Starting your own business can provide a wealth of benefits, but it’s not plain sailing. The failure rates for new businesses are high, and this is why planning ahead and being meticulous about the finer details are essential. If you’re thinking about launching a startup, here are some key questions to answer before you take the plunge. (Image Credit: Christina Morillo/Pexel)
How are you going to turn an idea into a business model?
Many people have ingenious ideas, but setting up and running a successful, profitable business doesn’t depend solely on a Eureka moment. To stay above water, you need to figure out how you’re going to monetize your venture and how you’re going to transform mental images and business plans into a workable, functional, efficient model. Before you take any further steps in the process, work out what kinds of services or products you’re going to offer, think about pricing and consider all the elements you’ll need to bring together to get your venture up and running. Some business models are much more complex than others and it’s best to be well-prepared.
Who is going to buy your products or services?
One of the most significant questions to answer when you’re in the process of putting together a business plan is who is your target customer? Create an ideal buyer persona and focus on that specific group of people. Everything you do, from the marketing techniques you use and the logo you create to your price points and the way you communicate with clients, should be relevant to your ideal customer. Once you’ve decided who you want to attract, for example, young people and students, homeowners or buyers with substantial disposable income, carry out extensive, detailed research to get to know your buyer and learn more about competitors that are already operating within the same market. Using the information and data you collect and analyze, you can start creating targeted, tailored marketing, sales and branding strategies.
Where are you going to base your business?
There are various options that may be open to you if you’re preparing to launch a new business. The first, home working, will not be viable for everyone, but it might be an attractive proposition for those looking to keep costs down. You could run an online store from home, or work from a home office if your business involves offering services like consulting, accounting or copywriting, depending on the scale of the venture. You might find that you start at home and then move to pastures new if the business expands and your income increases. If you do decide to base your business at home, make sure you have a space that enables you to concentrate and take care of operations without distractions or obstacles.
In many cases, having a home base won’t work. If you plan to employ a team of people, you need a lot of room, or your business relies on footfall, for example, it’s wise to explore options such as finding startup office space and looking at units to rent. Location plays a critical role for many businesses, but it’s not always a priority. If your venture doesn’t depend on passing trade and footfall, and you don’t need to be in the heart of a city or a financial or retail district, searching for premises on the outskirts could save you a huge amount of money. If you do need to be close to the action, it might be worth looking into the possibility of sharing premises with other companies or considering flexible working arrangements.
Who is going to work for you?
Some entrepreneurs are able to fly solo, especially at the beginning of proceedings, but others need staff from the outset. If you do plan to employ people, make sure you understand the cost implications and your responsibilities as an employer. Think about how many people you’ll need to hire and what kinds of skills, experience and qualifications you’ll be looking for. Many businesses offer long-term, permanent contracts, but staffing structures are becoming increasingly versatile, and it’s important to choose a model that works for you. If you’re expecting to enjoy seasonal highs and lows in terms of customer numbers and orders, for example, it’s beneficial to explore options like hiring staff on short-term contracts. This will save you money during the quieter periods and ensure you have the resources you need to cope during busier spells.
Outsourcing is an increasingly popular option for businesses of all sizes, and it can be a cost-effective measure for business owners that don’t want to hire a large number of employees on long-term contracts. Outsourcing involves working with external agencies, companies or individuals and it allows access to skills or services you don’t have in-house or on-site. If you run an office, for example, and your core objective is to sell products, you could consider outsourcing IT support. If you’re a healthcare business owner, and you run a practice or clinic, you might wish to think about outsourcing professional cleaning. The elements you outsource should enable your core team to focus on the fundamental foundations of your business.
When searching for people to work for you or looking for potential outsourcing partners, it’s wise to put hiring procedures and policies in place. Take your time to make a decision, think about what you’re looking for and search for individuals or agencies that complement the company ethos and the brand image.
How are you going to fund your startup?
For many aspiring entrepreneurs, this is the killer question. You’ve got a brilliant idea, you’ve got skills that are in demand and you’re ready to get going with a business plan, but where is the money coming from? The cost of setting up a business varies hugely, but every startup owner will have to spend money to get off the ground. If you don’t have the capital to do it yourself, or you’ve ruled out borrowing from family members, there are several options to explore. You could investigate business loans, you could search for a financial backer or an investor, or you could try and secure funding through entrepreneurial initiatives aimed at startups and new companies. It is crucial to ensure you have a detailed business plan to hand and that you’re familiar with the facts and figures before handing over a proposal to a lender or an investor. If you’re giving a presentation, practice several times and be prepared to answer tricky questions. It’s also beneficial to inject a bit of personality and share your story.
How are you going to stand out from the crowd?
Competition is fierce in every sector, and it’s no secret that the odds of a startup succeeding are long. This is why it’s important to stand out from the crowd. How is your business different and how are you going to persuade customers that you’re the best option for them? Work on your USP, and promote it at every opportunity. Focus on demonstrating and up-selling value, and show customers why and how your products and services are going to make their lives better. Even if a competitor is cutting prices, you can still boost sales by convincing customers that they’re getting more for their money with you. Customers are not always swayed by price, with many prioritizing quality, originality and customer service. As well as coming up with innovative products and services and promoting your USP, you can also use branding and marketing techniques to make your business stand out and turn heads.
How are you going to market your products?
You’ve worked out how you’re going to create your products, who you’re going to employ to sell them, who you’re selling to and how much you’re going to charge. The next step is to draw up a strategy to market your business and get people talking. Use the findings of your market research to identify effective marketing techniques and platforms and drum up interest before your product is available to buy. Create an email list, set up social media profiles and pages and share details of launch events or openings. Depending on the scale of the business and the type of product you’re selling, you could involve bloggers, influencers, media representatives and buyers. If you’re marketing a product line to users who are likely to spend a lot of time on social media sites like Instagram, for example, a clothing collection for young adults, it’s a great idea to contact influencers and people who have a lot of followers and ask them to feature your product.
Create and share content that will resonate with your target market, use communication channels to engage and interact with customers and select methods that are relevant to your target buyer and your product. For local services, for example, roofing, plastering, plumbing and window cleaning, it’s an excellent idea to set up a website and drive traffic using local SEO and sites like Facebook, as well as printing flyers and advertising in local newspapers and magazines.
Launching a startup is no mean feat, and there are lots of boxes to cross before you even serve a customer. If you’re thinking about setting up a new business, ask yourself these key questions first.