There is no magic formula or one-size-fits-all for starting an SME, each company being as unique as its owner. However, everyone can take the same practical steps to ensure that the foundation of the business is strong. Click here to find out more regarding the starting rules of SME.
Know your market
Market research is essential to understanding and assessing potential markets for your product or service. The data collected in this way will be an essential part of your marketing strategy and your overall business plan.
Ask yourself the following questions when developing your marketing strategy:
Your product or service – What are the characteristics and qualities of the product or service you plan to sell? How does your service or product stand out?
Your market – How big is it? Is it a growing sector? What is the positioning of your company? Being realistic, how much of the market do you think you can capture?
Your Customers – Who will be your customers? Can you categorize them by age, buying habit or otherwise? What products / services are they currently receiving?
YourAdvertising – How will you tell potential customers about your business? Are you going to actively promote it or will you rely on word of mouth? What means do your competitors use to make themselves known? What about print ads, or broadcast on radio and television? Will you attend trade shows or consider free publicity opportunities?
Your pricing – How will you price your product or service? What message will the price send to your customers about your product or service; ie. , will the product or service be perceived as high-end, mid-range or low-end? Will your prices be competitive?
Your distribution chain – How do you plan to deliver your product or service? Will your customers come to you, or vice versa? Will you sell directly to your customers or will you use indirect methods (through a distributor or retailer)?
Here is a list of things to consider in this chapter.
Where will your business be located? Where do you plan to offer your product or service? Will your customers come to you or vice versa? Some businesses rent or buy space in a building, others share space while a growing number of business owners operate from their homes.
Equipment, supplies and raw materials
Regardless of the type of business, you will need some or all of the following items: office furniture, website, telephone, fax machine, computer, software, printer, modem, other office equipment (e.g. ., photocopier) and stationery.
The success of a business depends, among other things, on setting up a good bookkeeping system from the start. By bookkeeping, it means the keeping of company accounts. These accounts show you the amounts payable and receivable by your business, as well as its income.
There are many accounting software that can make bookkeeping and accounting easier.
You may need to hire your employees immediately or wait until the business is up and running. In either case, there are a number of areas of personnel management that you need to look at: qualifications, compensation, training, wages and benefits, payroll, taxes and accounting, and employment law.
Company name and identity
You need to choose a name for your business, make sure that name does not already exist, and register it.
Do you need a license or permit to continue your activities? What regulations are targeting your business? Legal issues vary by company, municipality and province.
What about insurance? Although it depends on the type of business, you will usually need to purchase some insurance, such as liability insurance, property insurance, or even business interruption insurance.
Making your business idea a reality requires effective financial, operational, marketing and management planning.
The business plan is often of crucial importance when the business has to borrow large sums of money. In effect, lenders and investors then want to obtain a copy.
Here is a summary of the typical components of a business plan.
A typical business plan includes a financial quote that includes an outline of your guarantees, your repayment proposal, and cash flow forecasts.