You might not think that, given the current economic uncertainty, now would be the most opportune time to start your own business. However, provided you have a solid business plan and are prepared to persevere, you could well prosper if you take the leap and try to build a small business of your own. Of course there are risks involved – this is always the case, no matter how healthy the wider economy is – and much careful forethought and consideration is required beforehand. Nevertheless, building a small firm up from scratch can be as rewarding as it is challenging. Indeed, at a time when good jobs are so few and far between, perhaps you could reap the rewards from taking that risk.
It’s often said that those who dare, win – and there are certainly plenty of successful small businesspeople who can testify to that. Whether you’re a recent graduate who’s grown frustrated by the graduate jobs market or you find yourself stuck in a rut and want to break out of your current career trajectory, starting a small business could be the ideal option for you. Obviously, you need to know just what market you’re planning to target and you also need to think carefully about what your rivals are doing so you can steal a march on them. If you’re tempted by the idea of starting your own small business, here are a few suggestions you may wish to bear in mind.
Getting started in business
Starting a small business after leaving uni
There’s been much talk about how challenging the graduate jobs market is. Indeed, good graduate jobs have come at a premium ever since the global financial crisis first struck in 2008. It should go without saying that this has caused much frustration among graduates eager to take that first step on the career ladder. Many graduates plug away for months or perhaps even longer in search of that all-important first post-uni job – many, of course, end up stuck in apprenticeships (often unpaid) and still others get sidetracked in jobs which have no relation to the career they really want to pursue.
With all that in mind, then, maybe becoming your own boss could be just the right move for you. A useful article from Studential.com offers some tips for those graduates pondering the possibility of setting up their own small business. First and foremost, you can’t – or you shouldn’t, at any rate – go into business without a solid business plan behind you. You really need to know what you’re looking to achieve with your business, and how you intend to reach your chosen goals. There’s always the temptation to plunge right in, but it’s best to be analytical. This should enable you to build a platform for lasting success. This isn’t just true of graduates looking to establish startups, of course, but it’s also crucial for all would-be entrepreneurs.
Furthermore, it’s essential that you’re aware of your own limitations as a graduate businessperson. The biggest problem you’re likely to face, at least to begin with, is your own lack of experience.
However much business acumen you think you’ve got, it helps to be able to tap into someone else’s experience while you’re finding your feet. This is where a mentor could come in very useful. Having another businessperson on hand to guide you through the early stages of establishing your business could prove crucial further down the line. Don’t just assume you already know everything there is to know – this is likely to prove a fatal error for your business.
When starting out in business, it’s best to start slowly, so don’t get ahead of yourself. You need to carry out thorough research into your target market, and find out how you can differentiate yourself from your competitors. There’s more to this than just doing a quick Google search – it really does take effort and diligence. Social media offer new startups an opportunity to connect with potential customers, but there’s really no substitute for talking to people face to face. Perhaps the most important thing to remember, though, is that it’s really best to do something which genuinely interests you. That way, at least it’ll be easier to motivate yourself to keep persevering through all the challenges you’re likely to encounter.
Starting a small business as a change of career
If you’re fed up in your current job and you fancy a change of scene, then perhaps starting your own business could provide you with a new sense of purpose and give you somewhere to really channel your energies. Much of what we discussed in the previous section will apply to those of you thinking of establishing a startup as part of a career change – you’ll need to do something that interests you, carry out thorough research beforehand, and remain aware of your limitations – but unlike most young graduates, you probably have other things to worry about as well. Maybe you have a mortgage to pay off, or a family to think about. This does complicate matters somewhat, but it doesn’t mean these barriers are in any way insurmountable.
An article from About.com offers some tips for those considering starting up their own business. Firstly, you need to be willing to take risks if you’re to make your small business succeed. This might sound like an obvious statement, but you’d be surprised just how many people fail to appreciate just how much risk is involved with starting up a new business from scratch. You should also make sure that you’re honest with those closest to you about just what you’re getting involved in. Don’t try to pull the wool over their eyes, because they’ll only resent you for it later on if things don’t work out as anticipated.
Some people are unwilling to walk away from their job altogether to concentrate on building a new business up, of course. This is understandable, and if you don’t feel you can commit fully to your fledgling business then maybe it might be best to put the idea on the backburner until such time as you feel confident enough to take the plunge. However, if you do start a new business and you find your finances are stretched, it might be worth considering taking a second job – maybe a part-time one – or doing some freelance work on the side. This should at least help to ensure that the money keeps coming in while you put in the hard graft to ensure your business’ foundations are secure.
Laying firm foundations for your business
When you first get it into your head that you want to set up your own business, there’s always the temptation to just rush out and plough straight into it. However, if you set up a business in haste, then you’re likely to find yourself repenting at leisure later on – so it’s well worth taking a step back and thinking about just what you want your business to achieve, and when. This is where a coherent business plan is likely to come in very handy. A business plan can lay the foundations for your small business, giving you something solid to build on. However, there’s much to consider when drawing up your business plan, so here are some suggestions.
Drawing up a business plan
As this BBC article observes, your business plan needs to encapsulate your firm’s strategic, financial and operational aims. You need to include details of the products or services your business is going to offer, an initial executive summary and a written overview of your goals for your business, financial forecasts and information about the makeup of its management team. You need to think carefully about what you really want for your business before you get straight into writing up a business plan. Think about what your ambitions are – do you want rapid expansion or are you content to maintain a steadier pace of growth? Consider how you intend to differentiate your business from its rivals, and include that in your business plan. It’s also a good idea to include some basic market research in your business plan, so look at what your potential rivals are doing and think about how you can better it.
You also need to discuss your marketing strategy, and how your products are going to be priced. No new business is going to get anywhere without having the right finance behind it, so you’ll also need to include financial forecasts and use these to determine how much money your firm will require. You should also include a sales forecast, cashflow forecast and projected profit and loss account for up to five years into the future. When you’re drawing these forecasts up, it’s best to err on the side of caution – don’t succumb to the temptation of over-optimism – and make sure you get a qualified accountant involved in helping you to prepare them.
An article from the Guardian, meanwhile, also offers some more tips for those getting ready to draw a business plan up. It stresses the importance of thorough market research, and suggests really thinking carefully about what your business is going to offer that its rivals can’t. Consider where there’s a gap in the market which your business can occupy, and how it’s going to do so. Of course, even if you do see a gap in a particular market, that doesn’t necessarily signify a golden opportunity – it may be that others have tried and failed to make that territory their own. It may be that there isn’t a great deal of money in a certain sector in a particular area, of course. You should look at why previous firms have failed, so you can avoid falling into the same pitfalls as they did.
In addition, you should also be prepared to go back to your business plan every so often and revise it as and when you need to. Your business plan needn’t be set in stone – in fact, it shouldn’t be. It’s best to reconsider as and when your circumstances change or the market changes, so that you can adapt your own strategy accordingly. This kind of flexibility and willingness to adapt could prove crucial in ensuring your firm’s long-term success.
How to avoid potential pitfalls
No matter what market you go into, the chances are that there are countless businesses which have gone before you – and many if not most of these firms will have crashed and burned. It’s up to you, therefore, to ensure that your own firm doesn’t go the same way as its less successful predecessors. Again, this is where thorough research is likely to prove crucial to the prospects of your business. Whether you’re a total beginner or you’ve had some experience of running businesses in the past, you need to take great care before entering into each new venture if you’re to stand a realistic chance of making it a success.
Writing for the Publicbeta blog, Mohit Pawar reflects on his own experiences as a businessman, and offers advice to those looking to avoid making the same mistakes he did in the past. In particular, he stresses the importance of putting in the hard work – some people have a tendency to fall in love with the idea of being an entrepreneur to such an extent that they have an inflated view of their business and neglect some of the basic fundamentals. Unless you’re prepared to put your energies wholeheartedly into making your business a success, you will most likely be running the risk of failure.
It’s also worth having a backup plan just in case. This way, if your original plan for building your business up hits an unexpected snag, you can take an alternative approach and see how this works out for you. Don’t become reliant on a small number of key clients – look to make new contacts continually and branch out. Complacency has been the downfall of countless small business over the years, and it’s a trap you most definitely need to avoid falling into.
You should also be very wary of getting stuck in your comfort zone. It may be that you’ve opted to start a new business as part of an effort to get out of your previous rut – so, presumably, the last thing you want is to find yourself stuck in a new one as a businessperson. It’s also very important to make sure that you don’t get ahead of yourself. Some people take to running a business like a duck to water, but that doesn’t mean they’re guaranteed continued success. Take small steps – of course excessive hesitancy is best avoided, but a degree of caution is advisable.
Promoting your business
You could have the greatest small business in your field, but that’s unlikely to do you too many favours unless it has an adequate marketing operation behind it. It’s absolutely essential that you really put your business out there, and make sure that any potential customers know what you have to offer and where they can find you. It’s your responsibility as a businessperson to make the case to potential customers as to why they should give their custom to your firm rather than a competitor.
An article from Startupnation.com offers a number of tips in this regard. It points out that start-up businesses should make the effort to reach out to customers via social media. Given the sheer number of people who regularly use social networking sites such as Twitter and Facebook, it would be foolish not to take advantage of what these resources can offer your business. Indeed, consumers have largely come to expect to be able to interact with their favourite businesses and brands via social media, and you need to ensure your business is responsive to this demand.
It helps to know, also, just what your firm’s strengths are and how you can play to them. This can, in turn, help you market your business more effectively to potential customers. Consider what differentiates your business from its competitors, and emphasise these factors in your marketing. Think about how your customers can benefit from what you have to offer, and why they should opt for your business rather than any of its rivals.
Having said that, a degree of cooperation with other small firms in your field could serve your business well in the long run – you needn’t be at one another’s throats all the time, after all. If there are ways in which you can work alongside other companies in your area of expertise, then don’t be afraid to pursue them. You might be surprised at how receptive your putative competitors are to this kind of approach.
How to work out when your business is doing well
So you’ve got your business set up and your marketing tactics in place. But just how do you work out when your business is doing well? Naturally, the bottom line usually gives aspiring entrepreneurs a reliable indication, but that’s not all there is to it. An Openforum.com article notes that it can be confusing when you’re running a small business to work out just how your plan is proceeding. There are however a number of ways in which you can ascertain how successful your firm has been, and not all of them revolve around finance.
Customer feedback is crucial for any business, so it’s important to seek the opinions of the people who buy your products and services. This way, you can work out just what they make of the standard of service they’ve received or the quality of the products they’ve bought from you. You can then tweak your offering accordingly if you feel the criticisms you’ve received have some grounding in reality. If customers are coming back to you and reporting that your services of products have made a positive difference to their lives, then this is a surefire sign that you’re moving in the right direction – as well as being one of the most rewarding things about running your own business.
Even seemingly minor things like seeing your business crop up on the first page of an internet search can give you some idea of how much progress your business has made. When customers or clients come to your business from further afield, it’s likely to be a reliable sign that your business is moving in the right direction and that positive word-of-mouth discussion is being generated. Customers who are happy with services or products are likely to recommend the businesses they’ve received them from to friends and family. This can be very important for new businesses.
When you find for the first time that certain regular customers are coming back to your business time and time again, you can probably deduce from this that your firm is doing something right. You may also find that local media have started to pick up on your business, and provide it with useful coverage and publicity. These are all indications that your firm is on the right track. That doesn’t mean you can afford to get complacent, of course, but it should give you that encouragement you need to continue to build and expand your business.