What you need first before starting up

Business advice is available to new start ups and existing small business owners in all sorts of shapes and forms these days.

In fact, most of it is worth every penny, and you can also get genuine, professional advice free or free-ish from accountants, lawyers, consultants/coaches, business libraries, enterprise agencies and yes, even from your bank manager, if you know where to look and how to ask for it.

And from observing the quality and relevance of the advice available compared to ten or even twenty years ago much of it is now of a genuinely high standard (or at least does what it says on the tin) - while some of it leaves a lot to be desired, much to the frustration (and often the cost) of its intended recipients.

Something to watch out for in spotting these less than genuine experts and advisers is when they refer to small firms as 'SMEs'. A horrible term, meaningless to a business owner, but something of a 'giveaway' which provides you with the clue that the expert's real customers are not you or other business owners, but are in fact the funding pots who keep them afloat.

Now here's a question for you. When you started your business, or if you're in the process of starting one now, what do you think is (or was) the first and most important thing you needed to have before you made the decision to start? And if you've had some "expert" advice, what did they say you needed first?

A business plan, perhaps? You'll certainly benefit by having a plan to identify your business strategy and targets and the route you'll take to get there. But not right away, though, there's something far more important you need before you write a business plan.

A website maybe? There are certain quarters whose view is that ensuring everyone has access to super high-speed broadband so they can start trading online is the key to ramping up UK entrepreneurship. Nice to have certainly, but not what a start up needs first.

Start up capital then? Yes, that will be important - in fact, cash and working capital will be vital by the time you start trading, but it isn't what you need first.

So it must be training or advice about selling and financial management, you're thinking? Not even close.

OK then, surely the one thing you need in place first is the product (or service) you're going to sell, and a really good one that you're chuffed down to your toes about.

Yes, now we're getting close, but a product isn't the most important thing to have first.

There is one thing which you must have, be absolutely clear you understand, and be 100% certain you know where it is, before you make any decision to start a business or diversify your existing firm. So what is it?

A market to sell to.

A market comprising a sufficiently large group of prospective customers who are prepared to buy something they need. A market you believe your new business can provide a service to. An identifiable bunch of individuals, businesses, or other organisations that are ready, willing and able to pay for a solution or benefit that will meet their needs.

A starving crowd, as they say. If you haven't found one first, there's no point in having a product, a business plan, a website or a pot of working capital to throw at your little venture.

Banks, accountants and enterprise agencies will tell you that the one thing that's almost certain to be missing from a business plan or start up prospectus is an indication of or understanding about the target market and prospective customers the business will sell to.

Finding a market, or a gap in an existing one is what is needed first if a new venture has any chance of success. Finding a product or service to satisfy that market, and planning how to deliver it then becomes a lot easier and clearer.

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