|
|
|
Start Your Business
To start a business the following characteristics will be essential in sustaining and growing a successful enterprise:
-
Dedication
-
Determination
-
Self confidence
-
Goal Driven
-
Practical risk evaluation
-
Receptive to suggestions and critical analysis
-
Prepared to tackle challenges
-
Good communication and interpersonal ability
About preparing for business
In order to optimise the likelihood of success and longevity in an enterprise, one needs to research and strategise thoroughly to cover all aspects of its activity before it becomes an operational reality.
-
What will you require to start the business? Evaluate the tools you need to provide/manufacture your product, market it, package it, distribute it etc.
-
Who are your target clientele? Evaluate market viability as per local socio-economic trends and associated demand. Establish a suitable market to sell your goods/services.
-
Establish a source of capital and financial provision to start your business.
-
Examine the prospects of cash-flow in detail, profit margins and a timescale
-
Ensure to keep on top of loans/repayments and to organise that finances are available to meet these commitment when required.
Make doubly sure that absolutely every aspect of operation of your business is adequately evaluated. A major factor in the failure of entrepreneurial start-up businesses is that critical omissions are made in the planning stages which leads to the eventual demise of what could have been a healthy, burgeoning success. Write a business plan, do it yourself. If you get outside assistance with any element of it, make sure you understand every word and figure used, there is nothing worse than being asked a question about your future business and not having the answer you should have.
Planning
So, you now have created the kernel of a new innovation and are ready to make it into a successful business. What is required next is that you formulate a formal business plan. The length of this plan is totally unrestricted in length, 5-500 pages, it's up to you.
Cover Page.
This is the opening page of your plan it comprises all the fundamental details about the proposed business such as the company name, proprietor, address, contact numbers and/or email/web address etc.
Index Page.
The index page is where you categorise and detail the content of your document with headings and subsections etc. and their corresponding page numbers.
Executive Summary.
The first page of the plan to be read, this should be the last page to be written. This section is where you summarise the operation and idea of your business. Use this section to "sell" your enterprise and make an effort to present your innovation in the most enticing way to any reader.
The Promoters.
Names/addresses/contact numbers, for each person responsible for starting the business and their respective credentials eg. education/knowledge/skills/experience that are relevant to the project.
The Project.
Explain to the reader in simple and clear terms what exactly the proposed business project is. Describe it in detail and convey clearly what exactly is/are the products/services you will be bringing to the market. Outline the processes and activities that take place to manufacture and/or ensure the provision of the service being marketed. Ensure that the listed legal status of the business is documented eg. sole trader, Plc., Ltd., Inc. etc. Document the administrative attributes of the business such as employment, management, property ownership etc. State where the business is to be located, list the premises and/or manufacturing space/retail unit etc. where the enterprise itself will be based. Elucidate exacly, the required components for the formation and running of your business; eg. skills, raw materials, processing applications, equipment capital expenditure and ongoing maintenance/running costs of such technology. Detail the Quality Standards the business intends to adhere to during operation. Discuss all aspects of fiscal regulation, such as; pricing, incomings/outgoings, cashflow, credit control (loans) etc. Give an account of all professional consultants and service providers utilised in establishing the business, eg. accountants, solicitors, financial analysts etc.
Further Planning
Your Market
Categorise specifically the market or niche you wish to target in providing your product or service. Give an account of the projected clientele, eg. socio-economic group, idiosyncratic attributes, spending patterns, favoured product trends etc. Consider your position in relation to competitors, what is it that you can do/provide that will surpass any similar competing entities. Account for the methodology of distributution and the quantification of related logistical procedures if necessary. Formulate a marketing policy, to include specific methods of promotion and sales strategies.
Financial Considerations
Consider and accurately evaluate all capital expenditure costs on commencement. Err on the side of caution, overestimation is preferable to the opposite! Categorise all financial expediture costs for the day-to-day operation of the business, such as machinery/service costs (eg. electrical/heat consumption), staff salary, outgoings etc.
Carefully detail the creditors and sources of funding/capital provision that are definitely acquired, (ie. don't presume an institution will provide a loan, ensure that before the incorporation of funds into a budget, the resources are actually available).
Construct a realistic cash-flow budget organised on a per month basis (incomings/outgoings, projected credit or debit...). 3rd party assistance with a financial plan and budgeting evaluation may be desired to ensure a comprehensive evaluation. Whatever way you go about it, make sure you thoroughly understand it.
Appendices.
A section of the document where you give an account of the source(s) of information you have referred to in other sections of the plan, e.g. brochures, premises specifications and alteration quotations, technological expediture, financial projection, correspondence, market research report, customer contact and response, competitor profiles.
Conclusion of plan
The business plan of your idea is the compilation of all the fundamental criteria that need to be fulfilled in order to succesfully initiate trading activity and sustain it as time progresses. It is a forum through which you express your objectives and the associated methodology through which you will actively strive to realise such ambitions. It should be a structured and thought out guide as you promulgate and propagate your burgeoning industry. This plan should be consulted and/or altered as issues arise or shifts in market characteristics occur to ensure you are on track. Such a plan should be dynamic and fluid on a continuous basis, changes and alterations/updates should be made as appropriate. The business plan's first and foremost function is to assist you. Externally, the business plan is there to hopefully attract promoters and financiers on board, thus the plan should be comprehensive and convincing in its structure for one to succesfully entice important individuals/entities on board (eg. financial credit from a bank/institution, grants from government, corporate sponsorship/interest and even just to persuade customers that your business is worthwhile and viable. Confidence + satisfaction = sales!).
Taxation Information
Depending on the type of business structure you intend using the following are the types of taxes you may encounter;
Sole Trader & Partnership
If your business is legally listed as either of the above the following taxes will be liable during operation
Income tax.
VAT
PAYE / PRSI - for your employees only, not the promoter(s).
Private Limited Company
Corporation tax
VAT
PAYE / PRSI For your employees and you as a director of the company.
For more information on corporation taxation liabilities and mandatory tax obligations in business, consult Revenue Online for a comprehensive view of all governmental taxation and fiscal policies.
Cashflow
Cashflow is the flow of money into and out of your business. Rigid management of this aspect of the business is crucially important in order to stay out of trouble financially, ensuring that money is available for transfer when commitments are due to be paid. A critical point to remember is that cashflow is completely independent of profit and should be treated in such a clearly segregated manner, profitable businesses can and do fail because of lack of attention to cashflow (in fact it is estimated more businesses fail because of cashflow difficulties than for any other reason).
Typical cashflow problems can include:
- Underestimating the true magnitude of capital and funding required
- Miscalculating overheads and related expenditure on a pro rata basis
- Erroneous calculation of required salary that should be drawn, both personally and for any staff employed
- Over-optimistic sales estimations
- Underestimation of expenditure for required stock
- Underestimating credit terms to customers
- Erroneously overstating financial credit agreements with suppliers
- Overtrading i.e. undertaking more sales than your business can realistically finance and process
- Inefficient work scheduling (ie. lack of productivity)
- Insufficient attention to tax and financial repayment obligation deadlines
- Failure to allow room for a factor of flexibility due to market fluctuation, seasonal inequalities. and to compensate accordingly
- Overstocking of materials and/or other stock
- Excessive production of stock at a time when demand is low
|
Credit Control Management
If in the course of your business activity, you give credit eg. during the time a service is in the course of being provided - or for a period after the sale of product(s) or service(s), then you need to consider a Credit Control Management strategy. For example:
- Is the sale by credit wholly necessary? Can it be conducted without the credit risks?
- A policy of carrying out credit history checks on customers for whom credit provision is proposed
- State clearly and document on paper at quotation/pre commencement stage what payment and credit terms apply. Make a well defined copy of this agreement and file it carefully
- Can you minimise your credit exposure by use of deposit payment or a stage payment system?
- Establish clearly what payment terms are stated in the debtors/customers purchase order
- Strictly apply your credit terms. (Be on time with your debtors, let them know that you are strict on receiving your due when they are obliged to pay it and no later. Allow no room for manoeuvring as this could just lead to serious implications or "slippage" of payments later)
- Be prepared to use legal recourse for debt recovery if necessary
Legal Issues
As you enter the realm of business you will have to enter into relationships with various entities in order to fulfill all of your legal requirements as a corporation and to ensure that you conduct good business practices. Such entities that you may encounter are: e.g. Regulatory Authorities, Revenue Commissioners, Banks, Company Advisors, Customers, Suppliers, Staff, etc. The legal obligations of starting a business can be daunting and lengthy but are best addressed at the start to ensure that no critical omissions are made. It can be desirable to acquire the expertise of a professional such as a solicitor to ensure that all aspects of regulation governing the conducting of business are comprehensively covered.
Such legal obligations can include:
- Meeting all regulatory authorities requirements. (eg. ornamental aquatics retailers must adhere to OATA regulations and standards of practice, food outlets must be compliant with health and safety inspectors and associated legislation).
- Meeting all revenue commissioners' requirements.
- Honouring all contractual obligations (sales and purchases) you enter into.
- Provide goods and/or services that meet at least minimum legal requirements, e.g. sale of goods and supply of services act 1980.
- Meeting all employment legislation requirements for employees, e.g.
1. Registering employees with revenue commissioners.
2. Complying with safety, health and welfare at work act 1989 and 2005.
3. Terms and conditions of employment.
4. Contract of employment.
5. Dismissal legislation.
6. Legal obligations of working hours for staff and ensuring to adhere to speciality legislation for minors, part-time workers etc.
7. Maternity leave and parental leave.
8. Redundancy compensation when laying off staff.
9. Adhering to Equality Authority legislation ensuring equal opportunities for all potential employees regardless of orientation, disability etc.
10. Holiday and leave allowances (compassionate leave, sick leave, unpaid leave etc.)
11. Upholding minimum wage legislation
12. Employers liability insurance
Insuring Your Business
Every business needs to examine its insurance requirements. Insuring your business is an absolutely seminal component of the establishment of your business. Insurance is a critical requirement for all scenarios such as: fire and flood damage, burglary, employee injury claims, Employers Liability Insurance, insurance for company vehicles.
Business insurance can include cover for:
- Fire
- Flood
- All-Risk
- Public Liability
- Motor Insurance
- Employers Liability Insurance
- Product Liability
- Shareholder Protection
Many insurance companies (and brokers) can provide business packages, which include some or all of these items and others, which may be relevant to your business.
In addition, your own personal insurance needs should be re-examined in light of starting a business to ensure that if any complications and/or situations arise whereby you cannot control their outcome (eg. financial liability in liquidation, keeping your domestic assets separate from business etc.), you have a degree of protection and peace of mind that you won't lose everything.
There are many entities that are devoted to promoting new business growth and succeess so you will never be on your own in what can sometimes seem a daunting new venture. Primarily in the Wicklow area, the Wicklow County Enterprise Board provides good support when starting your business, and of particular use are the courses they run in a variety of business-related disciplines.
|
|
|
|
|
|
|
