So, you’ve had a eureka moment and the USP for your (imagined or otherwise) product will conduct billions of pounds in revenue overnight… right? Often, people jump into business too quickly without knowing how to survive in the tough early years.
However fantastic your product or service is, you need a way to make people aware of it, and a way to produce enough of it to keep up with demand, and often this is before you have been paid for anything.
Considering that 50% of start-ups fail in the early years, it’s clear that a lot of entrepreneurs become enticed by the possibility of being one’s own boss before considering everything else that comes in that package.
So, we’ve pulled together a list of things to carefully deliberate before you jump in at the deep end.
Market Research Is Your First Port of Call
Is this a winning idea? Of course it is, because you would buy it, I hear you say. But to succeed in business, you need to be able to easily manufacture and distribute the product and still make a profit on top of what that will cost.
Will people want or need your product enough to pay a price that means you are able to get it from the production stage into their homes and still have a healthy margin?
Before taking any action, market research will be key to finding the answers to these questions. Your idea may actually have been considered before, but was deemed not to be viable by another business-minded individual. Take a look at your competitors; are they offering anything similar to your idea?
What is unique about your product that means your business be able to sell more than them? If they’re not selling anything similar, then why not?
As well as researching your competitors, ensure that your target market is appropriate by seeking out potential customers and asking for their opinion.
The easiest way to achieve this is to organise a focus group in which you encourage individuals to give their frank judgement and ideas for how you may improve your product and tailor it (and its price) to their needs. Remember to discuss the packaging and branding that you have used, as you only get one chance to make a first impression and be remembered.
What is Your Plan?
This is a mistake made far too often – jumping onto the wagon without a business plan is like walking around a minefield. Blindfolded. Don’t do it! How are you to have assessed the profitability of your proposed business without projecting forecasts of expenditure and profit?
Have you considered how much time and money will be required to set up a website, advertise to your target market and create your product (along with storing it if this is needed) before any profit can be made? How many people will you need on your team to successfully bring your product to the market?
All avenues must be considered before you set up your business. Especially if any investors are needed for your start-up, you won’t be taken seriously unless you are able to present them with a coherent business plan that demonstrates the success you know you are capable of.
If you are unable to get your head around the figures, setting up a business alone may not be for you. Be aware that you will be required by law to fill out various returns to HMRC as a minimum, so unless you are able to hire an accountant or an advisor who can teach you how to complete these then you could be heading for serious trouble.
Recommended article for advice on planning: How to create a strategic business plan for emergencies using SOSTAC
Make Your Mark
Take your time deciding on the name of your business. It is common sense that people need to be able to recognise and remember the name of your company with ease if they are going to be potential customers or suppliers. You will need to design a logo, print professional letterheads and business cards and register the domain name, so if you change your mind afterwards you will have wasted valuable time and money.
Ensure that as well as your name being attractive to customers and investors alike, it’s not too similar to any of your competitor’s names. Also do some research into making certain that nothing unsavoury pops up when you type it into a search engine!
If your idea really is brand new, get it patented for free, before anyone else catches wind and has the opportunity to use your idea.
Pick Your Allies
Starting your business as a sole trader doesn’t mean that you can do it all alone. You will need to build relationships with suppliers that are affordable (and more importantly, reliable), as well as distributors.
It is also a good idea to be endorsed by those who are already taken seriously by your target market, so building rapport with these individuals will validate your company for new customers.
Don’t think that you have to go it alone. If you decide to choose partners to share your workload, ensure that they are individuals that you trust, and that they share your goals of bringing the business to a position of profitability as quickly as possible.
These should be selected carefully – the best way of succeeding is to hire people who have skills that you might lack, so that you can aim to pool your knowledge and experience. This will put you in good stead to be able to deal with any eventuality that you are faced with.
Make Yourself Known
Of course, the first step towards gaining a customer base will be brand and product recognition. You will need to invest some time (and probably money) into building up followers on social network platforms, which should be done as soon as possible so that when you launch your product you already have a loyal customer base to help you spread the word.
A website should also be set up, making yourself accessible and approachable. This should be easily accessed from mobiles and desktops, easy to navigate and easily understood.
Ensure that everything on your website corresponds fluently with the logo and brand that you have designed – this goes a long way towards making a professional impression. You should also be certain that the host you are using is reliable and that your site loads quickly (this is easy to check with a quick search online).
Are You Sure This is Worth It?
When you have had a fantastic idea, it is normal to be excited (after all, without passion you are unlikely to succeed anyway), but this makes it easy to overspend with no return in the long run.
So before you plough all your savings into this project, be certain that you have assessed it’s worth properly and that your business plan is in place, projecting profits in a reasonable timeline.
You should be aware that being an entrepreneur is not a 9-5 job, or even a 9-9 job. In the early days especially, you will find yourself putting more hours in than you would any other pastime, and often without any return to show for it for a long while. Perseverance will be key to making a success of your company, as it won’t be easy.
Many entrepreneurs find themselves caught up in a ball of stress that is harder to escape the more time you have invested into striving for success.
The most important thing to note is that if you don’t look after yourself you won’t be able or willing to continue with your business. Ensure that you have a network of people that you trust around you, and listen to them when they say that you can take a day off for yourself.
Are You Cut Out for This?
It takes a specific kind of person to bring an idea, however brilliant it is, into reality. An entrepreneur needs to be able to talk to peers, suppliers, customers and employees alike fluidly, to negotiate the best deals possible and create enough rapport to ensure repeat business.
This is especially important in the first years of opening your business as without an established background, suppliers, investors and even customers are taking a chance in trusting that your product is worth what you say it is.
Spend your time researching businesses that have failed and make sure that you aren’t likely to make any of the same mistakes.
A lot of novice entrepreneurs give up once they start to question their product. How will you handle a customer demanding their money back, or reading a bad review online?
A thick skin will be essential to your success.