Top 10 Tips for Start-ups
So, you’ve decided to set up a business. You had a lightbulb moment one day while out walking the dog / looking at Instagram or gazing out of the train window at the rain-soaked fields. ‘That’s it,’ you thought, ‘that’s what I’m going to do – make that widget/ open that café/ sell that item no-one’s seen before.’ Idea sunk, the thoughts turn to what’s next. Funding the start up is probably on the agenda, perhaps you’ve booked on one of our excellent Finance for Start Up’s workshops or even attended one and now you’re well on your way to making the dream a reality.
(Find out more about our Finance for Start-ups)
The statistics of start up businesses that fail in the first few years is scary, so we won’t even go there, but what advice can we give you to help navigate the perils of the fledgling business landscape? Here are our top ten tips to help you take flight.
1: Evidence demand
How do you know there’s a need for the next widget, new café or lovingly crafted item? You have to do some leg work here. Yes, your idea maybe precious and you don’t want anyone else nicking it before you’ve got going, but don’t get too hung up on that. Chances are if you are at the stage of talking to people about your business you are much further on than anyone who might try to steal your idea. So, talk to potential customers, query suppliers, set up social media accounts to investigate the potential. Gather the responses, walk the streets for locations or trial the new prototype on some willing friends or family. You will start to get a sense of whether this idea is just pie in the sky or a potential goldmine – or possibly somewhere in between.
2: Think solution
Rather than thinking ‘what can I sell’? think ‘what will it solve’?. Most successful businesses start from identifying a problem first and then creating or finding the solution. The solution is what you sell. If there’s no identifiable problem in the marketplace then there’s no need for your solution.
3: Write a business plan
Ideas written down are far more likely to become reality than if they stay up in your head. We run business planning sessions and have a free template to help you put the ideas into words. Going through the areas of the business such as detail of the product, who the target customers are, how you will market it etc all help clarify and refine your business offering. Starting a business from an idea will often work in the short term but if the idea is fleshed out with a plan it will have a much greater chance of long term success. ‘Failing to plan is planning to fail.’
4: Get your finances sorted
This one is fairly obvious. Without some cash in the bank it’s going to be very hard to put down a deposit on premises, buy stock, or even set up a decent website. The first year of a new business is a steep learning curve. You will undoubtedly make mistakes and some of them can be costly. Working out what you will need to beg, borrow or save to start the business is important. We can help with an initial 121 meeting to look at what you will need and possible ways to fund it.
5: Know your costs
Having a projected cash flow for the first couple of years will help you see how viable the business is. Costing things out, seeing what sort of margins you can make, working out your breakeven point – all these will help you build a solid foundation. There are so many hidden costs in running a business, without properly evaluating these and just getting going you can run into serious problems. We offer financial forecasting sessions to help start you on the right foot.
6: Know the downsides
The dream becoming a reality is great – the first time you see your business logo, the first customer, the first sale, the first real cash in – they are all good feelings and make you realise why you gave up the day job. However, the first cash out, and then the next, the first complaint, the late nights, early mornings, responsibilities and worries, they’re the not so good feelings. In any business there are ups and downs. Being aware of what the downsides may be and accepting them as part of the process of running your own business helps you cope with them. Talk to people who’ve done what you’re doing, take advice, listen and decide if you can deal with the downsides as well as the ups – you’ll be better prepared for it then.
7: Get professional help
Keeping on top of bookwork from the outset is so important. As the business gets going and the piles of paper grow on your desk you’ll wish you’d got a structure in place for bookkeeping earlier. Using one of the many good accounting packages out there such as Xero from the start is a wise investment. As is engaging a local accountant – one who you feel understands your business and will support you with sound advice
8: Make the most of free networking opportunities
‘Word of mouth’ is a fantastic free marketing tool and possibly one of the best there is here in Cornwall. Get out and meet with other businesses, give free talks to local groups, promote yourself and your business. However, don’t just sell, sell, sell – use these as an opportunity to connect. Building a network and spreading the word about what you do in a genuine non-pushy way is invaluable in the first years of a new business. Establishing links with other complementary businesses is great way of expanding your network and your customer base. You can cross promote, share ideas for marketing, and feel like you’re not alone in this new landscape.
9: Gather customer feedback and be proactive with it
Be open to all feedback positive and negative. Think of when you see a polite but honest response to a customer’s negative feedback. Somehow the owner acknowledging and not responding aggressively to a customer restores confidence and can build valuable trust points for the business. If several customers are giving the same feedback take it seriously and look at what you are doing in light of this. Be prepared to make changes to flex your offering if that’s what your customer wants. The more you know and understand your customer in the first year of business the stronger your foundations will be.
10: Enjoy the good stuff
Finally, take time to enjoy being your own boss. The reality isn’t ever the same as the dream, but the freedom of running your own business and the delights that come with creating something yourself are very rewarding. Allow yourself time off every now and then and celebrate each success.