Starting a business is daunting and over 80% of businesses usually fail in the first 2 years. So what can you do to help reduce the risks?
Here are 9 simple tips to help start on the right footing and give you a better start to become successful.
- Research your markets
- Know what your customers want vs what they need
- Make sure you have enough capital
- Start small and build up big
- Understand what marketing platforms suit your business
- Outsource where you can and don’t be afraid to ask for help
- Make Yourself Look bigger than you really are
- Always test and improve your business
- Protect You Intellectual Property
1. Research Your Markets
You may understand the requirement to research your markets, but what are you really looking for?
You need to understand the following about your market to make sure you set your business up the best way possible for success, rather than just jumping in and starting up. Here are what you need to know.
- Who your competitors?
- How many are there and why?
- Who are your most successful competitors?
- What are they doing right?
- What are they doing wrong?
- Who are your least successful competitors?
- What are they doing right?
- What are they doing wrong?
When you ask these questions, you will be able to understand if there is actually a place in the market for you and it will allow you to identify your Point of Difference.
You need a Point of Difference, otherwise clients will ask you the question, “Why should I use you over …..?” and if you don’t have an answer to this, then it comes down to price, which ends up in a war to the bottom where all parties but the client lose out.
For example, is your business going to be successful because there is so much work available that everyone is doing it? If this is the case, you seriously need to have a fall back plan, because like everything, work goes in cycles and at some stage the excess work will dry up and you need to be ready.
No one is 100% perfect, even your most successful competitors make mistakes, or in some cases they can become arrogant, so by understand what your most successful competitors are doing right and wrong, you can identify what you can offer which is better than them and how they are getting their message across to their potential clients.
You would be amazed at what you can learn from your least successful competitors, they may become your clients and visa versa. Your least successful clients may be doing a fantastic job, but don’t understand how to market their business.
2. Know What Your Customers Want vs What They Need
Many people make the fatal mistake of thinking that they actually know what their customers want and need, when this is only their opinion.
Ask a number of people who have or may use your services this question as it can be crucial to your business and the way you run it.
Ask yourself, why is knowing what your client needs vs what they want important?
Knowing what your client needs is what they is essential to winning a deal and is the basic component of winning the deal. What your clients want is the cream on top.
If you have a price conscious client, knowing what they need could allow you to make the best price offering without losing the client or your profits by asking “do you really need what they are offering you or is it just a nice to have?”
As an alternative, by knowing what they would like or want could win you a client by adding the cream on top. So in this case you can say that they are only offering you …. Our offering is better because you also get …. and ….
3. Make Sure That You Have Enough Capital
Most small businesses don’t make many if any sales in the first 6 -12 months, so if you can start the business with enough capital to run for up to 2-3 years without a sale, this already puts you well ahead of the failure rate of 2 years and allows you to make key decisions with money in hand.
4. Start Small and Build up to Big Customers
Don’t try and start your business by taking on large clients, fast growth can severely affect your cashflow and has killed just as many businesses as little or no growth at all. Plus if you make a bad mistake or don’t get them, you only have 1 shot to make it work, it makes it very hard to go back to them in later years.
5. Understand What Marketing Platforms Suit Your Business
This changes quite often, but you can ask an expert on this, or even search around for a blog on the latest marketing platforms for your clients.
This is important because otherwise you could be simply throwing your money away if you don’t get the right clients for your business, so here are some general tips.
What is your market sector?
- Business to Consumer (B2C)
- Business to Business (B2B)
Try the platform and see if you get any responses and if so, ask the following questions:
- Who responded?
- What age group did they come from?
- Why did they respond?
- What got their interest?
- Where did they hear about you?
This will give you feedback on your marketing, allow you to identify who your target market is for this type of client and what did and didn’t work for attracting clients.
6. Outsource Where You Can and Don’t Be Afraid to Ask for Help
Don’t be afraid to outsource certain components of your business, there are many successful outsourcing companies in the industry from accounting through to receptionist to labour and administration.
Outsourcing can help you free your time up to do other important things in your business, can save you money and can even make your business look larger than it really is.
B. Ask for Help
If you don’t know something, don’t be afraid to ask, this may be from a business professional or even on-line. People love to give their opinion, especially on-line on social media platforms and it is a great way of testing things thing adverts and getting an idea of what might and might not work, or even logos or banners.
7. Make Yourself Look Bigger Than You Really Are
So you might ask the question, how can you compete with a company which has 50 staff members when you only have 1 or 2. Here is the answer.
Outsourcing and playing it smart.
With an outsourced receptionist, you may have a number of people answering the phone on your behalf, set it up so that they send you an e-mail and/or text message and it frees you up to call back when you are able to or in a better position to call.
The last thing you want to do is answer your phone to a new client when you are hanging off scolding with noise in the back ground and nothing to take down their details. It sounds unprofessional and makes you sound like a small business.
Receiving accounting e-mails from an accounts department or passing messages onto someone in accounts always makes you seam bigger than you are, as long as they have the similar e-mail.
B. Playing it Smart
When you take to someone, say you will organise this or get someone else to do this for you, as though you have a number of people working in the business.
Don’t do everything too quickly as this makes you look small and desperate, leave it for 10-30 minutes to get done unless it really is urgent, this shows that you’re busy.
8. Always Test and Improve Your Business
Every 3-6 months take in what you are doing and how you are doing it.
Find ways to analyse and improve the following:
- Improve the efficiency of your business by improving processes
- Look at suppliers and re-negotiate terms and pricing if you can to improve cashflow and profits, especially if you are growing and providing them more business
- Analyse staffing to see if anyone is sitting around and doing nothing at certain times (it means they can do more and if you value them, you may lose them because of boredom)
- Renegotiate money coming in to improve cashflow where you can
- Always look at ways of improving your marketing to increase client base and work
- Always look at different market sectors which you can branch into to reduce risk and improve client base
- Don’t be afraid to ask for testimonials from clients and referrals, it will always improve your business (this will let you know what they think about your business and help gain more clients, you may have to write the testimonials for them as they may be too busy)
- Make sure that you have a client database and analyse their usage and usage patterns to get a better understanding of business
- Look at ways to improve your service to your clients so they stay with you
- Improve communication with your clients and don’t forget to thank them and reward them where you can to improve loyalty
9. Protect You Intellectual Property
Don’t forget to Trademark your name and if you are selling a product you should patent the product if you can. Why you may ask?
There are people and businesses which have specifically been set up to look for businesses without trademarked names and although there may be ways of defending this type of action, both re-branding your business or fighting this legally can cost your business $10,000’s, while trademarking your name should cost around $1,500-$2,000 before you start getting too big.
This is the same for your product, the last thing you want to do is build your business around a product, only to have someone register a patent for it and you have to either pay them for the privilege (license of patent), close down your whole business or end up in court trying to fight for this.
Nothing is certain in life, but by following these 8 simple steps it will help you to create a good foundation for a successful business.