Transforming an idea into a profitable business takes passion, hard work, determination.. and usually, a little luck!
While there are many success stories – just think of the billionaire boss of Amazon who launched his business out of his parent’s garage – there’s no escaping the fact that many start-ups are sadly destined to fail (usually within the first few years).
So, what exactly is it that separates the businesses that succeed from those that struggle? While there is no magic formula and no business is guaranteed to hit the big time, there are four key pillars that can give you the strongest possible chance of success.
Create a solid business plan (and use it)
Having a solid business plan from the outset is vital. You may quickly find you’re so immersed in the day-to-day running of your business that you lose direction. Your business plan will help you think and act strategically – ensuring you are clear on your vision and what it’s going to take to achieve it.
A strong business plan will essentially work as a recipe for your business. It should outline the steps you need to take to make your business a success and provide you with the structure you need to stay focused.
One common mistake is to assume a business plan is only necessary if you want to approach a bank or lender for investment, but this couldn’t be further from the truth. A business plan is your blueprint for how your business will operate and navigate any challenges along the way.
To put together a comprehensive plan takes time and research, but it’s worth the effort. You need to understand your market and competitors, work out your costings and a pricing structure and know how you’re going to position your business and reach your target market. Just remember to use your plan once you have one and not just file it away in a drawer to collect dust.
Pay attention to your financials
Having issues with cash flow can quickly seal the fate of any new business. Whether they’re caused by a lack of sales, persistent overspending or poor financial planning, in business it can be all too easy for the money to run out!
It’s a problem that can affect any business in any field, but especially those enterprises with large start-up costs and overheads. For example, if you’re planning to sell a physical product then you’re likely to need to invest in some stock before going out to market. Which is why the second pillar of success is solid financial planning.
Getting to grips with your accounts and making sound financial decisions early on will put you in good stead to achieve sales and importantly profits – something every business needs to survive.
You’re likely to need at least some capital to get your venture off the ground – be it an investment in tools and materials, or the cost of a professionally designed website. Before splashing the cash, calculate how much you need to get started, then ask yourself where that money will come from. And within what timeframe you may expect to be generating revenue?
It can be beneficial to seek advice from a professional here, who can help you crunch the numbers and establish a business budget. Having your start-up costs together or a contingency fund in place before you take the plunge and start your business, can all be a sensible idea.
If you do need to take out a small business loan then speak to a professional advisor, don’t just try your luck with an online portal. That way you’ll be getting the best-fit finance for your circumstances, with expert advice and guidance on everything you need to take into consideration.
Deliver an outstanding customer experience
Now you’re up and running, you need to deliver on your promises! Customers are the lifeblood of your business after all and will ultimately influence whether your venture thrives or dies. As a business with no sales is not a business!
It’s vital that you treat your customers with transparency, respect and consideration. Do this and you’ll cultivate a positive impression that converts casual customers into brand ambassadors. Treat your customers poorly, however, and you put your future trading in jeopardy.
Today, it’s businesses that are authentic, human-centred and go above and beyond that retain customers. No one wants to spend their hard-earned cash lining the pockets of a company that doesn’t value them. Competition is fierce and can come from anywhere in the world thanks to the internet, so you need to be on top of your game.
Think about the companies you like and would recommend, what is it about the customer experience that has you hooked? Nowadays it’s common practice to leave reviews for businesses, products and services online too and also to seek our recommendations from peers. These first-hand accounts can powerfully influence the opinions of others. If you get the customer experience right, you’ll be well placed to capitalise on word-of-mouth, which remains the most effective marketing around.
In the digital age, a positive customer experience needs to extend to your website and all other online platforms too. Make sure every ‘touchpoint’ – i.e. every time a customer or potential customer may come into contact with you – is consistent.
Engage your target market
You may think you have the best product or service in the world, but if your answer to the question ‘Who will buy your product?’ is ‘Everyone!’, then you need to think again!
One of the biggest mistakes new business owners can make is failing to identify and segment their target customers. Not everyone with spending power will automatically want to invest in your product or service. The shopping habits of ‘millennials’, for example, can vary wildly to those of ‘baby boomers’ so it’s vital to figure out who represents your ideal customer and how best to engage them – essential knowledge you need to market your business.
While advertising in mainstream magazines and on television is beyond the financial means of most start-ups, today’s digital channels offer businesses the chance to publicise themselves for free (the ‘cost’ being your time and commitment to doing so). The key is to engage with the platforms your target customers are using, and in a way that they are likely to respond to. Being ‘human’ in your communications and how you interact really is key for social media.
Do your research, determine where you can make the most traction and concentrate on building engagement via those channels. Even if you operate offline, for example running a restaurant or a plumbing business, the digital space can be just as effective at driving customers your way. Just make sure you foster relationships with your target demographic because it’s attracting the right customers that counts.
Expert advice for your start-up business
At ASfB, we specialise in supporting business of all sizes to achieve their growth ambitions. Our end-to-end outsourced accounting solutions, leave founders to focus on what they do best – running the business – while we take care of the rest.
Call our friendly team for a chat on 01202 755600 or email email@example.com.