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Prepare yourself for business

You may be thinking of starting a new business, or you may be looking to buy an established business. Perhaps you've decided to turn your hobby into a business or to become a contractor. It is essential to understand the differences between a business and a hobby, and decide if you are running a business for tax, legal and insurance purposes.

Owning a business can involve a lifestyle change as well as large financial commitment. Analysis can help you anticipate any challenges you may face and help you overcome them. We've included key areas to help you in thinking about the business you'd like to start, the planning process and identifying how your product or service will differ from those of other businesses in the marketplace.

Analyse your business idea

Is your idea feasible? Before you get started, find out if there is a demand for your products or services. It's also useful to find out who your competitors are and whether the market can sustain your business.

Have you started your business plan? This is the first step in thinking through your business concept and deciding on your goals and objectives. Researching all aspects of your business idea involves gathering, analysing and evaluating information. This will help you define how you will meet the goals you've outlined in your plan.

Some questions to consider are:

  • What product/service will you provide?
  • Is your idea feasible?
  • How will you protect your idea?
  • Is there a market for your product/service?
  • What skills do you need to develop your business idea?
  • Who are your competitors?
  • What difference will you bring to the market?
  • Do you have the financial capacity?

Analyse yourself

Are you ready to venture into business?

Operating a small business is not just about working for yourself, it's also about having the necessary management skills, industry expertise, technical skills, finance and of course a long-term vision to grow and succeed.

At the outset it’s important to consider whether you really understand what's involved and whether you're suited to business and self employment.

Examine these questions:

  • Why are you starting a business?
  • What are your business and personal goals?
  • What are your skills?
  • What income do you need to generate?
  • What are the advantages and disadvantages of starting your own business?
  • How long do you plan to run a business?

Know your strengths and weaknesses

You will require a number of skills to start and run a successful business. The skills needed can often include:

  • management skills, including business planning and the ability to think long term 
  • interpersonal skills, including the ability to communicate and network well to grow your business
  • industry expertise
  • technical knowledge, particularly about the product or service you are selling
  • marketing skills and knowledge to promote your products and services
  • finance skills.

If you want to develop your business skills further, consider investing in training for yourself or your employees. For details about available training courses in your area, visit our Events.

Read our Training topic to find out more about employing and training your staff.

Know your business structure and type

Each business structure and type can have different legal requirements, so it's important you understand these requirements before you decide what is best for your business. Ask yourself the following questions:

Know your product or service

This knowledge is essential to any business, whether online, home-based or otherwise. Without a good idea of what product or service you'll offer, it can be very hard to move forward with planning and marketing your business.

Your product or service will influence your business structure too. Depending on what you market or sell, will you only do business online, or will you also have an office space or store to run as well? This can have an impact on your business in terms of staffing, storage space, and rent costs.

Before you start a business, find out if people are interested in buying your products or services. Find out who your competitors are and whether the market can sustain your business.

Conduct some research to see whether your idea is really feasible. This will involve gathering, analysing and evaluating information to help you formulate your business goals. Finding current industry statistics, sales trends and speaking with other business owners in the industry is often a good place to begin.

Some questions to consider are:

  • What product/service will you provide?
  • Is your idea feasible?
  • How will you protect your idea?
  • Is there a market for your product/service?
  • What skills do you need?
  • Who are your competitors?
  • What difference will you bring to the market?
  • Do you have the financial capacity?

Check out our Market research business topic for more general ideas.

Know your customers

Knowing who you'll be selling to can help you define your business. Do some research into your potential (or existing) customers or clients, and their habits - this means checking out who will be buying or using your goods and services, and how they normally do this.

Understanding your customer base, and how to direct them to your online business, is important. Investigate what kind of customers usually buy online, what they're buying, and how they find their goods and services.

Read our Customers topic for more information on how to provide good customer service and keep your customers returning.

Know your plan

Why write a business or marketing plan?

It may be tempting to get on the internet right away and start experimenting with setting up an online business. However, a little planning can go a long way in ensuring your business is a success. Creating business and marketing plans can help you identify goals and develop strategies for achieving them.

If you're an established business moving online, you might already have a business or marketing plan – but it could be a good idea to review them to make sure they're comprehensive.

Read our Business planning topic for more information on why you need a business or marketing plan.

How do I create a business or marketing plan?

Your basic business plan should be drafted before you go into business, but, once started, you should always be thinking about what you can add to it. It should contain some core information, such as why you want to go into business, and what your goals for the business are. It doesn't need to be long or complicated – it should be clear and to-the-point.

Your marketing plan's aim is to help you reach your target market and boost your customer base and bottom line. Drafting your plans can involve thinking about:

  • what your business name will be
  • how you are going to manage your business
  • looking after finances
  • developing products and services that meet the needs of your market.

Read about and develop your business and marketing plan.

Emergency management and succession planning

Whilst you may be pondering the how and why of starting your own business, it is also important to think about how you might protect your future business in times of crisis or change. Smart business owners prepare for potential risks by creating emergency management plans and succession plans.

Emergency management planning allows you to adapt your business to changes in its environment by taking appropriate action before, during and after an emergency. Succession planning deals with business continuity, and can assist you in managing unexpected events, such as selling, retiring from, or leaving your business due to health reasons.

Visit our Emergency management & recovery business topic for more details.

Find out more on succession planning.

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