Preparing to Trade Your Business

PLAN Identify the key aims for your business. Set clear goals and objectives. Review financial foundations – survival budgets, . start-up costs and capital investment. Evaluate financial forecasts and commercial viability. Explore legal and regulatory requirements.

Business Aims

This is what you are setting out to achieve. Your aims give you a focus on the direction

in which you want to take your business.

Some examples:

-Focusing on small businesses, to provide an affordable marketing service that will help give them a competitive edge.

-To develop a community café that provides a warm and friendly place for local people to meet.

-To create amazing, unique sculptures that provide focal points for beautiful gardens.

SMART Objectives

These are the specific ‘milestones’ you need to reach, and pass, in order for you to achieve your aims.

Some examples:

-By month 6, to have established a client base of 6 clients to whom I am providing marketing support.

-Within 12 months to found a suitable location for the community café that will cost no more than £500.00 per month in rent and rates.

-To have marketed and agreed the sale of one sculpture for a price of not less than £1000.00 within the next 4 months.

These will be:Specific, Measurable, Achievable, Relevant, Timely

Financial Foundations

For your business to be able to survive and thrive it needs to be built on a firm financial foundation. Before you start

your business ensure you have sufficient funds for:

Capital investment: The funds required to provide the equipment, tools, fixtures & fittings your business will need in order to trade successfully.

Start-up costs: The amount of money needed to pay for such things as insurances, advertising, website, business cards, stationery etc.

Survival budget: The minimum amount of money needed to ensure you and your business can carry on long enough to generate the profit required for business survival and development.

6

in Sources of Funding for Start-up Businesses

• Your own money• Family & friends• Private investors • Bank loans and overdraft facilities• Prince’s Trust (applicants under 31years of age)• Credit from suppliers (where relevant)

Grants: Available ONLY to specific types of business in specific areas. Take further advice.

Remember: There will always be strings attached to any form of loan, investment or grant!

Know Your Break-Even Point Break-even point is reached when…..

Sufficient GROSS PROFIT has been made to cover the FIXED COSTS (Overheads) of the

business for the whole year

Gross profit

Fixed costs

Until break-even point is reached, the business is not generating any operating (net) profit

PREPARE Prepare a SWOT analysis and evaluate the strengths . & weaknesses of your business idea. Check the legal and regulatory requirements of the . . business. Prepare a Marketing action Plan. Identify sources of business support and how to take . advantage of them.

SWOT Analysis

Identify & maximise personal &

business strengths

Research & evaluate

opportunities

Identify personal & business

weaknesses

Identify & assess the threats to your business

If weaknesses and threats are greater than your strengths and opportunities,

they could overwhelm your business

Legislation

• Equality and Diversity• Age Discrimination Act• Disability Discrimination Act• Race Relations Act• Equal Pay Act• Human Rights Act

Find out about legislation that could be relevant to your business

• Roles and responsibilities • Decision making• Admission of new partners• Accounting arrangements • How profits / losses are shared• Holidays / Working hours• Arrangements for dissolving the partnership• Directors need Directors’ Agreements

Partnership Agreements

Working from Home

• Will your home no longer be used only as a private residence?

• Will your business result in a marked rise in traffic or people calling?

• Will your business involve any unusual activities in a residential area?

• Will your business disturb your neighbours at unreasonable hours or create other forms of nuisance such as noise or smells?

• Landlord or Mortgage restrictions ?

There may be restrictions on the work you can do at your home.Depending on the type of work, you may need licences or permissions

from your Local Authority

Licences and Permissions

• Planning permission

• Local Conditions • Food Hygiene• Environmental Health• Liquor license • PRS license• Mortgage-lender or landlord

PRS for Music ( Performing Rights Society)is a society of songwriters, composers and music publishers. Played in public, broadcast on radio or TV, used on the internet or copied onto physical products such as CDs or DVDs. 

PPL ( Public Performance Licence)the use of recorded music where played in public, broadcast on radio or TV, or used on the internet, on behalf of record companies and performers.

Licences for Playing Music

If you play recorded music in your place of work, you may be required to have a licence!

Terms and Conditions • Clear definition of products or services.

• Terms of Payment – when is payment due ?

• Guarantees or warranties offered?

• Times for delivery or completion.

• What happens if either party does not deliver?

• Notice required to get out of, or end, a contract

• Which country’s law shall govern the contract?

Additionally • Think of all scenarios - what could go wrong ?• Put yourself in your customer’s shoes• Imagine the most awkward customer!

Ensure Terms & Conditions comply with the law!

Insurances

Statutory insurances Vehicle insurance

Employer’s liability (if you have employees)

Other Insurances (check which may apply to you)

• Public liability

• Professional indemnity

• Product liability

• Business equipment

Insurances are about reducing risk. Consider: What could happen?

How likely is it to happen?

If it did happen, what would be the impact?

Important: Your home contents insurance does not cover

business equipment owned by your business. Find out about additional insurance.

Health & Safety

• Basic health and safety• Slips, trips and falls • First Aid• Accident recording • Fire safety• Noise,ventilation,temperature and lighting

You are responsible for maintaining a healthy and safe working environment.

www.hse.gov.uk

Helpline 08701 545500

PERFORM Set Action Steps Implement marketing and sales plans Measure progress and evaluate performance Prepare a Marketing Action Plan. Take advantage of sources of business support

Market Research Evaluation

Who

wants this?

What

do they want?

Where

are they?When

do they want it?

Why

would they buy it?

Seven ‘Ps’ of Marketing

Product. What are the features and benefits of my product/service?

Price. What pricing structure will I use? How much will I charge?

Promotion. What is the best way to promote my product/service?

Place. Where are my customers? How do I get to them?

People. Who do I need to help me and support my business?

Personality. What image will by business create? How will it look?

Process. What do I need to do to keep my marketing working?

Set Your Prices

Check your competitors’ prices Calculate your costs Set a cost-plus price or … Create a value-based price Weigh up other factors

DON’T assume that lowering your prices will gain you a competitive advantage.

Focus first on differentiation and added value

Market Positioning and Price

Suddendeath

Bargain

Cheap as chips

Aggressive

Average

Shoddy

Reassuringlyexpensive

Overpriced

Rip off

low mid high

high

mid

low

Leve

l of

qual

ity &

ser

vice

Use the information from your market research to achieve the balance between price, quality & value.

Price

Personal Profile Example for a Plumber

Committed to providing his customers with a high quality, professional and friendly service.

His qualifications and project installation experience ensure that his clients have total confidence in the standard and safety of installations. His friendly manner and advice sees his customers returning time and time again.

What will your personal profile say about you and your business?

Your WebsiteWhat is your website there to do?

Provide an on-line shopping facility?

Make information available to your customers?

Keep people up to date with the latest news?

Direct people to a course of

action?

Plan your website

Keep it up-to-date

Networking …… is about meeting people, getting known, building

relationships and developing your contact base.

DO-take plenty of business cards-find out about other people and their wants/needs-listen and learn

DON’T-be too pushy (avoid overt selling)-try to talk to everyone (target your contacts)

At networking events:

On-line Networking Opportunities

Social media can provide powerful networking and marketing tools for you and your business

Recommendations

Ask for recommendations from customers and clients and…

-Put them on your website-Post them on Linked-in-Show them on Facebook

Recommendations …- confirm your expertise and professional abilities-encourage potential customers to contact you-provide third-party references

The Sales Funnel

Multiple routes to market

Prospective new customers

Filter

New customers

Marketing generates enquiries; selling converts the enquiry into an order

Reasons the customer won’t buy – price, quality, customer experience, location etc

New business from existing customers

Preparing to Trade Your Business

Have you completed your plans? Done a SWOT analysis? Assessed financial viability? Ensured you’re trading legally? Developed a marketing plan? Identified business support

sources?

When you are satisfied you have a well-planned, viable business proposition, then you may be ready to say….