You need to check your new business idea to see if it will work, and also to see if enough people will want it.
What you need to do
When explaing your business isea, you must make sure that you can:
a Clearly describe what your business is going to be.
b Explain why you think your business is going to be successful.
c Show what skills you need to run your business successfully.
d Find out how much it is likely to cost you to set up your business, how you will pay for it and how you will pay your early running costs.
e Work out how much money you need to make from your business and whether your business can make enough money.
f Work out how much you can charge your customers to cover your costs and meet your profit targets.
g Look at how anything beyond your control might affect your proposed business.
What you need to know and understand
You need to know and understand the following.
■ Your business’s unique selling point and why it is competitive.
■ How you can balance your own needs with your business needs.
■ How you check your business’s profitability.
■ How important it is for you to have a personal survival budget and how you can work it out.
■ Your planned profits, and how you can work them out.
■ How you understand and use cash-flow forecasts, and what information you would need to produce them.
■ How you understand and use profit and loss accounts, and what information you would need to produce them.
■ How you understand and use marketing and sales forecasts.
■ What laws will affect your business and how. Skills and abilities you will need
■ How you can judge your own skills and abilities.
■ How you decide what skills and abilities your business needs