How to start a business.
You’ve had your next big business idea and you’re excited, but you don’t know where to begin. How do you actually start a business? Well, first there’s a few things you should do before you even think about pouring money into your next adventure and kicking things off. To help us give you the best advice, we asked business owners who have been through it all for their best advice when it comes to starting a business.
1. Ask yourself what it is you really want. Before you do anything, ask yourself what it is you actually want. Why are you trying to start a business in the first place? Are you starting a business because you want to make more money than you are just now? Or is it the case you’re just looking for a way out of your current job? Do you want to be making double your current salary in 2 years’ time?
You can’t expect to be successful if you don’t know what success actually looks like to you. Are you happy to make big sacrifices for weeks, months or years in order to achieve your dreams or are you really just enamored with the idea of an exciting project or idea in the short term?
2. Define your business idea. Though this may sound obvious, it is a crucial first step in determining the outcome of your business. You must define your business in the wider context, which means pinpointing where your business is positioned within the market. Is your business a niche within the market? If so, great! But make sure you ask yourself, why is that? Are you pioneering this idea or is it the case that your idea is just not feasible, hence the lack of competition. Will your business have many competitors? If you are about to open a coffee shop, are there already lots of coffee shops within close proximity? Again, this may sound obvious, but too many entrepreneurs are so wed to their business idea that they forget to objectively analyse their business within the context of the local market or the industry as a whole. If the market is saturated, then you may not be able to achieve your business’ full potential. Competition can also be a good thing of course, and consumers can never have enough variety. It goes without saying, however, that if you are entering a market with steep competition, you need to be confident that your product is able to challenge competitors or at least provide a service or product that differs slightly to that of competitors.
Now, you may well have a strongly positioned product or service with a lucrative target market, but it may not be the right time to enter the market. You should think about the state of the current economy and what implications this might have on your target consumers’ behaviour. Check whether now is the best time for you to start up your organisation, though it may be frustrating, holding off for a while may give your business a better start and thus a better chance of survival.
3. Determine your brand’s identity. Making sure everyone at your organisation has a crystal clear understanding of your brand’s identity and your brand’s image is vital. This will ensure that everything you do—from maintaining a consistent brand design to creating your organisational culture—is congruent with the brand’s identity. By communicating your understanding of the brand’s identity, you will make sure that as your business grows, the brand’s image will develop and evolve as you intended it to. As the brand’s image becomes stronger, you will gain greater brand equity, which is the secret ingredient of most successful companies. A good way of communicating your brand’s identity is by designing a creative brief or drawing up a mission statement and incorporate it into the training of your employees and the everyday operations of your company.
4. Plan, Plan, Plan! This cannot be stressed enough, but before embarking on the hectic and daunting life of a start-up entrepreneur, it is pivotal that a plan is made of what it is you hope to achieve and what you’ll do if things perhaps don’t go as planned. By creating a clear roadmap, you will be able to check if you are on the right track and avoid being caught up in a blizzard of work without a sense of direction of where is forward. Having a clear roadmap can allow you to assess whether or not the actions you’re taking will contribute to your overall goals. This is also the case if your business is failing. When creating a plan, a sense of tempered optimism will take you far, but it is also important to create a contingency plan. Remember, contingency plans don’t have to mean your business is failing, it could simply indicate that you are heading on a slightly different path than you imagined.
5. Talk to an expert. If you’ve never gone through the process of starting up a business, speaking to an expert could be one of the best decisions you’ll make. This could be an expert in the field you’re looking to go into, in which case you could receive invaluable advice on the feasibility of your business idea along with some crucial tips of the trade. Or, you could get in touch with a business expert, someone who may not have any experience in your industry but knows exactly what it takes to start a new business and make it work. A good starting point is to check out Business Gateway (https://www.bgateway.com) who have wonderful resources and advice on getting started - they even have reports for specific sectors!
6. Choose the right business structure. This is perhaps one that fewer people tend to think about. Which business structure is right for you? Different business structures have very different rules and regulations. For example, here at GPET, we are company limited by guarantee, which means that the people running the business are not personally liable for any unpaid debts. There are many implications of the structure you choose for your business which can impact the growth and development of your business, choosing the right structure is important to getting off on the right foot.
7. Location. The experts we spoke to all had this one in common, with many of them lamenting just how often they’ve seen perfectly good businesses flop due to poor location planning. Particularly if you are in the service-based industry, is the area and location of your business congruent with your target audience and the kind of service you provide? Are you setting up a gourmet sandwich business in an industrial estate? It might not be quite so obvious as the aforementioned example but if you are setting up a store, reducing the distance between the customer and the location is desirable. Another consideration is whether or not you’ll be setting up your business online or offline. E-commerce certainly has numerous benefits but the rife competition online means you’ll have to be going into the online market equipped with a solid digital marketing strategy if you want to compete.
8. Be realistic. Start by identifying what your business resources and requirements are; you will start to get a clearer picture of the costs involved in running your business and therefore the business’ feasibility. Sometimes entrepreneurs are so involved in the concept of their new business, they overlook the costs involved in making this happen. Although it’s never a nice thing, realising your business idea is not feasible early on can save you a lot of pain and money further down the line. Knowing what is required will also provide you with a better understanding of how your business will operate. This will allow you to begin thinking about your company’s strategy and how you can give your company an advantage both in the external and internal running of the business.
Nevertheless, being realistic doesn’t have to come at the expense of being optimistic. Keeping realistic expectations will help you to keep on track and not be railroaded by perceived failures that were unattainable in the first place.
9. Ask a friend. This is a simple step but asking a friend or family member if they think that your business idea has potential can be really helpful. Getting input from someone with an outside perspective can be helpful as they may spot something that you haven’t yet. Sometimes family members can be the most brutally honest, so it’s worth asking them for their honest advice.
10. Fund your business. Once you get your start-up checklist ticked off, you’ll be looking to get started. For most business, that will mean getting funding first. Depending on the nature of your business, you’ll be eligible for different funding. For example, you may be eligible for a start-up grant or endorsement. These are usually found through university and government funded schemes which support small business that can stimulate the economy. Another option you may take is offering equity in exchange for finance and investment. By doing this, you will exchange a share of your business and in return will you will have the funds to get your business off the ground. Alternatively, you could apply for a business loan which could be ideal for companies confident in the return on investment. This is especially true for those low interest loans, which offer a more secure financial option than may be available elsewhere.
11. Get to work. Literally. Depending on the nature of your business, you may be able to work remotely. However, most businesses once they establish themselves will need a place to work. For many start-ups, getting an affordable workspace that is right for them can often be challenging. You ought to do your homework before committing to an office space that costs an arm and a leg and potentially doesn’t have what you need. Shop around and make sure you have the right environment to get your business off on the right foot. Remember, it’s all about what is right for you and your business, but having the right space can go a long way in the efforts to grow from a small start-up to a larger, more established organisation.
There’s no secret trick to starting a successful business but getting the basics right is essential. Without a solid plan and a solid foundation, even the best ideas can fail! Starting a business can be scary but it is probably nowhere near as difficult as you might imagine. Besides, support is available if you need it.