By K. Moodley (Dir.)
How to Start a Business – Part 1
When we won the FIFA tender 5 years ago, I vivdly remember the entrepreneurial buzz. There was talk of business ideas, and of supplementary income, from letting homes to tourists, and catering ideas, to setting up full businesses from entertainment to memorabilia. It’s wonderful to see that in 2010 much has come to fruition. One thing is certain, the spirit of business is here to stay – so we had all better get clued up on how to start a business.
Let’s go back to the very beginning.
Opportunity ideas do not lie around waiting to be discovered. Such ideas need to be produced – Edward de Bono
Finding a new business idea
If you have not got one yet, you first need a business idea, which could be based on:
- Your work experience;
- Discussing ideas with friends/family or people in business;
- Networking with creative & successful entrepreneurs;
- Stay in touch with market needs and trends by reading the newspaper, watching the news or reading published information on a particular business area;
- Use your hobbies and creative talent as an idea starting point;
- Attend forums, conventions, conferences and training sessions.
Whatever you do, be sure that there is a real need, and that not just a perceived need. In other words, don’t base a business on a need you created in your head that other people don’t t see as a need.
Testing the business Idea
When you have found an idea you should ask a few questions to check if the idea will work.
Three important questions are:
1. Does it meet a need?
Your business idea must meet a real and specific need. A successful business provides customers with a product and service that is good value and provides satisfaction. Good value is usually seen as a combination of quality, quick service/response and the right price. A business that promptly delivers a service/product at a reasonable price compared to its competitors has competitive advantage.
2. Is there a potential market?
The feasibility of your ideas should ideally be tested with market surveys, even if these are informal.
3. Will the business be financially viable?
A successful business is able to provide customers with a product and service that is seen as good value and provides satisfaction. Good value is usually seen as a combination of quality, quick service/response and the right price. Customers often look for good quality products and services that are delivered promptly at a good price. A business that promptly delivers a service/product at a reasonable price compared to its competitors has competitive advantage.
4. What will it cost to run this business?
These are costs related to the day-to-day running of the business and include rent, wages, electricity, loan repayments and other expenses.
There are two types of running costs, fixed costs and variable costs. Fixed costs are not determined by the volume produced or the type of service provided. For example, a mechanic will pay a fixed rent every month irrespective of the number of cars he repairs. Variable costs (costs that change) depend on the volume produced or the type of service provided. It includes costs which vary from one job to another. For example, an electrician installing a new wiring system in a hotel will spend more than when installing a new wiring system in a small house.
Once you have answered these questions, and are sure you have a good idea, it’s time for the planning production, marketing, day-today management and the financial management of your business. And when your business is finally launched, the real work begins! You have to work hard, work smart, and monitor every aspect of your business. And while doing all this remember to stay positive, and persevere to make it happen!
The greatest ability in business is to get along with others and to influence their actions – John Hancock