You and your idea

What’s the key to success? It’s the age-old entrepreneurial question. Sure, external factors are important. If the wider economy goes into recession or times are tough in your sector, you might to have to work hard just to survive, let alone grow.

In other circumstances, usually there are three critical factors tfhat determine whether a start-up or small business will succeed.

You need to have a viable idea. You must also have what it takes to make it work. You also must have enough money to get by until your business starts to generate enough money. A little bit of luck every now and again also helps – as does knowing you have the support of your friends and family.

Is your idea for a business viable?

Before you start up, you must thoroughly test the viability of your business ideas. Only then can you be reasonably certain sufficient customers will buy from you at the prices you charge so that you can generate enough profit.

If you’ve identified a genuine, sizable market need that isn’t being served, you could have a very firm basis on which to start what could grow into a highly lucrative business.

Otherwise, market research enables you to gauge response to your business idea. Basically – you have to speak to potential customers to find out what they think about your products/services and prices. The more customer analysis you have, the better.

You also need to find out what level of competition you face and how you can gain a competitive edge by offering better or more benefits to customers. If you can’t better or even just match a competitor in a market that is already well served, you need to reconsider whether your idea for a business will prove successful.

Gathering information about your market and putting it into your business plan before you start trading is invaluable. It enables you to improve, change or scrap your idea altogether. Acting on market research – either with major or minor changes – allows you to improve your chances of success.

Consider your skills and attributes

If your new business is to do well, much will depend on you. Your experience, knowledge (of your sector, market and running a business), skill, personality, attitude and commitment will have a great bearing on your chances of success. If you don’t have what it takes, even the greatest idea might not work as a viable business.

So what if you are lacking? Having natural ability is hugely beneficial, of course, but with time comes knowledge and experience. You can also educate yourself or seek training. There’s also plenty of advice, support and practical resources for new businesses – if you look in the right places.

Arguably, it’s the other qualities that are more important when running a small business – passion, drive, ambition, commitment, resilience, self-confidence, belief, organisation and discipline. In business, these separate the winners from the losers – and they can’t be faked.

Can you afford to start your own business?

Businesses fail because they run out of cash. They simply don’t have the money to settle their bills when payment is requested.

You need to be sure you have enough money to set up your business and that you personally can afford to live until your new venture generates a livable wage for you, after all costs have been paid. You might have to wait longer than expected to earn the amount of money you’d hoped for. This is common for new businesses. Overnight success stories are very rare.