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Starting up:
Your market, competitors and sales and marketing strategy

You need to fully understand the market that you're planning to operate in and any important trends and drivers. For example, if you were setting up a nursing home you would be interested in the demographics of the population, any government policies over the use of private nursing homes and the regulations with which you would need to comply.

You also need to know what your competitors are doing, and how you are going to distinguish yourself from them. You can do the research yourself, or you could ask us to do some research for you.

Related literature:

How do I find out more about my industry?

How do I find out more about my competitors?

From this you should aim to develop your sales and marketing strategy. You need to consider:

how you will position your goods and services in the market (eg a premium brand or as good value for money);

who your customers are likely to be, and how you can attract new customers;

your pricing policy;

how you will promote your goods and services (eg direct marketing or advertising);

the best way to distribute and sell your products (eg selling direct to the customer, selling wholesale or distance selling such as on the web);

how you will make the sale (eg through retail outlets, face-to-face, by phone or via a website).

A critical factor when you are starting up is the pricing decision. There is a minimum price that you can sell your goods or services for and still make a profit. Take the following example:

your overheads are £60,000;

you aim to sell 30,000 units;

you must make £2 per unit to cover you overheads;

each unit costs you £10 to buy and £3 to sell;

the minimum selling price is therefore £15.

You do not necessarily want to price your products at £15, however as this would only give you a breakeven position and if you sell less than 30,000 units then you would make a loss. You also need to consider: