Starting a business and making a success of it is not easy. But there are certainly ways you can aim to maximize your chances of success.
1. Find a unique selling point.
The number of possible company models is infinite. If you are an imaginative thinker, you can set up a company which will have no competition, for the simple reason that yours will be the only one offering a particular niche product or service. Your knowledge of a particular business sector can help you identify these niches.
Alternatively, in professional occupations, your qualification level can allow you to stand out from the crowd. Imagine if you are a qualified financial adviser or lawyer starting a new company of your own, when you are one of the few people in your home town who holds a particular qualification.
2. Write a fantastic business plan.
A bank, or anyone else contemplating providing you with start-up finance, will almost certainly want to see a comprehensive business plan.
A good business plan should include:
- The activities you will carry out
- The marketing methods you will use
- Whether you intend to employ staff, and in which roles
- Where the business will be run from, e.g. your home, an office, a warehouse
- Realistic and detailed financial forecasts
- Evidence of market research into the viability of your new company
3. Explore as many sources of funding as possible.
Hopefully any loan application to your bank will be successful. But don’t stop there – look at other sources of funding such as business angels, crowd funding, asset finance, local authority grants and government schemes such as Funding for Lending.
4. Launch an extensive, tailored marketing strategy.
Marketing can be an expensive activity, but spending money on this may be necessary when you start out. Remember that no-one has heard of your company at the outset, and that your bank loan or start-up capital will only last for so long. You need to sell your offering, and so you need to tell people about what you can offer as soon as possible.
The ‘marketing mix’ comprises four Ps:
- Promotion – where is it appropriate to advertise?
- Price – what is a competitive price for your product or service? Can you hold an introductory special offer?
- Place – how are you going to distribute your offering? Could you benefit from distributing it in a way that no-one else does, e.g. offering a home delivery service for something usually sold in shops; or developing an online version of an established service?
- Product – why is your product or service so good? What makes it stand out from the competition?
Consider carefully who your target market is, and think about which marketing methods they are most likely to respond to. Certain sections of society are unlikely to be swayed by an internet campaign, while others may be unlikely to notice advertisements in the local newspaper. Customers in some market segments may be swayed by your pricing levels, while others may consider getting a quality product or service to be more important.
Think carefully though before you engage a web designer to construct an expensive website full of fancy features and graphics. Many companies do this, then find that they get very few enquiries via the site. If you decide to have a website, there are a number of basic, cheaper alternatives.
5. Get to know your business sector.
Ensure you understand the business sector your company will operate in before you start. For example, how are services typically provided; what is a typical price for a product or service; and what do customers expect? What permissions and authorizations will you need?
6. Don’t incur unnecessary expenditure.
Having enough cash to keep the company going is vital in the early days. We have already looked at not spending too much on marketing methods that are unlikely to work, but also consider:
- Operating the business from home at the outset, rather than renting an expensive office
- Using energy-efficient appliances
- Shopping around for the best prices on everything from utilities to insurance and stationery
- Using Skype for phone calls
- Using a cloud computing service to store data, rather than buying your own server
7. Seek advice.
Entrepreneurs often have a wide range of different business interests, and sometimes they are not an expert in every single field they enter into, However, they often affect a business partnership with someone who is. Having a business partner may not be practical for you, but if not, at least think about where you can obtain expert advice.
General advice on business skills may be available from the Business Manager at your bank, or on other websites. You may also need an accountant and a solicitor.