How to Start a Business

This article is a draft. It was just started and needs further work.

Business plan

A business plan is a must for every business. Many businesses have failed that should never have been started, and in a lot of cases a business plan would have made this clear before they ever started.

A business plan considers

• all the costs
  • raw materials
  • labour
  • facilities
  • manufacturing equipment, tools of the trade etc
  • external costs, eg accounting, legal services etc
  • advertising budget
  • IP
  • etc
• income forecast
  • what price will the marketplace will support
  • size of marketplace
  • how end users rate your product in comparison with competition

When these are drawn up its possible to look at the expected profit or loss. This simple exercise is enough to stop a good deal of ideas, any of which could ruin you, even though they seemed profitable until all the business issues were considered.

The chain

A lot of business actions form a chain. The first one makes the 2nd one possible, which makes the next one possible, which makes the next possible etc. To understand this process its easiest to consider the chain backwards.

An example:

• to sell a million units in major stores you need enough sales to get the goods into the major stores
• to make those sales you need to manufacture & distribute the goods
• to manufacture them you need facilities, raw materials, staff etc
• for those you need capital
• to raise capital you need a sound and realistic business plan