Analyse Like A Boss – Define Your Own Business Idea
As Business Analysts we tend to find ourselves working as consultants, contractors or permanent in-house domain experts on enabling new opportunities or solving problems for medium to large businesses.
Have you ever thought of using your awesome array of BA skills and experience to create, operate and lead your own small business?
When you think about starting your own business, the mind begins to boggle with the enormity of it all and it feels very daunting, scary and almost impossible to fathom. Not knowing where to start and how to move forward is the biggest obstacle to overcome.
A manageable way to approach the creation of a new business venture is to break it down into small key milestones that when set out in a logical order make the enormity easier to digest and will give you a clear starting point.
After having your “Eureka” moment and forming the kernel of your business idea and concept you can leverage your existing BA toolkit and skills to do some research and get your concept down on paper. Doing some high-level analysis and modeling does not cost anything but your time. During this initial analysis, you will learn a lot about your concept and its viability and takes you a step closer towards your potential new future venture.
- Consider your product and its key point of difference
- Create a prototype where possible or a strawman on paper
- Go through a SWOT analysis (strengths, weaknesses, opportunities, and threats) to assist in seeing the bigger picture and potential risks to work through
- Analyse the potential market and buyers for your product, who are they, where are they, how old are they, what are their buying habits, how much is their disposable income, what social media do they use, how will you reach them?
- Use free online census data for understanding customer demographics
- Conduct competitor analysis and benchmarking, this is a great way to see how other similar businesses operate. How do they market their goods, what are their price points, what do they do well, what could they improve on, what can you learn from their experience?
- Analyse the costs for your business start-up
- Model profit and loss including start-up expenses, projected growth targets for the first five years of business, cost to operate and sales targets to see how viable the idea is on paper
- Think about how you might fund the venture, financial institution loan, business partner or give crowdfunding a go!
- Analyse the best company set up for your situation, e.g., sole trader, company, partnership. It is worth seeking advice from an experienced business accountant when assessing these options as they can provide expert taxation advice and can assist if required in the creation of a Pty Ltd company
- Perform organizational modeling to determine the roles required for your business, size, and budget
- Determine what role you will play within the business. Always leave room to work on your business and not just in the day to day operation of your business
- Define your company’s core values, what does your business stand for, what are your guiding principles
- Think about your company’s persona, how do you want to present your image to your customers? Is your company cool and hip or friendly and trustworthy? Knowing how you want your company to be perceived is very useful when the time comes for creating marketing materials like logo’s and websites.
Skills and Experience
- Analyse the key skills and experience you will need to be successful within the specific industry domain you are looking at entering
- Rate your existing general business skills like accounting, marketing, sales, payroll, etc
- Perform a gap analysis of where you are now, what you need to learn and how you will close the knowledge gap to acquire the relevant skills to enable success
- Close your education gap including internet research, training courses, work experience and finding a good mentor.
Key Business Processes
- Process analysis is required to determine what business processes and underpinning forms, reports etc .will be required
- Define your key value stream using a process flow chart identifying points of value and points of waste within and between processes
- Process benchmark information for specific industries is available from the APQC industry standard website and can help inform you of the typical processes your business may need
- Create a SIPOC diagram (suppliers, inputs, process, outputs and customers) for all key processes to understand the inputs and outputs and suppliers you may need.
- Define your requirements for software tools to manage your accounts, invoicing and payroll (or will you outsource this part of your business to a strategic partner?)
- Document what marketing tools your company will need including a website, Facebook, Twitter, Instagram and graphic design software tools
- What customer relationship management tools are available to manage your customer database
- What financial sales tools will you need to manage point of sale or online ordering?
- What physical tools do you require to create your product? are these tools best rented with maintenance contracts in place or purchased outright as an asset and depreciated?
- This information will feed directly into your cost modelling for start-up and operation
After doing your analysis on paper, you should have a reasonable idea of the feasibility of your business idea, the complexity and associated costs.
If your numbers initially stack up and you are still excited to take the next step with your idea proceed to Article 2 in the Analyse Like a Boss series – “Business Start Up” to understand some of the BA techniques and savvy you can leverage to put together the required deliverables to start up your new business venture.