Launching a new startup is a huge undertaking, and the list of things to consider can be overwhelming. That’s why we’ve pulled together 10 things to do before launching your own business:
1) Play to your strengths
The chances are, as a fledgling entrepreneur, you’ve spent a lot of time thinking about different business ideas. But you ultimately need to narrow it down and make a decision about which direction to take. When doing so it’s worth considering what are your key skills and aptitudes; what knowledge and skill base can you draw on for your new enterprise?
2) Find your USP
So, you’ve settle on the are in which you plan to set up your business. But can you answer that all-important question: “What makes your business different from all the rest?”
Answer that question, and you’ve found your USP (unique selling point). One problem can often be that there are already established businesses in your area who can provide services on a larger scale than you. But you can use that to your advantage. Perhaps the fact that you’re a solo entrepreneur or small team means that you can provide “bespoke services from a master craftsman with a focus on sustainability”. That sounds so much better than “one bloke in a shed making products that are much more expensive than mass produced items” doesn’t it?
3) Do your research
Who are the main competitors in your niche? It doesn’t necessarily matter if it’s a crowded marketplace as long as you have a strong USP.
When researching your business idea, search for communities of consumers relating to your area. What are the main pain points consumers want solving that you could provide solutions for?
Learn who your audience are, taking in factors such as:
- Social economic background
Consider factors such as how they communicate. Are they all on Twitter, or is email the best way to communicate with them?
Geography; what areas of the country/world are they in? Are you targeting audiences in a specific location like an estate agent might be, or is your audience spread around the world?
4) Design and plan your marketing strategy in advance
No matter how good your idea is, you’re going to need to run ongoing advertising campaigns to keep new leads coming in, raise brand awareness, and advertise your services.
Do research into the main advertising mediums for your niche, what works for your industry and what doesn’t. Ask questions such as, are short or long-term campaigns the way to go?
Once you know the kind of campaigns you are going to run, you should investigate the cost of running them and scope out the agencies and platforms that will help you get your campaigns off the ground.
OOH ads reach a broad audience and have a strong impact on purchasing decisions and brand awareness. They also make your business look legitimate as OOH ads are often associated with more established brands. The fact that the cost of outdoor advertising has come down significantly over the years and is now with in reach of small businesses and startups means you can amplify your impact at a time when your resources are limited.
5) Test the water
If you are a full-time employee, perhaps you’ve started running a side business that you’d like to transform into a full time project. This actually works in your favour. You are essentially road testing products and engaging in market and customer research in the best lab your can find; real life. What have you learnt from this experience that can help when you finally take the plunge and quit your day job?
If you don’t already have a side project on the go that you’re eyeballing for a potential full time enterprise, create a sample product or two to test the water. Set up a site and social media account and see how you get on marketing and selling it.
6) Create a business plan
This may seem an obvious point but it’s often overlooked. Although it’s unlikely that your business will follow the exact path outlined in your business plan, it provides a way to focus your mind, come up with concrete goals to shoot for, and plan your finances in advance. This is also a great way to secure investment by showing potential funders that you know exactly what you’re doing.
7) Scout for talent
The younger an organisation is the more crucial it is to have a trusted team of talent to draw on. You may not be able to afford to take on any paid staff right now, but when your business starts to grow it’s helpful to have a list of go-to people to approach to help with expansion. Timing is very important and there are often times when you just need someone to get cracking on a new task. Create a list of people who you know and people you meet whilst networking who you could approach at some point in the future. You never know, that point could come quicker than you realise and you need to be prepared.
8) Find the right business structure for you
There are various different legal structures that you can adopt and you need to chose the right one for your business. Are you setting up your business on your own? Then you’ll probably want to register as a sole trader. Perhaps you’re going into business with a friend or colleague? Consider setting up a business partnership.
A limited company is most often for a larger group of people going into business together, although it can be done as a solo operation. It requires a named person for the roles of Director, Shareholder, and PSC (person with significant control), for example a person owning over 25% of the company shares. This is the most involved of the company structures, and it’s not right for every business; but you never know, it may be the most appropriate form four your business to take.
9) Sort out your finances
You need to have a realistic expectation of how much your business will cost and have 100% certainty that you know where that money is going to come from.
Don’t embark on an aspect of your business if you don’t have the money to sustain it. Build up reserves of cash wherever possible. If you already have a regular flow of income, set aside some of it for contingencies; you never know when you’ll be bit by a surprise bill, have a major client drop out, or have a supplier raise their prices on you.
Check out this guide to basic business finances for more advice about money management and defining your strategies for growth.
10) Have a fall-back plan
In the unfortunate event that everything goes south, you don’t want to end up stuck with a warehouse full of products that you are unable to sell or a mountain of debts you can’t pay off. Before starting your business ask yourself, “if everything goes wrong and my business fails, what’s the worse that will happen?”
You need to consider the question seriously and know what the honest answer is. Maybe you can sell off your capital assets so that you’re not left with a massive financial loss. This is where it’s important you didn’t tell your boss to shove it before going solo, because you may need to ask for your old job back if things don’t work out.
Starting a business is a serious undertaking but in many ways it’s never been easier to do so. Many new businesses begin lives as internet based projects until they have the capital to expand and today there are more ways to advertise your services than ever before.
These ten steps won’t guarantee success, but there’s one thing we know for certain: failing to plan is planning to fail.