Dr Emma Smith, a business expert at Cool Ventures, answers some of the most common questions from aspiring entrepreneurs.
Question: I’m considering starting a business, I think I’ve got a good idea…will it work?
First, check if running your own business is for you
Consider your reasons, goals and circumstances
What is it that attracts you about starting a business? Is it for example, just about a chance to earn money, or is it about following a passion or letting you have flexibility over when and where you work? How much time and energy do you have available to put into the project?
An idea that is potentially “good” for you personally, will deliver on at least some of the things you want to get out of your working environment and be manageable around your other existing life commitments.
Consider if you have the right skills, experience and qualifications
Reflect on whether you are sufficiently competent to go ahead. Paying customers will expect the product or service to be of commercial standard. Do you have the right skills, experience and qualifications? If not, you either need to train some more before starting up and/or bring someone else into the business who is sufficiently skilled.
Can you manage day-to-day running of your business?
If you start a business, you will also suddenly find yourself in charge of tasks like administration, customer service, marketing and book-keeping. You don’t necessarily need to learn how to do all of these things yourself as you can buy in help, however you have to manage multiple tasks simultaneously as a business owner on an ongoing basis. You also have to constantly self motivate without a boss telling you what to do. Some people absolutely thrive on all the variety and responsibilities, but it doesn’t suit everyone.
Secondly, check if your business idea is viable
If you decide running a business could be right for you, the next step is to check that the idea looks viable. There is always some risk involved in starting a business, no matter how small.
Check if there is demand for your products or services
Before investing significant time or money into the venture, do some basic market research. The business will fail if it doesn’t have enough customers, so check that what you are planning to sell is something that sufficient customers will be willing to buy.
Research what your potential customers really want out of products or services like yours, how often they want it, and what they are willing to pay. Also what it would cost you in time and money to deliver what they want. Can you compete against what other similar businesses are offering?
Make sure you can make money from your business
This brings us onto a very important consideration, which is whether the business will actually make any money! It is vital to check that you can in principle potentially make a profit with your idea, especially if you are planning to live off your business.
Try to identify one unit of whatever it is you plan to sell (whether it’s a product, or a block of your time) and work out:
- what you can sell the unit for, and the cost of delivering that one unit. How much profit does this make you per item?
- How long will it take you to deliver the sale you have just costed out. Is the amount of gross profit earned per hour acceptable?
- If so, how many units per unit time do you need to sell to cover your business running costs and living costs? Does that look achievable?
The basic mathematics has to work in your favour, or else the business won’t.
Your business idea must be legal
Finally, the idea must be legal in that you must be able to comply with any relevant business legislation or licensing requirements. This includes getting any necessary permissions to trade where you plan to trade, whether this is from home or elsewhere. You also must be able to fund or access the money needed to start the business. If your idea fits with all of these criteria, it may well be viable and is worth pursuing further.
Funded business support to help you start and grow
If you’d like to learn more, Cool Ventures run regular introductory Starting in Business webinars, where we explore these sorts of issues in more detail. They are free of charge if you are based in Bath & North East Somerset or South Gloucestershire.
The webinar covers:
- what it’s like to run a business
- how to tell if the idea could be right for you and whether it will work
- the next steps you can take to move your idea forward
- the further support and funding that may be available to you
Whilst it is helpful to have a specific business idea in mind to apply the concepts to, this is not necessary to benefit and those who are simply curious about starting a business or seeing whether self employment could be right for them are very welcome.
You can find out when the next Starting in Business webinar is here.
If after attending you decide to progress your ideas, there is a Business Start Up Program available, as well as 121 business support clinics for those close to starting to trade or recently started.
People local to Bath & North East Somerset, Bristol or South Gloucestershire who are on benefits, or who are working but on low pay, may also be eligible for additional support with developing their new career from Futurebright, a program which offers free coaching and support, see: