Starting a business can provide you with a more rewarding life, but there are no guarantees. The start-up survival rate remains low. Estimates vary, but up to a third of new UK businesses are believed to fail in their first year, while more than half fail within two. However, the good news is many new businesses do survive.
If you take care of key start-up tasks properly and in the right sequence, you can get your new venture off to a great start.
Decide which type of business
How much time can you afford to commit and how much money would you ideally like to earn? Be honest and realistic. Answering these fundamental questions will help you to decide whether you need to start a full-time, part-time, spare-time or possibly even a seasonal business. Do you start a business online or offline?
Decide when to launch your new business
You might want to get your business up and running quickly, but if you don’t address key start-up tasks first you risk setting up a business that’s doomed from the start. That doesn’t mean you have any time to waste, but it does mean you should be realistic with your expectations. Fortunately, businesses can be set up quickly. Timing is important, so start your business when demand for your product or service is at its strongest.
Boost your start-up knowledge
Find out what starting and running your own business really involves. There are excellent websites that offer free advice to start ups, including Business Link, Start Up Donut, Smarta and Startups.co.uk. Other sources of advice include your local enterprise agency and your bank. The best way to learn is from those who’ve ‘been there and done it’, so seek tips from other small-business owners. Some people use the services of an accountant when setting up a company, which can help to ensure tax efficiency. As well as taking care of returns, accounts and tax-related administration, usually for a monthly fee, a good accountant will provide sound advice.
Decide who you’ll sell to - and how
It’s unrealistic to expect your products or services to appeal to everyone, so focus on a specific type of person (i.e. your target customer) and tailor what you do to their needs. Segments of markets are called ‘niches’ and success is normally assured if you can become the number one supplier within a niche market. Once you know who your target customers are, think about how they buy. Do they shop online, offline or both? You need to know exactly how you will get your product or service to your target customers. Find out more about getting customers in our customer base guide.
Think of a great new business idea
Great ideas are at the heart of all successful businesses. Coming up with a new idea could provide the basis for a hugely successful business. You could spot a gap in the market or your business might seek to solve a problem that affects you or others. You might create a product or service that works in conjunction with another popular product or service. Search online for inspiration (websites such as Springwise are well worth a look). Even if you plan to enter a well-populated market with a ‘me-too’ product, think of original ideas that will differentiate your business and provide added appeal.
Weigh up your competitors
If you are to stay ahead of your competitors, you must know who they are, what they offer, how they sell it and how much they charge. Focus on their strengths and weaknesses and think about ways you could outperform them. A word of caution: don’t compete on price alone, because it might not be enough to tempt customers away. And don’t think your idea is so special that you won’t have any competitors. You will. You just need to be better than them.
Seek feedback from potential customers
Even if you think you have sound knowledge of potential customers, go out there and meet enough of them to ask them about your products and prices. This is the best way to test your idea. If they don’t...