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Whether you are looking to start a business from afresh, or buy an existing business or franchise, it is essential that you take some very important steps.
Choose a business
You need to look at your own skills, experience and personal qualities and make a full analysis of these. Ideally you should start a business in an industry with which you have experience. Not only will this be easier for you but it will give your customers confidence. If you are thinking of buying a franchise then you could choose an industry where you have little or no experience as very often the franchisor will provide training and help. If you find a business that you are looking to purchase, it is vital that you fully investigate it to ensure that the price is correct and that everything is in order with the business (and with the company if you are to buy a company with the business). This is called "due diligence" and will cover looking into many aspects of the business such as the accounting, existing contracts, the structure and situation of the company you are buying, any debts outstanding and very often a valuation of the business itself. It is important that you carry out the due diligence before signing any contracts or paying any reservation fee or downpayment.
Plan the business
An essential part of setting up your business is to create a business plan. This will be particularly important if you will be seeking financing from a bank or other funding source, or if you are buying a franchise. The business plan is a useful tool in order to take a critical look at your business, and give you clear financial and business objectives. You should review the business plan regularly and compare your actual results with your forecast. With this knowledge you will be able to make informed adjustments.
Research the business
You must always research your business. You need people to buy your products or services, so you need to identify the demand and you need a way to market them. There are many ways you can carry out your research: from employing a market research company to doing the legwork yourself. It is crucial to have reliable data upon which to make your decisions.
Set up the business
For the business you will need some sort of formal structure, whether it be a partnership or a company. Whenever you go to banks, landlords etc., they will want to know how your business will be organised. Advice from a good lawyer or accountant will be invaluable in order to determine the structure that best suits you and your business. Your lawyer/accountant will make sure that your business is correctly registered and your taxes are fully paid and on time. This will be particularly important should you have employees!
The business will need premises of some sort from which to operate; your market research will tell you the best location. Negotiating with landlords can be a daunting task, particularly if you are setting up a business in another country. You may want to employ a professional to handle the negotiations for you.
Monitor and review the business
As with the business plan, it is vital that you review your business performance. If you have borrowed any money from a bank or financial institution, they will already have requested a business review. You should carry out the review with any interested parties such as co-directors and partners.