Are you thinking of starting a business in 2017? If you are you are probably in the planning stages or are at least starting to formalise your idea. Here are some tips that will help you increase your chances of making the business a success:
1. Evaluate Yourself
This is particularly important if you are moving from employment to self-employment or running your own company. You need to look at the obvious things like will you have enough money to survive while sales are low as your business gets off the ground. You should also consider whether you have the right levels of motivation, confidence, and resilience.
2. Make Sure People Want to Buy Your Product or Service
Just having a great idea is not enough. Wanting to get into a particular industry is not enough either. The crucial element you need is customers. This has to be investigated on four levels: 1) are there customers who want what you are selling; 2) are there enough of them; 3) can you reach them; 4) will they buy from you and not from a competitor.
3. Focus On Your Customers
One of the mistakes many people starting a business make is putting too much of their energy and focus into the product or service they will sell. There is a huge risk to this strategy as you may create a business, product, or service that doesn’t appeal to customers. This could present itself in many different ways from the branding being wrong to the product offering features that are not compelling enough to convince the customer to buy. Focusing on your customers from the beginning, i.e. from the early planning stages, will help to prevent this from happening.
4. Write a Business Plan
You will probably need a business plan if you are seeking investment, a loan, or a grant. Business plans also help you get a better understanding of the shape the business might take, the challenges it might face, and the potential opportunities. The process of preparing one is, therefore, beneficial, whether you need it for funding reasons or not.
5. Focus on Cash Flow from the Start
From the day you start trading, your primary focus should be on cash flow. This is because a lack of cash causes more new businesses to fail than bad ideas. Innovative thinking is often required to achieve this. For example, asking for a deposit upfront if you are a service business, or rigorously controlling stock levels and operating a just-in-time business model if you sell products.
6. Be Flexible
Many people starting up a business do so because they are passionate about what they are doing. That passion is usually a benefit to the business, but it can also become a hindrance, particularly when it results in inflexibility. It is almost impossible to predict how a business will develop before it starts so the best way to ensure success is to be flexible, even if that means compromising a little on your passion.
7. Manage Your Finances Professionally from the Beginning
You should make sure your business has proper accounting procedures and policies in place from day one. You should also do effective financial planning, and should analyse all aspects of the financial side of the business, particularly costs. In fact, when starting out, it is helpful to be obsessed with keeping costs as low as possible, so long as it doesn’t impact on the quality of your product or service. An accountant can help with managing your finances, establishing sound accounting basics, and helping you plan. It is one cost you won’t regret.
To get help or advice with your new business, contact a member of the Gilroy Gannon team today.