In times when employment prospects are uncertain the idea of setting up your own successful small business is undoubtedly appealing. Some are motivated to start a small business by the desire to be their own boss; others may have spotted a gap in the market for their particular product and service, but the fundamental underlying reason for starting your own small business must ultimately be profitability. The survival rate for small businesses is lamentable – statistics suggest less than 50% of business start-ups are still trading after four years.
Insufficient planning may be at least partly attributable to the failure of so many new small businesses; starting your small business without careful planning is a recipe for disaster. Before you rush headlong into the adventure and excitement of launching your own start-up, take a look at our ten top tips for starting your own business: it may help you avoid the traps that other budding entrepreneurs didn’t consider.
1. Research the Market
This is probably the single most important aspect of making your small business a success. You may think that you have a sure-fire product or service, but it’s worthless unless you can prove that a significant number of people are willing to pay for it. Talk to people: potential customers, suppliers, competitors in the same field. Find out from them just how viable the market is and then consider how you are going to make your business the customers’ preferred choice.
2. Have a crystal-clear Business Plan
You have a vision for your small business – write it down and also document exactly how you are going to achieve it. Brainstorming may help you to capture all of the aspects you need to include in your business plan. Think about cash flow, premises, current or future staff requirements, your work ethic, marketing, product or service pricing and anything else that may be relevant to the ongoing operation of your small business. Although your business plan may contain many elements keep it as simple and concise as possible overall.
3. Use the experience and knowledge of others
Going it alone when setting up your new small business can be daunting and unnecessarily difficult. Seek the advice of others who have small business experience or bring on-board a friend or family member with whom you can share ideas and resolve problems. There is a wealth of small business resources and information on the internet and there may be local meetings for small businesses that you can attend.
4. Recognise your own limitations
For any small business to succeed, the owner must be dedicated and prepared to put in long hours and hard work. Resilience to setbacks and criticism may be required. It may be a long time before the small business become profitable – do you have the necessary patience to see it through. Self-honesty is vital; be totally realistic about where your strengths and weaknesses lie, and consider hiring in the skills that are beyond your own capability.
5. Set yourself realistic goals
Setting realistic short- and long-term business goals helps you to monitor the progress and success of your small business and can be motivational, providing a sense of achievement as each goal is reached. Aiming to have accrued a million pound of profit after your first twelve months trading is almost certainly(!) an unrealistic goal. Aiming to increase your market share by 10% through marketing and the acquisition of new customers within twelve months is likely to be more achievable.
6. Listen to your customers
Find out from your customers why they chose your small business. What do they like about your business? What could be improved or done differently? Your customers are a source of information that is invaluable to the success of your small business. Doing more of the things they like and less of the things they don’t is the simple key to retaining existing customers and to attracting new ones.
7. Don’t miss an opportunity to promote your business
Whenever you have a spare moment, dedicate it to marketing your small business. A simple up-to-date website or blog will reach a global audience, whilst social networks such as Facebook, Twitter and LinkedIn can all help to bring your small business recognition and needn’t take up too much of your time. Consider joining a local business group and advertising in any free local newspapers in your area. There are also hundreds of free online business directories in which you can enter your details – these are the modern equivalent of the ‘Yellow Pages’. Bulk email campaigns are easy and inexpensive to set up if required.
8. Don’t take your eye off the cash
Just because your new small business is busy doesn’t mean that cash may be rolling out faster than it’s rolling in. Cash flow problems are among the main reasons that small businesses collapse. Make sure invoicing is up-to-date and that payment reminders are issued as soon as they are due. Make time to document all business income and expenditure and be prepared to adjust your business paln if the books aren’t balancing.
9. Don’t let your small business stagnate
Businesses are evolutionary by nature – always keep an eye on what your competitors are doing, how their businesses are changing and whether yours needs to change. What sells today may not sell tomorrow, so read up on changes in your market and the ways in which other small businesses are addressing those changes. Think about what the ways in which your product or service could be modified to appeal to a new or wider range of customers; you may be the one who comes up with the visionary idea that puts you way out in front of the competition.
10. Stop and take a breath or two
The quest to make your small business successful, popular and profitable can become all-consuming and ultimately exhausting. Make time for friends, family and activities that do not relate to your small business. Spending a sensible amount of your time away from the business allows the opportunity to come up with new ideas and to return to it with renewed enthusiasm and drive.