As with most things starting a business of any size will start with an idea. That idea could be something that is revolutionary or just the knowledge that you can do something better than those that are already doing it, I always get this feeling whenever I deal with estate agents.
From this idea you will need to flesh out the business, it is fine saying you are going to start your own estate agents but you need to get more specific and decide what sort of area you will cover, what sort of property will you offer, what pricing model you will use to make money and what sort of advertising you will invest in.
As you go through the list of things that are involved with the sales process you need to write them down as headers and write an explanation as to how each of these will work, this will form the basis of your first buisness plan and it is vital when you are setting up a business.
Think about how your business will run, do you need business premises, do you need a web site if so how much do these things cost and what money do you need to budget for furniture and electricity as well as marketing and promotions. The more accurate you can get at this stage the more accurate your business plan will be.
Once you have listed all your costs you need to divide them between one off payments, like the cost of furniture or the website and ongoing costs such as promotions and salaries, from this you will be able to determine the amount you would need each month to break even. Do not forget that you will have things such as tax to budget for too and this will need to be included in your projections.
Once you have the start up costs and monthly costs you will need to consider how much you can realistically expect to bring in each month. Using the estate agents example again, how many houses could you sell each month? This is where you will need to do a bit more market research. If you have worked in the industry before you will have some idea of what the sales volume is like, if not you should try and find out. One way to do this is to ask people you know in the industry but remember they may exaggerate or mislead you if they suspect you are thinking of entering the market.
Personally I like to add 20% to the figure I have for expenses and reduce my estimate of sales by 20% just to try and put the worst look possible on my figures. If they still look profitable I would continue investigating the market until I’m confident that I can enter it safely.
If you’re interested in getting help with finding finance for a new business then the first thing you need to do is to write a business plan. There are many different types of business plan software available to buy which will help you write your own but I would recommend using Business Plan Consultants as you are likely to have more success with their guidance and professional business plans.
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