About the author

Will Townsend, _Dublin, Ireland

Will Townsendis a senior auditmanagerwith Cooney Carey,Russell

Bedford'smember firm in Dublin.He is a CharteredAccountant and

is involved in the Cooney Careyteam that assistsstart-up companies

through their initial steps.Will hasassistedin the preparation of a

booklet for Ireland'ssecond biggestbank on the topic of start-ups

wtownsend@cooneycarey.ie

8 Business World - Autumn 2012

Starting your own smallbusiness - the first steps

To become successful in business you need the right attributes, a good idea, a plan to make itwork and a way of financing your business. In this article we take a look at what you need toconsider when starting up in business.

Entrepreneurs - what do they look like? • Flexibility - the ability to adapt to a changingenvironment

Before you start your own business, be sure you havethe personality traits that successful entrepreneursdisplay. The familiar characteristics of a successfulentrepreneur include:

• Education - not formal education but a desire tolearn and a drive to improve

Focus - entrepreneurs focus on the big visionand recognise that short-term wins, althoughimportant, must add to long-term success.

Optimism - entrepreneurs focus on solutions notproblems

• Passion - the quality that fuels their business andtheir personal lives Generating a business idea

• Persistence - entrepreneurs keep going in times ofadversity and stay focused on the end goal

If this sounds like you, the next step to setting up yourown business is to identify a gap in the market thatyour product or service will exploit. This is easier said

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than done and can be the toughest part of settingup your own business. To do this, ask yourself somesearching questions. What services or products aremissing from the market? Could you invent a newproduct? What do you dislike about existing productsand services? Could you improve them?

Using your own life experiences to inspire yourideas can help you spot business opportunities.This will also make you passionate about your productas you wi 11be able to see and sell the benefits.Remember passion is one of the key characteristics ofa successful entrepreneur.

Turning your idea into a strategic plan

Studies show that a significant amount of newbusinesses with no business plan fail within the firsttwo years. The old adage is true: fail to plan and youplan to fail.

Your business plan reflects how you see your businessdeveloping and maps out how you intend to driveyour business forward. Your plan should set out yourproduct, your intended market, and your key financialtargets such as projected sales and profits.

Financing your plan

Your plan should also show the seed capital youneed to start up and your day-to-day working capitalrequirement. It is vital that your assumptions andestimates are accurate and reasonable. Do this andyou will be able to foresee any problems and resolvethem before they happen. A robust business planallows you and potential investors to see how yourbusiness may perform in the future.

Here are some ways for you to finance your business:

Investigate any government support such asgrants or loans.

• Borrow money from a bank or other lender.

Ask for help from friends or family.

Look at equity finance, where you raise moneyfrom external investors in return for a share ofyour business. These investors will usually beventure capital firms or business angels.

Consider bootstrapping, a way of starting abusiness without external finance. This method ismore strategic and focuses on creating cash flow,minimising expenses and reinvesting profits.

Structuring your business

How you structure your business will depend on whatit is, how you finance it, and your long-term businessgoals. It will probably take one of these forms:sole trader, partnership, franchise or limited liabilitycompany.

Before deciding your structure, ask yourself thefollowing questions:

Is it important that you limit your personal liability?

Does your business need to meet any regulatoryrequirements that may have a bearing on yourbusiness structure?

How important is ease and cost of set-up?One structure may be easier, quicker and cheaperthan another.

Do you have an exit plan? If you do, consider howthe structure choices impact on your plan.

The tax and accounting requirements you have to meetwill depend on where you operate. Also dependingon where you operate there may be government taxincentives so be sure to investigate this. Wherever youare and whatever your business, choosing how tostructure your business is an important decision. It isworth seeking professional tax and accounting adviceto help you make the right choice.

Conclusion

Becoming a successful entrepreneur isn't easy.Most successful people will tell you there is no rightor wrong way and that to be successful you must bewilling to fail. If you have the right entrepreneurialcharacteristics, the right idea, and you structureyour business in the right way, you stand a goodchance of succeeding.

Autumn 2012 - Business World 9