This module covers many of the steps you need to follow when starting a new business such as developing a business plan and raising finance.
It will be useful to you whether you are planning to start a business or are employed, as it will give you an insight into the business organization, an understanding of the legal implications of being a company director, and why businesses are organised in a certain way. This adds to your management skills and helps you to understand how the pieces of a business fit together.
We will also support and guide you through the maze of starting a business of your own, offering a sample business plan and cash flow forecast, together with advice on how to complete them for your business. We also examine the problems that are more often encountered by new small businesses.
The topics we will cover are; –
- Market Research
- Developing a Business Plan
- Company Structure
- Directors Duties
- How to Raise Finance for your Business
- Managing your Cash Flow
- Establishing and managing a small business
- Establishing a Small Business – The things no one tells you
- Financing a Small Business
- Business Failure
- Cost of professionals
- Free advice and mentoring
- Staff or contractors?
- Preventing Business Failure
In this lesson we will consider how to carry out market research that will inform your planning of your new business; the issues you need to consider, the key questions you need to ask. Or you may decide to commission market research, in which case you will know the questions you need to ask the company you commission.
Developing a Business Plan
This lesson reflects on the preparation and development and of a business plan. Writing the plan will force the management team to clarify plans, targets and policies. This is an important document for potential investors and banks, because it tells the story of the embryonic company, its mission, plans and policies. It defines the business model and introduces the key management team. A robust business plan and solid cash flow management, a good balance sheet, and a well-balanced management team will encourage investors and financial institutions to consider loan applications, and to work with the company.
In this section we investigate the distinct types of company structure that can be used, and their relative advantages, to help you select the most suitable for your business. It’s a crucial choice because the legal structure of the company impacts on the directors’ personal liability, as well as the business’s ability to raise funding. It also determines tax liability to some extent, and the paperwork the business must complete.
Directors are subject to legal duties in their capacity as directors of a company. Personally, they are liable civilly and criminally, for their activities or omissions when directing the company. They can be disqualified from acting as a director of a company, and in particular circumstances can be made personally liable for company debts. Their obligations include ensuring the business trades lawfully, complying with all legislation and regulation, because of their responsibility for the management of the business within the relevant legal framework and the company Articles of Association.
How to Raise Finance for your Business
In this lesson we review the traditional funding routes and consider Angel Investors and the extremely popular Crowd Funding approach. Whatever the route chosen for raising finance for the business, your mission is to convince potential investors that their money is in safe hands and will earn them a good return. To be comfortable with investing they will expect you to demonstrate that you have scrupulously researched the proposed business. They will want to see a great “pitch” for your product or service, that allows them to establish the probable risks and returns involved in investing in you.
Managing your Cash Flow
The single biggest cause of business failure is the lack of funds to pay rent, salaries, taxes and other bills, Profitability is important in the long run, but for a new business, cash flow must be carefully controlled. Management need to be proactive in managing debtors and ensuring stringent credit control. We offer some tips to help with that.
Read on to learn more about how to start a business, or to understand the structure and organization of the business that employs you.
Establishing and managing a small business
Although the whole of this site is about establishing and managing businesses, the issues affecting small or micro business as they are sometimes known, are quite specific and different from the issues encountered in large corporations.
Having worked in both types of organizations, I am well positioned to appreciate the differences, and the similarities.
The most obvious difference is that in a large company there are departments to deal with every function. There will be an HR department, legal, marketing and so forth. If you are running a small company or are a sole trader, suddenly everything is down to a couple of you, or you alone.
So as well as working in the business and producing an income by offering your services as a lawyer/accountant /decorator / mechanic, you are suddenly distracted by all the other things you need to do.
The things no one tells you
One of these, and often the most pressing, is to line up the work that will bring in the income. Because if you don’t, there won’t be an income!
And if you are too successful at lining up work, you will have to start juggling jobs and asking people to wait till you have a space in your schedule and can fit them in.
Then you must buy the components or raw materials, plan the work, organize deliveries, pay invoices, raise your own invoices, pay staff, keep the bank accounts in order, pay taxes, comply with legislation. And learn to juggle.
All the while delivering the product or service to your clients, and keeping an eye on the flow of future work
So you have to be able to multi task, plan ahead, turn your hand to anything and everything.
Financing a Small Business
Then there is the whole issue of raising start-up finance, and this is where the business plan and cash flow forecast come into their own. You must ensure there is a great invoicing and credit control system in place to keep the income flowing, or you will get further distracted by juggling cash flow.
Lack of funding is the chef cause of many business failures. To avoid becoming a business failure statistic, there are some great steps you can take. Keeping overheads low is a priority, and I will share some other hints and tips with you.
Cost of professionals
The list of professionals you may need to consult and engage with is daunting.IT support, telecoms provider, insurers, website developers, energy providers, marketing and advertising consultants, health and safety advisors. People to give you legal advice, accountants, banks.
Free advice and mentoring
Who you need to consult depends on your own knowledge and ability to research things for yourself, and on your line of business and the regulatory and compliance requirements in your region.
We will give you a “heads up”, at least, as to how you can save yourself some money and hassle by accessing free resources.
Staff or contractors?
One of the key issues you will have to address is whether to take on permanent staff or use contractors. This is extremely tricky and there are arguments for and against each course of action. We will examine the arguments, and reflect on the advantages and disadvantages of each, allowing you to make an informed decision.
Preventing Business Failure
So what are the things that differentiate a successful business from the ones that fail? We identify a few factors in a bid to help you shorten the odds in your favour.
Once you have read and digested these lessons, you will be much better equipped to establish and manage a business or help with the running of one. You will be aware of the issues to consider, awake to the threats and well on your way to becoming an effective manager. And when you want to refer to these lessons at a later date, you will be able to do that.
Sales and marketing are closely linked and are probably the most essential functions in any company, unless it is not-for-profit. They are the activities that generate the company income. Everything else is an overhead.
And if you don’t generate enough sales to cover the overhead and generate a profit, the business is doomed, essentially. So, you must get this right to be an effective, thriving business.
The first part of the course covers many aspects of sales, unique selling points, understanding and qualifying clients, why people buy things. We set a task at the end of each lesson, and if you complete the tasks, you will have developed a sales plan for your products at the end of the first part of the course.
In the second part we look at how to recruit, train and manage sales staff. This is a key consideration, given the crucial part that sales plays in the company.
Whether you work in sales or are the owner or General Manager of a company, it is useful for everyone to understand the sales function, as it is the driver of the business.
Even if you already have a sales presentation for your product, a fresh look at it is always going to be helpful.
Assuming you have a product that is attractive to people, then you can always win more business by improving your presentation and sales technique.
You will begin by considering your Unique Selling Point, or the reason that people buy your product. Then we will look at the competition, and what the clients want, and show you how to deliver exactly that.
You will appreciate the importance of product knowledge, and of distinguishing features from benefits. The client will buy the benefit, not the feature, so that is what you must sell to them.
You will learn how to use SWOT analysis to review your competitors. We will discuss understanding and qualifying your clients. All of this will feed into a presentation plan.
One of the things most sales people dread is objections – the client saying “I don’t need one of those “, “it’s too expensive “or “ what’s wrong with what I’ve got now “ . We will show you why you should welcome objections and differentiate them from refusals.
You will discover how to get great testimonials from satisfied clients and make them part of your sales material. And work on your presentation skills too, to help you deliver your new presentation.
Then we turn our attention to recruiting, training and managing sales staff. We reflect on the skills and attributes and you will be looking for in sales staff. We think about the career path they might expect to follow, and how you might induct and train them.
Some will be new to sales, others experienced salespeople but new to your company. All of them will need thorough product knowledge and must understand how a good sales process works.
Should you train them in-house, or buy a course for them? If you do the latter, you want to be sure they are learning the right things – what should you be looking for?
We give a little thought to conducting regular sales meetings, ongoing training and to industry best practice.
So this is a fairly comprehensive look at this most crucial of functions for a vibrant, successful business. Required reading for almost everyone I should think, whether you are actively involved in sales, or marketing, a sales manager, a senior manager or executive in any function, or just want to understand how all the parts of a business fit together. This is a critical part of the jigsaw, everyone in business should at least appreciate what is involved.