The First Step!

[paulho]

How do you make the first step from having an idea and being stuck in the 9-5, to transforming the idea and turning it into a successful business. I am thinking of starting a simple sandwich delivery business. When is the right time to "take the plunge" and how do I create a residual income in the first few months to live, while the business is in the early stages of being built and grown?? :roll:

Also, how much can I realistically expect a bank to lend me to get up and running. I estimate 5,000 would get it up and running, but not being a homeowner, am I going to be laughed out of the bank, having no security???

 

[Ozzy]

Hi Paul,
There is never a "right" moment in the way I think you mean, but on the other hand any time is also the right time. Sometimes taking the plunge initially is the hardest step.

You also need to have some savings behind you to get over the first several months of no wages.
The banks will usually match what you put in, so if you put in 2,500 they will usually match that if you have a strong enough business plan. The process of putting together a busines plan will also help you identify potential clients and also how much money you will need.

 

[paulho]

The banks will usually match what you put in, so if you put in 2,500 they will usually match that if you have a strong enough business plan. The process of putting together a busines plan will also help you identify potential clients and also how much money you will need.

Thanks Ozzy.
So to raise the 5,000 I'm staying at work long enough to raise half :shock: The whole point of me doing this was to escape getting to the end of the month and being overdrawn :lol: Looks like it's back to the drawing board

 

[RockLinks]

Someone once told me that if you want something so much you will do anything to get it. If you really want this then its worth staying at work to get the money saved up. Dont give up you will get there!

 

[autolycus]

I estimate 5,000 would get it up and running, but not being a homeowner, am I going to be laughed out of the bank, having no security???

At that kind of level, you are well within the limits for an unsecured personal loan or a cash advance on a credit card. Neither of these requires any security/home ownership.

You should of course make sure you are confident you can meet the repayments before going down this route though - i.e. have a proper business plan and cashflow forecast in place.

Dave.

 

[Webstuff]

As above, many loan companies will give someone with a proven income an unsecured loan. Your best bet will be to keep your current job whilst in the early stages of setting up your business, so get used to not sleeping . Are you planning on making this a phone-order business like "pizza-2-u", or a special catering service for businesses / schools / events, etc?

 

[malcdawes]

I set up a business almost two years ago. I did have some cash behind me though, which was just as well as I had no income from the business for over four months. Things are going well now thank fully. I agree with other here who say that if you want something bad enough, you will do what it takes to get it. I had been an employee for 23 years, have worked shifts, weeks away from the family etc. etc. i would NOT go back to all of that now I work for myself. It really is worth striving for. Don't worry about the finance, think of innovative ways of raising the money you need.

Whatever you do I hope it works for you. There is no such thing as good luck, just good success from hard work.

Malcolm

 

[TargetTesting]

As Ozzy said, there is no "right time" to make the leap.

Having the savings and starting capital is important but sometimes oppertunities can pass you by while you are trying to save up to get going.

For £5K I'd probably approach the bank for a loan, present them with a business plan and go from there. The banks are usually very good at helping you get started and can offer lots of good advice.

However before you go to the bank, business plan in hand do some market research. Find out if there is a demand for the business, what people actually want and how much competition there is. All this adds weight to your business plan and banks like you to be prepared.

Once you've got the finance, I'd suggest carrying on with work for a short while and start marketting your service so that people are aware of you before you launch. You might get some up front interest to help you get started.

As webstuff pointed out be prepared to loose some sleep

Good luck

 

[simonread]

Most of the above advice is good, and only you know when is the right time to make that leap! Before you do make that leap make sure that your friends and family understand, and are fully supportive, of what you are doing. Running a business is hard work, and their support will be invaluable.

I suggest that you get a good team around you including a mentor, an accountant and any specialist advisors that you need.

The best source of advice is from people who have already 'been there and done that'. The banks are NOT very good at offering lots of good advice, despite what they say. Have you ever met a bank manager who has any experience of setting up and running their own business?

 

[Strategist]

...plan it properly. First, what is the opportunity here? Are you considering an area where there is a high density of offices? Can you get inside to sell your stuff? Is anyone locally already providing the service? If so, what is the range, quality and prices being offered? Can you do something better? You mention £5k being sufficient to start up. In my experience, businesses start with too little cash. You need to be able to ride out the first few months? If you are 30 or under, you may be able to raise some cash from the Prince's Trust and the balance will then be easier to obtain from a bank. Preferably put in some of your own cash as well. You will need a very good business plan. A short one as there is not a lot you can say about a sandwich delivery service that, even if it is umpteen times better than anything done before, is not blatantly obvious. However, you will need to convince the finance people that there is a compelling case for providing the funding. This will be achievable if your research (summarised in the plan) is then converted into how you will market and sell your delicious produce and that it will be competitively priced. The cashflow will need therefore to be directly related to the text of the plan in terms of costs, prices and unit sales and how these will be achieved. Doing all this right is, in my experience, a sure-fire way of getting funded. Make the finance peoples' lips water and they'll soon part with the cash. If the PT/bank combination does not work, there are also other lenders of last resort, usually within Enterprise Agencies. These will consider proposals rejected by the banks. Good luck.