Establish the first steps to start a business
Many entrepreneurs have a business plan in mind. They have fresh and innovative ideas, assertive visions and enormous enthusiasm. But why don’t all business plans succeed? Sometimes it may be because they don’t make it past the investor’s desk, unread. Still others remain just a project, because they don’t know where to start. There are doubts between registering as self-employed or setting up a company, but above all, there is no good definition of the business. So let’s go by parts so that you can establish with a firm step, how to set up your company.
When your business plan is just an idea…
- Added value. To begin with, your idea must provide added value to your target customers, no matter if it is something traditional or innovative. What follows is to consider to whom you are selling this proposal, to whom it will be of interest, but in a concrete way. You should consider this even if you cover a fairly broad group of the market, but you must have a target audience.
- Study the target market. It is possible that your idea is good and innovative, but at the moment there are no potential customers to answer the call. You must know how many potential buyers there are, even if they do not end up buying, but there are enough of them. In addition to this, check your competition, because if they surpass you, customers will compare and choose according to the offers. Of course, there will always be competition, but it should not be too much.
- Profitability of your project. It is true that you are investing time or raw materials, in addition to considering salaries, rent, transportation, etc. So, if the price is lower than the variable cost, consider the viability of your business plan. Fixed costs are an important point to consider, so you should review each of them. If the amount exceeds what you get when you sell, your business plan may not be profitable.
- How you sell your product or service. Next in your business plan is the way you sell it, that is, how you will choose to monetize it. One way could be to charge every time your customer accesses your product or service. But also if you make some kind of subscription or rental, for example. From here you will lay the foundations for what you sell to be successful or not. And along with this, comes the price. You must be objective, but charging more within what is possible or reasonable that your customers are willing to pay.
Business plan and business plan
If the above is already well defined, then comes the consolidation part, the business plan. This is basically a methodology that will integrate and systematize those activities that are essential for your company. And of course, with which you will achieve profitability and success. Through your business plan you will be able to attract and convince those who can help you to start your business.
However, there is some confusion between the business plan and the business. Keep in mind that the business plan refers to a start-up project and involves information about the incorporation of the company, requirements, etc. On the other hand, the business plan is one that, in addition to what we mentioned above, is for companies that are already underway. And if you are just starting, the business plan is the one that will attract the investor or investors because it is very worthwhile.
For this, your business plan must be attractive, both in its physical aspect, design, as well as its organization and structure. It must be clear and suggestive enough for the investor to make calculations and consider getting involved. It is important to be brief, direct, concise, write clearly and avoid anything that does not contribute anything. Creativity and dynamism are also highly valued, but without falling into excess. A video or supporting material, if well handled, can add a lot. Clarity and precision must be added to this, showing the key ideas in a very precise manner, at the beginning. It should be well organized and orderly, including market research, CVs of professionals, etc. Avoid exceeding 75 pages.
To whom do you address your business plan?
It is important that you consider the target audience of your company’s business plan. If it is to venture capital, you must clearly indicate how you could get out of the business. In the case of a business angel or private investor, it should preferably be through a common acquaintance. These investors are involved in the company and you must establish how it will be done. If you go to a bank, the guarantees must be clear, real or physical, and demonstrate it.
In the case of public administrations, you must cover very well what is requested in the requirements of the subsidy. It is important that you adjust to what is requested, especially where your business fits best. As it will be an official who will read and check if you comply with the requirements, you must be very clear about everything. In all cases, don’t forget to include the cash budget, as well as the financial and economic viability analysis.
Other points to consider when setting up your business
- Executive summary. Remember to include an executive summary, which will be personalized and appropriate depending on who you are addressing, which will be one or, at most, two pages long. Here you should include your business idea or vision, your value proposition, market characteristics and target audience. Likewise, you must include your promotion team, as well as the resources to be used. And of course, the investment required and the payback time.
- Describe the opportunity. This is a basic point that should not be overlooked. It is to indicate that there is a niche in the market that has not been covered and that you have the solution to it. Describe clearly what it is about and why it is a business opportunity, etc. This will also include a description of the promoters of your project and their background, as well as a SWOT analysis.
- Target audience. Within the marketing plan, you will establish who your target customers are, detailing gender, age, geographic area, etc. Include the price corridor depending on whether there is already a similar product on the market, if it is different, if it covers other needs, in short. This is how you will establish the price. Describe your competition and how you differ from them. Establish the selling price, but leave a profit margin, as well as the sales forecast according to the seasons. Include distribution and how you will communicate your product (promotion, advertising, etc.).
Establish your HR plan, as well as the production plan and the financial plan. And finally, the legal plan, which sets out what will happen in certain scenarios and the measures to be taken.
Finally, remember at ISEA (Ireland Spain Economic Association) we offer you full support in advising you on your business plan. We are a solid association that has established strong ties between Spain and Ireland. We have been in existence since 1989 and we encourage greater trade and investment openness between both nations. Learn more about us on our website.