It is all very well having a good idea about the type of business you are interested in establishing. But taking that good idea and turning it into a reality takes a large amount of planning, initiative and the ability to deal with the unforeseen.

So, what are the costs - both expected and unexpected - which you should bear in mind when looking to start your own business? "It very much depends on the type of business you are looking to go into," says Mr Pat Delaney of the Small Firms Association, which represents more than 8,000 small enterprises here.

"Rents, wages, the cost of raw materials and the amount of finance you need from the bank will vary considerably depending on the type of business involved." The cost of renting a premises is, however, a key consideration, he says.

It is important to make sure you do not rent somewhere that is too big for your needs, as commercial property is usually rented according to its size per square foot or metre. Given this, if you have too much space, it could seriously affect your profit margin, he points out.

Secondly, Mr Delaney says it is necessary to establish a clear continuity of supply from anybody providing you with goods or services. Any breakdown in this chain can, unfortunately, lead to unforeseen costs.

Wages and other overheads such as water rates, insurance, and local charges, also play a huge role in the profitability of any enterprise, he adds.

However, it is important to bear in mind that many of the costs associated with setting up an enterprise can be offset against tax. So while accountancy costs might be a factor, they can also save money in the long-run.

But perhaps the most crucial consideration for anybody starting out with a new business is sound market research, Mr Delaney believes.

This need not cost a fortune, however, as local county enterprise boards are only too happy to offer feasibility study grants.

"Another very good thing to do is to go to a local college of marketing, go to the final-year class, and put up a bursary for the best marketing plans," he advises. "In this way, they will go out and do some very good market research, and you will get to choose the one you think is best." Once you have conducted good market research, the essential next step is a solid business plan, which should be no longer than six to eight pages, he believes.

"The key is not to see it as an epic tome," Mr Delaney advises. "But you should be able to display detailed research into your sector, and information like your expected turnover. No bank will expect you to turn in a profit in your first year." As head of the small and medium enterprises (SME) unit of Bank of Ireland, Mr Michael Gannon is well used to reading and assessing business plans from budding entrepreneurs.

Set up to deal with start-up businesses, his unit contains staff who are only too aware of the many pitfalls in the sector.

Business plans are, he says, "absolutely fundamental" for businesses and banks alike.

A good one will, he says, contain a short description of the business itself; details on the people behind it, including their background; the projected financials going forward; and "some sort" of sensitivity analysis.

By this, he means that companies should make an allowance for the fact that their business might not make its projected sales and/or turnover as quickly as it hopes.

While most entrepreneurs have a natural optimism, something which he believes is essential when starting out, he says the ability to adapt to change, particularly if turnover is not proceeding as well as had been hoped, is crucial.

"The first six to 18 months is the most vulnerable time for any new business," he says. "Only 40-45 per cent of businesses which start this year will be in business in two years' time." This may be for a variety of reasons, he says. However, with regards to cashflow, information is king.

"A common denominator of businesses that fail is that managements don't have good information systems in place," he says. "Accurate management accounts to assist the decision-making process are essential."

He also points out, however, that it is not unusual for his team to listen to a business plan, highlight its strengths and weaknesses, and then ask those involved to resubmit their plan.

This extra time given to new companies is done, he says, as an acknowledgement that sometimes such companies need a more "personal" touch.

"There is no element of philantrophy here, though," he also points out. "It is a hard-nosed business decision. We want to see our investment succeed as much as you do."

Next week: Tax and pensions.