The following is a guest post from Andy Brownsell, commercial director at Protectivity
Being your own boss and starting up a business that you’re really passionate about is something many of us will consider doing at some point in our lives.
Whilst many people are willing to take the plunge and follow their entrepreneurial dreams – with 2018 already seeing the launch of 153,031 startups – the harsh reality is that 90 per cent of these new businesses fail.
From not having a product or service your market wants, to being financially ill-prepared, starting up your own business is undoubtedly challenging. For those that are determined to make a success of their startup and be in the 10 per cent that succeed, here are five top tips to help you prepare you for the rollercoaster journey to becoming a profitable business owner:
Tip 1: Lay the foundations of your business with a strong strategy
Before creating your business strategy it’s critical that you invest a considerable amount of time into researching your business idea and industry; otherwise, you may find yourself in a similar position to the candidates on Alan Sugar’s ‘The Apprentice’ that have their business plans ripped to shreds in a matter of minutes.
When writing your own business plan, ensure that you have a well thought out, straightforward and foolproof strategy that potential investors are able to understand and – importantly – able to trust. It’s these guys who could kick your startup into success, so it’s crucial that they’re on your side.
As you write your strategy, consider the following questions:
What makes your business different to your competitors? What are you offering that’s new?
Who will be your target audience? Have you done research in this market to ensure your product or service is in demand?
Where do you see your startup in one year, five years and even ten years time?
Will you need to hire employees in your first twelve months? If so, are you up to date on current employment laws?
However, even when you’re able to answer the questions above with confidence, your business won’t get off the ground unless you’re financially prepared for at least 12 months. Have a budget in place that’s realistic and covers all financial considerations – from purchasing insurance for office equipment to ensuring your staff have enough tea and coffee supplies. It’s highly likely you’ll face additional costs that you haven’t budgeted for, so having some money saved for emergencies will make your first year as a business owner much less stressful.
Tip 2: Business owners are allowed ‘me time’
Having a new business can be time consuming and often stressful at times, but it doesn’t mean you have to give up your personal life in order to make it profitable.
Mastering a good work-life balance is beneficial for both you and your business; setting time aside for yourself to recharge will stop you being drained and, ultimately, improve your productivity levels. In turn, you’ll soon be able to see the positive impact this will have on your startup.
Being organized and managing your time efficiently is one of the best ways to achieve this. Get into the habit of setting yourself goals for the day, week, month and year and continually review your processes in order to increase time efficiency. This will reduce time that’s being wasted, whilst also freeing up time for you to do other activities and tasks both within and outside of your business.
Tip 3: Seek advice…it’s literally invaluable!
With nearly 2,000 people setting up their own startup every day, there’s a staggering amount of advice available for you to learn from – so take advantage of it! From listening to how businesses survived their first few months, to finding out the biggest challenges they faced, there is a huge breadth of knowledge out there that will be invaluable to you as a new business owner. Seek advice from people in your sector, as they may have industry specific tips that could benefit the way you manage and run your business.
When running a business, there are some aspects that can be more complicated than others, such as financial and legal issues. It’s always beneficial to get additional advice from professionals in these areas, as they’ll be able to iron out any areas that you’re unsure of and prevent you from making a potentially critical mistake.
Tip 4: Constantly think of ways you can improve your business
When laying the foundations of your business, you’ll have done extensive research around your audience, competitors, costs, and legal requirements – but the work doesn’t stop there. To be a successful business owner, you need to constantly monitor how markets, opinions, and laws are changing and developing to ensure you remain at the forefront of your industry.
A great way to keep updated on the latest news in your sector is to attend events, network with industry folk and enrol onto training courses to ensure your skills and knowledge remain sharp and up to date. You don’t need to fork out huge sums of money to do this, and if you believe it will benefit your business it’s definitely worth the extra cost.
Reaching out to your target audience is a great way to find out first-hand what your market is interested in. Fortune has revealed that the main reason startups fail – cited by 42 per cent of polled startups – is a lack of interest or need in the service or product being offered. Rather than pursuing an ill-received idea and jeopardizing the success of your business, think about the bigger picture and focus on developing a service or product your audience are going to truly value instead.
Tip 5: Stay current and persevere!
The success rate of new businesses falls significantly to around 50 per cent after the first five years, and after 10 years, there are only one-third of startups still standing. This should serve as a reminder that the hard work doesn’t stop after the first few months of being a new business owner. Running a startup requires a significant amount of perseverance in order to keep your business moving forward and current.
Research into the most impactful techniques you can implement in order to keep your business in the public eye, such as being active on social media – comment on industry news, interact with customers and get the attention of potential new customers. As well as networking online, more traditional tactics can be equally as worthwhile. Reach out to as many people as you can via word of mouth promotion; whether it’s talking to family and friends about a new product over dinner or starting up a conversation with someone in the queue at your local supermarket, it’s important to be innovative and forward-thinking in making your business stand out and be remembered.
Whilst these tips lay the key foundations for a startup, they’re also the building blocks to developing and growing your business successfully. You need to constantly look for ways to improve the productivity levels of your startup, keep up to date with changes in your particular market and adapt your skills through the support of training courses, events and social media platforms.
What’s stopping you from kickstarting your new business and making a success of it today?