When businesses come into existence there are two types, those which have sound financial backing and those which are being established on a shoe string. Regardless of the financial situation the focus is to get the product, or service, developed to closely match the customer requirements as quickly as possible, and then grow the customer base. Here are my top tips for turning the “work” into a “business” and for setting the business up, to grow out of the survival stage.
Against the backdrop that around 30% of businesses fail in the first two years and 50% in the first 5 years, it shows that many businesses fail, as the idea is not sound, or the owner simply runs out of cash as the revenues are not secured.
What makes your business different?
Why should anyone buy what you provide and if so, what gives you the “edge” on what others provide? For a new business, being very clear about what you provide is essential. If you are entering an existing market, you should aim to provide something special within it, which nobody else is doing, and if you are creating a new market, you need to ask yourself, if the market really exists.
Tip 1. Define your offer precisely and know who will buy the offer.
It is all well and good knowing who will buy but unless they are aware of you they will not become clients, so the lines of channels of communication need to be opened. There are so many channels these days, working out the best channel can take a bit of time and the optimum channel might be changing as you do.
Tip 2. Optimise the channels to market.
After the initial excitement of establishing the business the moment of truth arrives when you must deliver. Even with meticulous planning, there will be unexpected setbacks and turns. It is well worth getting a mentor, or some support to act as a sounding board. Just an hour or two per month will help keep you on track and keep you focused.
Tip 3. Get external help, even if it is only a few hours per month.
If at first you don’t succeed
In the lean start up method, adaption and change in response to an action is the name of the game. Unless you take action then you will never really know what the response is. If you are a procrastinator or detailed planner, you still have to test the responses. Don’t be afraid to fail. Learn from the errors, learn and move on. The characteristic of taking a risk is fine at this stage of a business’s development (there is virtually nothing to lose). Taking risks at this stage underpins your knowledge later when the business is trying to grow more.
Tip 4. Learn from the mistakes you make, but don’t be afraid to make mistakes or changes to the plan.
If you don’t know what you are aiming at, you will not have something to aim for. Set some simple goals. The goals should beat the requirements of your survival budget. Those who have started businesses often say they earnt half what they expected in twice the amount of time they thought it would take.
Tip 5. Have some financial goals and a contingency plan.
After a year for trades and a couple of years for service providers, your work should be beginning to build. You should be considering employing staff or outsourcing to grow the business.
If you are ambitious and would like support to move your business swiftly through the “survival” stage or set a plan for growth having survived the initial phase, then please request a no-obligation “health check” to discuss what assistance is available from Business Doctors. http://ow.ly/H4rc30jfQIu