HOW TO EVALUATE A SPECIFIC BUSINESS YOU HAVE IN MIND

HOW TO FINE TUNE THE SELECTION PROCESS

At the top of a blank sheet of paper, write the name of an activity you would like to pursue. (If there are several options and you haven’t yet made up your mind, create a separate sheet for each alternative.) List as many businesses as you can come up with that are related to the activity, and then list all the relevant products or services. Use your imagination and jot down every conceivable contender. Refine the list to those businesses that do better in bad times (one may be appropriate for you). And now, for the purposes of illustration, let’s focus on three examples from the list featured in ‘Finding Ideas’ (above): Bed and Breakfast, Home Handyman, Garden Maintenance. You can now make a comparative evaluation using the following hypothetical checklist (or better still your own checklist) with a 1-10 scoring system (10 being the highest):

This kind of analysis can help you gain objectivity in selecting your business.

Once you have decided what business you want to start ...

Making sure you become completely qualified

Before you even start to think about running an offline business, start thinking about how to become completely qualified:

• The best way to become qualified is to go to work for someone in the same business – even if only for a few weeks.
• Attend all classes you can on the subjects you need, for example: accounting, technology, selling.
• Read all the appropriate how-to books you can locate.
• Don’t be afraid to ask questions or seek help from the most successful people in your intended business.

WHY YOU MUST TEST-MARKET WHEN YOU SETTLE ON AN IDEA

You now need to consider whether there is a quantifiable demand for your product or service – and the best way to establish that is to dip your toe in the water with some basic test-marketing. For example, you’d like to set up in business using your work skills to get two bites at the cherry like the retired carpet fitter and service technician. Here’s what you do.

If there is a product or produce involved in your initiative, do all of the foregoing but also spread some samples around and endeavour to gauge reaction. It’s not rocket science but it’s what you have to do to establish demand without incurring cost.

HOW RESEARCH IRONS OUT THE WRINKLES

Even if the results of your test-marketing fill you with confidence, it is good practice to undertake some additional research to ascertain whether there are still a few wrinkles lurking around that need to be ironed out. There are several ways you might do this, but here is one that worked for me and it cost me nothing. I visited the best search engine of them all www.google.com to find out everything I could about the feasibility of my idea. I did this before I launched my part-time self publishing venture (on which more at the end of this chapter) and located six superb articles which saved me needless anguish later on. In one of these I discovered that I could do most of the work on my domestic computer, thus necessitating only minimal outsourcing. This particular article also knocked back some other ham-fisted notions I’d been harbouring about getting the business up and running in other directions. All of this I could equally have gleaned by talking with a start-up consultant, but doing it that way would have set me back several hundred pounds.

THE NUTS AND BOLTS OF RUNNING AN OFFLINE BUSINESS

Your route map is starting to take shape and this is where the hard work begins. You should now be thinking in terms of getting to the heart of running your own offline business by engaging in further research and development before you arrange follow-up meetings with the bank and the small business advisory initiative. Next you ought to be making provision for appointing an accountant and solicitor (if required). The closer you get to what will make your enterprise tick, the more readily you will be able to access assistance from the professionals. There is much still to be done but lots of assistance is available to help you get there and towards the end of this section I will direct you to:

• 1An online source offering free tuition on most of the essential aspects.
• 2A public sector offline source that may cost you a little, but is worth the investment.

Let’s start with a suggestion for the template of your all-important business plan.

HOW TO CREATE YOUR BUSINESS PLAN

Not everyone likes writing reports and that basically is what your business plan will be: a report. It will be the instrument that not only keeps you focused on your goals, but the means to attracting any external investment you may require. Borrow a book on the subject from your local public lending library and learn from an expert. Meantime, here are some of the basic elements you will want to include:

• Explain exactly how your business idea works in practice.
• Describe your objectives.
• Define the marketplace.
• Research the competition.
• Produce a clear account of your product or service.
• Explain the key aspects of your sales policy.
• Develop a strategy to market the enterprise.
• Crystallise the strengths and weaknesses of your idea.
• Make out a case for financial assistance.
• Show how you will fund the business.
• Describe the market, its characteristics and current trends.
• Show precisely where your product or service fits in.

Now summarise the overall content and position it accordingly.

DECIDING YOUR BUSINESS STATUS

You have a choice of routes and the eventual decision will largely depend on the nature of your offline retirement business.

Becoming a sole trader

If you are planning to work on your own, your best bet is to become a sole trader. It’s the simplest way to own a business and will keep your legal costs to a minimum. You’ll need to tell the Inland Revenue of your initiative (unless it’s non-revenue producing) but as a sole trader, all the profits from the business will be yours. On the downside, any debt you take on board will also be your responsibility.

Forming a partnership

If you intend to invite other people to become involved as principals, you might want to consider setting up as a partnership. This is similar to operating as a sole trader except that all of the costs and profits are shared between the partners. A partnership can also allow the responsibility and work to be equally shared, which can lessen the pressure on you. Whatever you decide, draw up a partnership agreement to protect your own interests bearing in mind that all debt incurred is an individual and collective liability.

Partnership agreements should always include provision for:

• Partnership shares;
• Partnership property;
• Capital;
• Drawings;
• Accounts;
• Restrictions to protect other partners;
• Comprehensive termination provisions to protect ongoing partners.

Forming a limited company

This is a more complicated form of business ownership. As a director of a limited company you will not be personally responsible for the debts of your business as a company is separate from its owners. You will pay yourself a salary just like any other employee. However, running a limited company entails very specific rules and regulations, and will require the assistance of a solicitor and accountant. Initial setup costs will be higher as you will need to register with Companies House and submit regular financial statements.

WHAT TO CONSIDER WHEN CHOOSING A TRADING NAME

This is a crucial exercise you will need to address as soon as possible. It can make or break any business, offline or online. List as many ideas as you can before deciding on the name your enterprise is to trade under. Getting it right from the start is essential – you don’t want to have to change it after a few months. The secret is to adopt the KISS approach (Keep it Simple Stupid) and there are a few house rules to become familiar with before proceeding further. In essence, the ideal trading name should meet these five requirements:

• 1.No more than seven letters in the composition of the core word in the title, preferably five.
• 2.No more than three syllables in the pronunciation of the core word, preferably two.
• 3.The name must look and sound right.
• 4.It must fit the purpose of the enterprise.
• 5.It must be legally acceptable.

Using your own name is quite alright and it makes sense if you are setting up as a consultant of one type or another. But keep it simple. Not ‘Humphrey D. Lestocque Insurance Services’, but rather ‘Lestocque Insurance’, for example, using the core words to best effect. There is a lot in a name: get it right from the outset.

FINANCING AN OFFLINE BUSINESS

You need to give early attention as to how much money is required to get started. In fact you’ll need to consider very carefully whether you want to enter into any business that entails considerable financial outlay at a time in your life when it might be unwise to embrace that sort of commitment. This could discolour your entire business plan and if it will cause you to worry, don’t do it. Conversely, if you are converting a lifetime hobby into a business, your investment will probably be very small.

Possible sources of finance include:

• 1.Personal savings.
• 2.Insurance policies.
• 3.Annuities.
• 4.Spare equity in your home.
• 5.Friends and relations.
• 6.Bank loan.
• 7.Public sector assistance.

It is highly unlikely that your bank manager will demonstrate much enthusiasm about handing over hard cash on the strength of a business proposal from a retiree without the evidence of other funding in position. Your first port of call then should be to the neighbourhood offices of NewDeal 50Plus*. Listen to what they have to say and if they offer you assistance in any shape or form, take it. Next, pay a visit to the local council business development unit where (assuming your plan is sound and the proposition viable) you may gain access to grants and/or soft loans that are not normally available. Now you can go your bank manager ...

WHY FINDING THE RIGHT LOCATION IS VITAL

Where you locate will depend on the nature of your retirement business and you must give consideration to premises as you are putting together your business plan and initial budget. If you are to be a retailer you will need a shop, or a factory if you are to be manufacturing something or other: for both of these examples go first to the public sector where you might be offered what you need at a peppercorn rent. Try though to locate at home and for most third age commercial initiatives that is a distinct possibility; it conserves cash and is quite acceptable nowadays to most funding sources. If you need a separate telephone line or a ‘front office’ make appropriate provision in your budgeting.

GETTING ORGANISED AT THE OUTSET

Will you be going it alone or will you need staff? Only you and your business idea will determine that. If you need assistance go first once again to the public sector. They will identify trained personnel (or cover training costs) and provide employment grants where appropriate.