Starting a business is both exciting and terrifying. Even if a life-long dream is finally coming to fruition, there are still a lot of tick boxes you’ll need to check before feeling assured that you can make it work.
The stats speak for themselves: 20% of small businesses fail in their first year, 30% fail in their second year, 50% fail after five years in business and 70% of small business owners fail in their tenth year in business. So, how can you stop your start-up from joining that list of statistics?
To help you along your entrepreneurship journey, we’ve compiled a ‘starting a business checklist’ – a list of a few things to bear in mind when starting your own business.
How to Start a Business: Your Personal Checklist
#1 Start with a solution
When starting a business, don’t think about what to sell; think about what you will solve. Knowing what problems your target customers face and offering a solution will guide you in creating your brand and marketing your company.
#2 Understand the market
It’s vital to conduct thorough market research on your industry and potential customer base to assess your business’ potential. Here are some of the things you can expect to learn from your research:
- An understanding of what the target market wants and needs
- How much they are willing to pay for it
- Be able to market effectively
- Be able to sell to your target customer
- Have a clear idea of what differentiates you from your competitors
We suggest that you:
- Do plenty of research into your customers’ buying habits
- Research the demographics and psychographics of your potential customer base
- Talk with similar businesses
- Get familiar with your direct competitors
- Understand what the market is saying about your competitors
#3 Listen to what others have to say
Starting a successful business means being aware and observant about what the market is doing. You’ll need to read, research and take notes from friends, family, experts and mentors. This will offer you with a wide variety of feedback and insights that you can apply to your business.
Tell people about your start-up. Make sure you both listen to their feedback and read their body language. Encourage them to be honest with you, because it’s almost impossible to be objective about your own ideas, dreams, goals and ambitions. Veteran business owners and experts will be able to give quick insights into what works and what doesn’t. The collective opinion you get from those around could be a reflection of how consumers will react. It’s basically free market research!
#4 Start small
Starting small keeps things manageable and allows you to learn as you grow. Once you’ve found success, you can expand and duplicate your formula.
If possible, start by self-funding your business and then go for funding to expand when you can create a growth story after some traction and experience.
#5 Count the costs
Start-up costs can be from next-to-nothing (for example, if you’re offering consulting services and you already have some clients), to huge (opening a restaurant or a shop for example).
Once you’ve developed your idea, you’ll need to calculate the average cost of running a business. Remember to take into account:
- Your own living costs
There will also be a lot of unexpected costs that crop up, so whatever your initial estimate turns out to be, remember to build in plenty of buffers.
#6 Have a ‘Plan B’
Despite all your hard work, the reality is that your business could fail. You need to have a contingency plan in case your start-up is unsuccessful and you end up with no incoming money, and in some circumstances, in debt. Your plan should include the following questions:
- How would you handle having no incoming money?
- Could you get a job on-the-fly?
- Is there someone who could support you until you have an income?
- What comforts could you go without?
- How long would your savings last if you quit?
#7 Don’t quit your day job – yet
If you’re starting a small business, launch your start-up and build your business in stages as you gradually transition from employee to entrepreneur. Remember that it will generally take some time before you start earning a steady income from your new business. Start working on your new business in your off hours so that you’re still earning as you’re growing.
If you quit your job before developing your business to some extent, you could experience months without an income due to unforeseen delays, such as bank lending, bureaucratic red tape etc.
#8 Work on your strengths, outsource your weaknesses
Starting an entire business by yourself or with a small team can mean that you end up taking on time-consuming tasks that take you away from your core business. If you’re spending all your time doing your accounts, answering the telephone and designing posters, you could be using up precious time that could be better spent growing your business and increasing your profits.
We suggest that you take the time to understand your own strengths, skills and time available and use specialist providers who can complete the work far quicker than you could ever hope to. Some examples of service providers you may want to engage include a lawyer, marketing specialist, insurance agent, business consultant, energy broker or an admin assistant.
#9 Get the best rates on your business utilities
When starting a new business, keeping your overheads down is key. Saving money on your business utilities like gas, electricity and water is a good place to start. Using the services of independent utility consultants can help you decrease the cost of your business utilities. With years of experience in comparing contracts, consultants and brokers can simplify the procurement for busy new business owners – without charging a fee. They do the legwork; you do the saving.