Introduction

This page gives a very general introduction to the basic principles and tries to point out the key issues which you will have to address without getting bogged down in the detail – there are many detailed introductions, often called 'preparing your business plan' or something similar, which go into considerable detail and can at first sight be rather off putting.

When you arrive at the detail stage, visit the websites listed at the end of this document for providers of information and support.

Starting to gather ideas

‘Business’ ideas can be anywhere in the market place, including leisure, cultural, media, heritage, as well as in manufacturing and business; in other words, no matter what are your background and experience there are opportunities.

There are always gaps in the market place for new or novel approaches to the product, service or delivery and perhaps particularly in recent years in applying new information and telecommunications technology to the traditional. 

Your playing field is CHANGE.  Consumers, be they individual or corporate, are changing for a whole variety of reasons and this creates opportunities for entrepreneurs to step into gaps left by providers who think there is going to be a better market elsewhere and change their business accordingly.

Your local shop replacing magazines or birthday cards with freshly made sandwiches is just as much a business opportunity as was the decision by British Airways to concentrate on business class customers which left the economy class market for operators such as Easy Jet and Go, a market which they have now developed to include business passengers.

So one way you can develop ideas is simply to observe your own environment and identify changes that may create gaps for your new business.  You and your generation are at the forefront of the use of new information technologies and mobile communications, and all of the services that they provide.  What existing, traditional products and services could be delivered more effectively and productively using these technologies? 

Another approach is to work out from you, through your own interests, activities, student jobs and degree studies, to your family and friends, and look for new products, services and/or means of delivery that meet unsatisfied needs.

Developing a business idea - the main issues

Product or service - this is what you aim to sell and some questions include:  Are your customers individuals or companies and organisations? What would be the particular benefits of your approach over the existing or traditional?  Are you going for the mass or specialist market?  Will you be looking at high or low cost products or services?

Market research – will people actually buy it?  This is a difficult question to answer because if you go out and ask people if they will buy something when it’s available, they may give you a totally different answer from how they will behave when that product is actually available.  Part of your plan might well include testing the market  through a small-scale operation before full launch.

The Market - you will have to identify both the size and characteristics of the market into which you are selling.  For example, 55 million people in the UK eat and drink every day although only some of them will make purchases; there are over 1 million golfers in the UK but they will probably buy golf balls only once every month or so; every UK business uses telephone and information technology.  You have to consider how big is the market for your product or service and it is useful to think of the ‘four Ps’ of marketing – product (the product/service), place (how you will distribute them), promotion (how the potential purchasers are made aware of the product/service) and how the price relates to other products/services on the market.

The quantitative bit … costing, pricing, sales forecasts, cash flow, profit and loss, capital required….  This is quite a technical area but one which is absolutely essential for the success of any business. You simply have to make sure that the financial basis of your business is well documented, and you can get advice from organisations such as the ones listed under Business start-up resources at the end of this page.

You and your skills - we think self-employment needs three sets of personal qualities.  First of all you must have commitment, drive, motivation, and confidence; commitment to the project, motivation and drive to succeed and confidence in your own abilities and in your product or service.  Secondly, you will need to be able to deal with uncertainty.  Your income depends on your ideas and your business and there is no guarantee of a weekly pay packet or a monthly salary.  Thirdly, you need to recognise that you will be competent in only some of the skills that are required by an entrepreneur and recognise that there are some activities that you will be able to do, but others where you will have to draw on the skills of your partners or have to pay other people to do the work.

Business plans - All of the above issues – and many more – will be brought together in the Business Plans which are available through many organisations that are in the business of supporting potential entrepreneurs – See under Business start-up resources.  Our recommendation is to try to work through these Business Plans by going relatively quickly through each section and completing the parts about which you do have some information and have done some investigation.  You can then turn your attention to sections that require additional effort.  If you start at page one and work through the detail of each section, you may never get to section two, never mind the end of the plan – in other words you will become bogged down with too much detail on one topic.

Further advice and support

There is lots of material available from many organisations who are in the business of trying to help people become self-employed - here are some key starting points:

UK-wide information

• The Self Employment section of the Graduate Prospects website 
• Business Link – a key part of the government’s campaign to promote enterprise
• Students In Free Enterprise (SIFE) aims to provide university students with opportunities to develop leadership, teamwork and communication skills through community projects that help others develop their skills and knowledge.

Regional development organisations for the UK and the Republic of Ireland

• England’s Regional Development Agencies 
• Scottish Enterprise
• Invest Northern Ireland
• Irish State Department of Enterprise, Trade and Employment
• The Welsh Assembly Government’s Department of Enterprise, Innovation and Networks
• The Business Centre Swansea is a serviced provided by the City & County of Swansea to ofer a comprehensive business support service to small businesses in the Swansea Bay area.