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10 important things to remember when you are starting your own business

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eing your own boss is great, but it is a sad truism, that of the 608,000 start-ups last year only half will make it to their third birthday. Even the master of re-invention himself, Alan Sugar, has had to supplement his business activities by doing other things.

Whilst a business plan is the paper embodiment of the SWOT analysis you learned at college, you need to move beyond paper and into the real world. …So what are the 10 most important things which could see your business soar like an eagle and not go the way of the dodo?

1. You need to have some capital behind you to pay for essentials.

One of those is marketing. It is a truism that you are either selling or doing. Time selling yourself or your product is taken away from manufacturing and other aspects of “doing” the job. If your asset is your skill, for example, writing, coaching, consultancy, then time marketing or selling you, seriously cuts into the “doing” time. Get an organisation to sell you. Make sure that they have experience in selling people like you successfully – ask, ask and ask again for evidence. Also negotiate a conditional fee if you can so they get paid based on how much work you get.

2. Have a good relationship with your bank manager.

Working for yourself can be a time of feast and famine, especially if your work has any kind of seasonality. Whilst a business plan is a useful starting point, it doesn’t beat being proactive with the he or she who controls the purse strings. History is littered with businesses on whom the bank manager has called time when they have a full order book and the potential to turn in a profit within a very short time.

3. Do your research.

Before you commit to anything you need to know who else is doing the same thing. If there are others in the marketplace, you need to be better or cheaper. Remember though, being cheaper isn’t always the best strategy, no one wins in an aggressive race to the bottom. Sometimes, competition in the marketplace is a good thing because you can find out how much people are prepared to pay. Without that knowledge you may price yourself out of the market. In a similar vein, you need to survey your target demographic to find out if there is a market out there for your product.

4. Find yourself a mentor.

This is especially true if you are selling you and will work alone. A mentor can be a critical friend and give you feedback, even act as a spotter for events and networks which might be useful to you. Choose wisely though, if they are in any way competition to you then their advice might be tainted.

5. Sole trader or limited company?

This is an important decision. If you are a sole trader all profits after costs are deducted and will come straight back to you. The downside is your assets such as your home can be lost should you go bust and end up owing a lot. A Limited company does not carry the same risks, but is costlier to set up and you have to pay yourself a wage and a dividend from profits. You are also limited by your memorandum and articles. So if like some polymaths you want to write, make things and run a band, you would have to have a separate company for each, a sole trader would not.

6. Marketing.

You need to communicate with your audience, your potential customers. Apparently 50% of small businesses don’t have a web page because they think it is an expensive cost. There are lots of strategies and it depends upon the ages and socioeconomic profile of your target audience. If you are selling a product aimed at young people, then Facebook, snapchat, etc. are essential. If your product is B2B, then LinkedIn, Trade Journals, etc. should be your market. Older people might use magazines and print media. Marketing costs a lot, but some things you can do for free – offer to write articles for trade journals (or get someone to write them for you); Issue a press release; run a competition; sponsor a charity. If possible, pay for someone to do this for you. And don’t forget to write a press release.

7. Get yourself a name/logo for your business.

This part has to be done with care since it costs a fortune to rename or rebrand yourself. This is about your offering. If it is you and your skills – then your name must appear in it somewhere. Is it about a service in a place, then make sure the place is mentioned, e.g. East Yorkshire Glazing does what it says in the name. Or is the product the main focus, e.g. “Bespoke Sausages”. You can always trial your name.

8. Consider sponsorship.

How cool would it be to have your name and logo on a local football strip? Whilst your budget won’t stretch to the premier leagues, a local football/rugby junior league would still be a good profile and make sure you have a handover ceremony which could attract the local press.

9. Develop your sales funnel.

You may have plenty of work when you start, but without the effort put into developing a sales funnel, that may dry up quicker than you think. A sales funnel can be sophisticated or simple, but it must be routine. You need at the very least to contact by email or phone regularly. Writing a blog on your website and linking to it is a good way. Getting someone to ring around interested customers regularly too. It is called a funnel for a reason. In some businesses the top can have hundreds of potential customers for only one or two conversions.

10. Remember, it is easier to keep a satisfied customer than get new ones.

This means whatever you do for customers it must be right first time all the time. Try to be ahead of the delivery, not last minute, and add touches which will delight. Customer feedback should always be welcome and if routinely gathered using sites such as Survey Monkey you can use it to do continuous improvement and research.
Victor Hugo said there is nothing more powerful than an idea whose time has come. By following the advice here, your time has come.


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