Whether your sights are set on running a marathon, decorating your home or growing a business, preparation is key.
So what do start-ups need to put in place to have the best possible start?
1. A plan
The kind of plan that really gets a business off on the right footing involves so much more than the kind of business plan you might show your bank manager when looking for a start up loan. It needs to map out the road for the next year, three years and five years. A truly useful plan covers all aspects of your business, not just finance. It will contain specific goals and actions to implement. And most important of all, it is a living, breathing document that you refer to and act upon regularly. If it isn’t, it’s not worth the paper it’s printed on.
2. A clear purpose
Before you even attempt to push off the starting blocks, get crystal clear on the purpose of the business and the values that you align with it. Starting up a business can be a slog and it is important that you stay inspired and motivated. Once you are clear on your purpose and values, make them known: send the right message through your branding and marketing, in fact, all of your communications!
3. Know your business
It is vital that you understand what business you are in. Many start ups make the mistake of selling “features and benefits”. It is not about specific characteristics of a product, but about what you can do with it: what problems it can solve. Start thinking like a customer.
To be successful as a start up, it is almost always the case that you need to focus on one core business. It is of course tempting to try different ideas and offer everything to everyone – but this is not a model for a successful start up. Once you are on your feet, then you can start to think about diversifying. But make sure your main business is mature, well structured, stable and systematised before you start casting out tentacles in other directions.
5. Know your market
To understand where the best business opportunities lie and how to get the most out of them, it is crucial to research the market. Many new businesses cut corners here as they think market research is for larger organisations, is almost certainly very expensive and often useless. The truth is, it is possible to do it yourself in a cost-efficient and practical way. First of all, there is no need to research everything. Get clear on the objectives ie. what decisions will be made on the basis of the findings. Use secondary data whenever possible: it is faster and cheaper than collecting your own. When you do need to collect data yourself, steer clear from the so-called “collector bias” – hearing what you want to hear rather than what actually is.
In the early days, spend 70% of your efforts on marketing and the rest on production and operations. Many new entrepreneurs wrongly assume that if they have created a perfect product, it will sell itself. If they are astute, they quickly learn that this is not the case. If they are not, they will get nowhere fast.
Successful companies not only know what they do and how they do it but also understand and articulate why they do what they do. Behind this is being absolutely clear about what you believe in: it is about core purpose, why the company exists. Ultimately then what you do is simply a validation of what you believe in. This is your USP. When a customer buys what you believe in, price is never an issue. Stay away from competing on price.
Surround yourself with the right people from day one. It is almost always a mistake to rely upon family, friends or volunteers because they are easy or cheap options. It is important to understand exactly what roles and skills your business needs and to hire accordingly to complement your own skillset.
Ensure the scalability of your business model. How will you cope as your business grows? It pays off to put the right company structure in place from the very beginning. Then it will be just a matter of adding more resources rather than rethinking the entire business model when the volume of business increases. All functions and processes should be systemised and recorded to make sure that new employees can be easily trained and the success is repeatable. It is impossible to grow a business that revolves around a small number of “irreplaceable” people as there is a limit to what one person can do in any limited period of time.
Finally, don’t ever feel like you need to struggle along on your own. Make use of all the support available, be it finance, advice or hands-on practical support. For example, if you are investing in research and development, there are tax credits available. Many organisations offer free information resources for new businesses – check out your bank for that. A good accountant will go beyond preparing and submitting your tax returns but will also help you understand your financials. Although there is a lot of free help available, engaging with a professional business advisor can fast forward your business through the difficult start-up period. Not only you will get advice specific to your business, have clearer focus faster and avoid common mistakes – you will also be held accountable for taking this advice and acting upon it. Knowing everything doesn’t get results. Doing is what matters. Lastly, don’t try doing everything yourself. Focus on what you are really good at and delegate the rest.
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