As we noted in our last blog more than two thirds of the new jobs created since 2008 are people registering as self employed to set up in business for themselves.
There is as yet no information on why. It could be that they felt they had no alternative after redundancy, especially if they were older people who calculated that the odds of finding another job were less than favourable. Some may have dreamt of becoming their own boss. Some may have jumped before they were pushed.
A few will undoubtedly be people with a strong entrepreneurial streak and an innovative product or idea.
One thing all business coaches say is that to run your own business requires passion and commitment, market research, a business plan and sound financial management.
Any plan will include analysis of the market and assessing the competition, without which it is difficult to know if a business can succeed.
Once a plan has been produced, a focus on bringing in business and satisfying customers tends to involve doing more of what works and stopping doing what doesn’t. This needs constant vigilance and regular monitoring to make progress towards goals in the plan.
Revisiting the business plan is more like checking the map to make sure you will eventually get to where you are going. Sometimes when conditions change or opportunities arise you have to fundamentally change your goals and also your plans. There is no strict formula for a plan but having a goal and road map allows you to measure progress towards reaching your goals.
A survey of 1000 SMEs carried out by Bibby Financial Services recently found that one in four of SMEs cited increased competition as their greatest fear, yet all too many of them don’t have any goals and even fewer have analysed their market, let alone produced a plan.
One has to ask, how many of these new self employed businesses really had any idea what they were getting into?