How do I go about starting up a new business?

The first thing to do is write a business plan. You can find a number of templates online. The plan covers all kinds of things, including:

The concept (a description of the service or product you will be providing);
The resources necessary to run the business (which describes all your one time expenses such as for rental of space, and ongoing expenses such as electricity);
A description of the capabilities of the principals; ...

Well here’s a sample table of contents (from here):

I. Table of Contents 3
II. Executive Summary 4
III. General Company Description 5
IV. Products and Services 6
V. Marketing Plan 7
VI. Operational Plan 16
VII. Management and Organization 21
VIII. Personal Financial Statement 22
IX. Startup Expenses and Capitalization 23
X. Financial Plan 24
XI. Appendices 27
XII. Refining the Plan 28

If you use a template, then it kind of forces you to think through all these things, which makes your concept much more viable.

Cheers daloon. Much appreciated. I have being told this before. I was looking for more generic advice around what are the motivational steps and how do you know if an idea is a good one? Any ideas?

Well, I think that’s just it. Making yourself do the business plan both motivates you and gives you a sense of whether you can actually pull it off. It doesn’t matter which idea you choose, so long as you choose one and actually make the plan. If that doesn’t seem to prove workable, then you go on to the next one that you think is a likely prospect.

This is very difficult for imaginative types. We would much prefer the doing and the dreaming to the planning and operationalizing. The discipline of making a plan helps you put the rubber to the road. If you have a partner, this can be easier.

Wo many people do it all wrong. My son was hired by a ‘friend’ to help start a business. They borrowed some money from relatives, bought up a bunch of electronic games and accessories they liked (wholesale), and rented a store front.

After three months of very sparse sales, they closed down again, and tried to sell the stuff they had on Craigslist. It was a complete disaster. They finally got their stuff sold, at a loss, of course, and the relatives will never see the money they loaned them.

(Not me, I wouldn’t touch this one with a ten foot pole).

This is why it is so important to have a business plan. It helps you see what you need to do to make money. It makes you write a proof of concept. It makes you really think through whether you can sell enough of whatever it is that you are selling.