Rule number one: a good idea isn't always enough to start a business.
To succeed, you need to study the market, plan realistically and mobilize your troops to achieve your goals.
In practice, vision is only part of the equation. You also need to be able to solve real-life problems and stand out in a competitive environment.
To guide your steps in opening your own business, here are a few tips from our firm:
- Target your market
Ideally, your products or services should be positioned in a young, fast-growing market.
In more established sectors, you'll need a competitive edge to stand out (innovative product or service, unrivalled customer service, attractive prices, etc.).
It's a good idea to contact a specialized research agency to gather as much information as possible to define your potential market - including the strengths and weaknesses of your competitors and the time needed to develop your product. Remember, during this time, you won't be making any sales.
- Surround yourself with the best
The members of your management team must have complementary skills. The most effective managers make sure they recruit top-level experts for each sector of activity. Don't be afraid to hire people who know more than you do in their own field.
You should also consider external resources as an extension of your team. From a practical point of view, you'll need technicians, salespeople and managers, but also accountants, lawyers and marketing specialists.
If you lack the resources to create a board of directors, you can form a strategy committee and invite your CPA to sit on it to advise on management decisions.
- Be a visionary
Avoid constantly putting out fires and losing sight of your long-term goals. List all the factors you need to consider in the immediate and medium term, especially if you're planning rapid growth. To help you manage this growth, examine all possible options, such as buying or leasing premises, furniture and equipment. Also consider outsourcing certain functions, such as human resources.
Along the way, you'll need to consider growth factors such as energy and resources, raw materials, salaries, financing and technological needs.
If you've carefully assessed your growth potential, it's legitimate to think big. For example, if your company serves a particular niche, it may only become profitable by exporting.
- Diversify your financing
Business start-ups are often financed out of the founders' own savings (and those of family and friends). In many cases, it's necessary to look for external sources of financing - the Angel, as they're known in stock market jargon (private investors), venture capital funds, aid funds or granting organizations in the social economy sector.
Prepare yourself carefully and know what investors expect of you. In the words of a businessman who himself invests in companies:
If you go knocking on a door too early, or ill-prepared, it may be closed to you later when you're really ready to go through.
Most companies take a long time to set up, which leaves a lot of "down time".
- Optimize your time
. Put this downtime to good use, by taking advantage of it to network, for example.
- Take care of all administrative formalities
There are a number of - often highly technical - requirements to be met before you can give your company a concrete existence: for example, choosing a legal form, drawing up your business plan and complying with labor law, occupational health and safety and training regulations.
In the commercial and industrial world, you can set up a sole proprietorship or a limited liability company (חברה בעמ), with very different statutes, privileges and responsibilities.
See also: Choosing the right legal status in Israel. If you're part of a group with several associates, you'll need to draw up an associates' agreement defining the code of conduct to be respected by all.
Make sure your ideas are patented or at least protected by copyright, trademark or trade secret. Otherwise, you risk infringing another company's rights in this respect.
- Draw up a sales-oriented business plan
Make sure your business plan contains all the above elements. Short and to the point, it should describe your business project and the means to achieve it.
Expect to have to rewrite it many times before arriving at the final version. Don't hesitate to ask for help if you need it.
Submit your Business Plan to a firm of chartered accountants, to prepare the financial part of it. Remember that a business plan is more than just a collection of figures and mathematical data.