The Apprentice returns to our screens tonight and no doubt as usual we’ll be seeing the candidates start a new business from scratch each week, so now seems like a good time to talk you through how I’d suggest you go about starting a business from scratch.

Firstly do you really want to start from scratch? Starting a business from nothing is damn hard work and it will often take quite a while to get established. One way of avoiding this is to buy a business that someone else has already set-up (if you’re looking at buying a failed business please read the post When Buying A Failed Business first). If the business is already up and running someone else has proved the business model, found the initial customers and developed the basic systems necessary to get the business up and running.

Alternately you can reach a half way point between a business from scratch and a extablished business by buying a franchise. A franchise will usually provide you with a proven business model, brand and a complete business system. The downside however, is that you’ll have to pay to license the business system, which is usually either a big up front investment or a percentage of the turnover/profit on an ongoing basis.

Personally I prefer to build my businesses from scratch so I know exactly how they work, plus I then get to do it entirely my way, which satisfies my inner control freak The main pro to starting from scratch is the complete flexibility it gives you, you’re not constrained to working a certain way and can rapidly adapt the business to suit the market as you learn what works and what doesn’t.

How to start a business from scratch

Starting a business from scratch involves numerous steps, but the main ones are:

1. Identifying a business opportunity or business idea – check out the post 10 Tactics For Finding New Business Ideas if you’re not sure how to go about finding business ideas.
2. Evaluating the business opportunity – check out the post Evaluating A Business Opportunity if you’d like help evaluating an opportunity or idea.
3. Determining how to exploit the opportunity.
4. Developing a plan for the business, covering:
• what the opportunity is;
• how big the opportunity is;
• what is required to exploit the opportunity;
• how you will go about exploiting the opportunity;
• how you can protect your investment.
5. Once you have a this plan (aka a business plan) you’ll need to decide how to raise finance (i.e. from your own funds, a loan or equity funding) and develop a plan for raising the finance.
6. Start implementing the plan! Exactly what you’ll do here will depend on the type of business and how you’ve decided to exploit your business opportunity.

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