Property Commission) is the group to get in touch with to register your company’s name. You will also have to register for a tax number as well as income tax, PAYE and SITE with SARS. Registration for unemployment insurance is also needed. Here is a helpful resource with instructions, costs and time estimates for processing each step of the registration process.