Is your start-up business idea roadworthy?

In the same way that we’re told we all have a novel inside us, we probably all have a great commercial idea knocking around in our grey matter somewhere. But when you do have this eureka moment, and your idea for a business pops into your head, what happens next?

And how do you make sure this business becomes a success?

Starting the journey too early

For many start-ups, freelancers and sole trader businesses, the first few months of their business journey usually go something like this:

• You come up with a great business idea, which you think will sell like the proverbial hot cakes and will propel you to business success, huge profits and holidays in the Bahamas.
• You beg, borrow and steal to get enough money together to actually start the business, doing everything yourself, or with a very limited, small-scale team (you and the dog in some cases).
• You actually make some sales (hurray!) and are amazed that this *might* just work as a business, despite everyone around you being quite sceptical.
• You start getting bills come in and suddenly realise that you’ve not got enough cash to pay your mortgage this month, as customers are taking a while to pay you.
• You realise that this start-up malarkey isn’t *quite* as easy as you thought it was…and begin looking around for a good accountant to get you out of this mess you’re now in.

Sounding familiar?

It’s an all-to-common story for newbie business owners. And it’s something we see see a lot of here at FD Works – the aspirational, would-be entrepreneur who hasn’t quite done the research, analysis and scenario testing of their business idea.

So, what do we do to help?

It’s pretty simple, really. We put your business through a road test.

Should your business be on the road?

Let’s take that car analogy a little further.

If you had come up with the idea for brand new kind of car – a concept car, if you will – you wouldn’t go straight from the drawing board to haring round Brands Hatch in it without any testing in between, would you?

Starting to drive too early in this unfamiliar, untested and unroadworthy concept car is a one-way ticket to disaster. And, similarly, if you do the same with your new business, you won’t be too surprised when the wheels come off.

In our experience, a large number of businesses – even established companies with years of trading under their belt – just aren’t roadworthy.

• They’re not organised.
• They’re not profitable.
• Their processes are inefficient.
• They have no clear blueprint for their future.

In short, you can end up behind the wheel of a business that you’re barely in control of. And one that could crash and burn at any time.

Define your concept early!

At FD Works, we know that the key to long-term success is to define the underlying concept of your new business idea early.

• Crystalise your core goals – as we said in our last blog, know what your business is FOR [link to previous blog] and set clear objectives that define what you’re going to achieve.
• Get your idea written down in as much detail as possible – and define the concept that underpins your model. This blueprint will come in incredibly hand later down the road.
• Research your market and make sure there is actually a genuine need for your products/services. Without an audience, you have no customers, no income and no way to fund the start-up.
• Work out your financial model: how many monthly sales do you need to make the required cash to cover your overheads and running costs each month? (You would be amazed how many businesses don’t know this!)
• Think how each element of the business feeds into the others. Your business is a holistic machine: if one part breaks, the whole thing doesn’t work. So put some real thought into what the key drivers are and how the business works.
• Consider all the potential scenarios. The road ahead has many twists and turns. How would you plan for them? Could you react to them? How bulletproof can you make your concept?

And, in essence, by sitting down with our clients early, this is what we do. We build a concept model of your business.

• We work out the concept of your business in detail.
• We put it into the computer, analyse the data and check every element
• We redesign, we refine and we improve on the concept
• We deliver a business that, like the analogous concept car, is fast, efficient and – crucially – able to react to changing conditions.

So, when you become our start-up or established business client, you come out of this planning and modelling session with a business that’s ready to trade, ready to react to a changing market, ready to act on commercial opportunities and – importantly – actually turns enough profit to fund your growth plans.

Does your business need a road test?

If you’re reading this and thinking that this unprepared business sounds a lot like your company, don’t despair. You’re not alone in being a small business that’s started off the business cycle without the right amount of planning and preparation.

And it’s never too late to change. At base level, most business issues are quite simple to resolve, if you break down your business model and identify the problems… and the causes.

Who are FD Works?

We’re a forward-looking accountancy firm located between Bristol and Bath. We work with aspiring startups, ambitious scaleups and established firms, identifying the drivers for growth and empowering business owners to make bold decisions.