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Build on the functionality of your ideas

Primarily, to start a business, you need to have a unique and functional idea or concept for the product or service that you plan to offer. Observe your environment and assess in what sectors you may be of help to bridge the gap and fulfil consumer requirements. Identify consumer needs and inspire yourself to devise and offer viable solutions.

Put yourself in the shoes of the consumer and list down all the consumer needs and requirements. It is probable that you might be able to identify a section of the market which remained unexplored and you might bank on the opportunity to fill the gap.

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Try your business first

Before you start your own business, look for a way of getting some hands-on experience. This may be easier in some professions than it is in others, and there may be a different approach needed for some of them.

For example, if you are passionate about good food, it can be quite easy to get a job as an assistant cook, but if you want to set up your own recording company, things start to get a little complicated. If you are going to get involved in a business which has a slightly complicated entry process, then the way to go is to offer your services for free. Small and medium-sized enterprises often use interns and volunteers to help them cut costs, so it is worth researching them and getting in touch with a manager or the person responsible for hiring staff.

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Ask for feedback from friends and family

Tell people close to you about your business idea and ambitions and ask them for feedback. Choose carefully whom you approach though, the people who are supportive of your personal life will be more willing to listen and give you a realistic opinion. A proper technique is to prepare a short informal presentation for your friends where you will ask them to try out your product or service. If you want an unbiased opinion, try approaching individuals or small organisations in your local community and offering them a free trial.

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Be mentally prepared to start a business

Now assess your ability and willingness to deal with all individual aspects of the business. Some of the tasks will be more challenging than others, and not everything will work out well the first time.

If you want to start a business, it is essential to be mentally prepared for the highs and lows that may come. If someone only focuses on the easy and enjoyable aspects of the business, he or she will usually underestimate the situation and encounter many more difficulties in his or her journey. You are much more likely to achieve success if you have a realistic idea and treat the easy and challenging tasks with equal enthusiasm and effort.

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Test your business idea

It happens to everyone. You are walking down a proverbial street and see someone struggling with a mundane everyday task. Channelling your inner telemarketer, you think to yourself: ‘there must be an easier way to do that.’

A few hours later, an obligatory ‘Aha!’ moment ensues. You think you found the perfect solution, come up with the perfect idea, but being the serious entrepreneur that you are (go you), you are not yet sure if the market will agree. So now there you are, facing a business dilemma of your own. You may be onto something, but don’t feel like wasting a year’s worth of salary to develop a product and thoroughly test demand fully. Once again, there is, in fact, an easier way. Do it.

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Carry out market research

If you have ever seen an episode of Shark Tank or Dragon’s Den, you already know why you should always test your business idea first. Too many budding entrepreneurs spend a small fortune building a product nobody wants to use. You might think selfie sticks for dogs are the next Uber. However, until you get market confirmation, you are just a guy saying ‘selfie sticks for dogs are the next Uber’.

Of course, there’s the good, the bad and the ugly of doing market research. Having your family and friends entirely on board with your idea is far from a reliable proof of concept. Most people think correctly validating your concept takes too much time, effort and resources before getting relevant insights. Most successful founders disagree. Let’s assume you have already covered the basics. You have identified your target audience. You have analysed their pain points and come up with a unique value proposition. It is then time to get some much-needed feedback.

 

 

Pitch your idea to professionals

Once you have a concept that is well-thought out, the ultimate test of its worth is trying and selling it to someone. Creating a successful pitch requires effective brainstorming and strategy, so ensure you take all the necessary steps to do so. A pitch can have various forms; you can write a donor letter, do a presentation or fill in an application for a business grant.

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Find out opinions on similar products

Online discussions and user forums can give you a good insight into what consumers honestly think about a product or service, to identify their needs and expectations, and find out what upsets them. For example, large online retailers such as Amazon or eBay use a 1-5 star grading system which enables you to learn the average feeling about a product including views from all sides of the customer base: satisfied, neutral and dissatisfied customers.

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Organise a focus group

The idea of a focus group is to assemble a small group of people and ask them about their opinions, perceptions, or beliefs about your concept. It is a good way of gaining some insight on what people think of your product, service, concept, advertisement, idea or packaging. Some useful tips on how to run a focus group are offered here.

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Know your market

Once you have an idea about what you want to do, explore what’s going on in the particular industry you are interested in. Read news related to your chosen area and look for information about which products are currently popular, what the latest innovative ideas are, development in other areas that influence the industry. The information on market trends can be accessed most easily in the specialized sections of publications such as ‘business’, ‘tech’, ‘lifestyle’, ‘environment’, ‘travel’ etc.. However, you can get more specific and valuable information if you invest in an industry journal, website or newsletter from a professional body.

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Understand your industry

Learn the ins and outs of your chosen sector and focus primarily on the things you find most difficult. Sometimes the perceptions of how a professional life in the industry looks entirely different than it is. Every road to success has its challenges, and as you learn more about your industry, it will be easier to envision what kind of issues you may come across and what it might take to overcome them.

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Have a good idea of what needs to be done

Write down a list of the main tasks you will need to handle when operating your own business. The basic list could include activities such as: attracting clients, managing customers’ inquiries and complaints, writing proposals to potential sponsors, researching suitable premises, looking for reliable suppliers, paying business taxes, complying with legal requirements in your chosen business sectors, educating yourself about the industry, obtaining necessary certifications and more.

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You do not need to be a first mover

It has been well established that first-mover advantage is highly overrated, and history is littered with successful second or later movers. Google was not the first search engine, and Microsoft was not the first GUI/Windows-based software. See this article on Last-Mover Advantage for more detail.

So if it is not your idea, then your execution is going to be the critical factor in whether you become the number one or an also-ran. So what do we mean by ‘good execution’?

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Jump in and get started

It seems like most aspiring entrepreneurs delay acting on an idea until all of the stars aligned. I am no astronomy major, but it seems like that rarely, if ever, actually ends up happening. Moreover, even when it does, feeling the initial market pulse should not require expending massive resources and creating a comprehensive overview of the playing field. Think big. Start small.

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Execute correctly

Looking at the execution hurdle, whether you will ever achieve a product-market fit and if your market is big enough are calls you have to make, but many good ideas languish through poor execution. First mover advantage is highly overrated. Take Facebook as an example; it was not the first social network, but often success is about being a few percents better across hundreds of activities rather than the big idea.

If you want your startup to succeed, a good product and ambition are not always enough. Crisp execution, rather than a bright idea, is vital to the success of a startup. Starting a successful business is never easy, but with the right attitude and the right approach then it is entirely possible. When you do make mistakes- learn from them. They are nothing wrong with experiencing failure so long as you learn from it.

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Consider working from home

This may significantly reduce your capital requirements. A significant portion of your capital, when starting a business, is allotted to the rent or purchase of office space. Hence, working from home, you may be better able to meet your financial requirements when laying down the foundation for a start-up. You may transform one of your spare rooms into your workspace or use a secluded space in your home as your office.

Adorn the space with rented or purchased office furniture- whatever fits your bill- to fulfil the requirements of your workspace.

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Make sure to create a website

Starting a business in the present age without launching a website can be suicidal for your business. Online presence plays a significant role in the success and survival of a start-up business and to increase the chances of your success, you may pay sufficient attention towards making your website appear professional and appealing to your consumers.

A website launch is not as costly, and it offers broader reach to the target consumers. Also, you may make your website SEO friendly and choose a suitable URL to increase its functionality.

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Create a brand

Once you have got a product, you want people to be able to remember it and speak about it as early as possible that why you need to create a brand: find a name and hire a designer to create a brand identity. Communicate about the product and the mission on relevant websites, so you develop awareness and get feedback. Provide all the information they need to your first visitors; they are your future advocates.

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Register with the HMRC

Make sure that you register with HMRC, as soon as you establish your business, to avoid any possibilities of getting penalised. Its an easy thing to postpone and forget about but this can cost you dearly later on, so make sure to get your financial ducks in a row from the beginning!

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Bootstrap

Bootstrap, find a friend/parent/family/partner to provide some capital. Failing this, look for advances from distributors, vendors or even government grants. You do not always need £50k in the bank to start a business. ‘Go in’ with a web developer or offer a key supplier an equity share in return for 60 days credit. Some of the most impressive pitches I have seen are people that say “this is what I have done with £500, so imagine what I could do with some serious investment

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Engage with your community

Entrepreneurs do this ALL the time. With about a £50 investment, anyone can run an initial market test and get immediate feedback. Playing with paid advertising might seem daunting, but Google and Facebook have gone to great lengths to keep it simple. Especially if you are only using two or three of its most fundamental features.

If you already know where your target audience gathers, feel free to go even leaner. Engaging directly with a community is a powerful way of collecting quality insight, when and if you can get away with it. Sometimes, all you need to do to is ask. A fellow Redditor recently created a website that complements Twitch, a massively popular video-game streaming service, and asked a relevant subreddit for feedback. Most of the 200 comments came within the first 48 hours of him starting a thread.

People shared their thoughts, proposed tweaks and even offered small strategic partnerships. Obviously, this should not be the be-all and end-all of his market analysis, but it sure looks like a good start. The cost? Virtually nothing.

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Delay charging a price or give a free trial

All those years of training in business have taught you that profit maximisation is the crucial goal of a business. Hearing us say that you should not charge for your services may sound stupid, but it worked for Craig Newmark. The creator of Craigslist designed a free website, and despite its roaring success, the site continues to be free except for specific ad categories. The company now has a net worth of $400 million. That is your proof that this peculiar strategy works. It gives the owner time to build an audience for the business and engage customers.

You can also explore giving a free trial; people are always looking for freebies, so offering your products or services free of charge will provide you with an excellent opportunity to gain some honest opinions. If you want to sell food, you can contact organisers of various community events in a local community centre and offer them free catering. If you are going to open a consulting business, post a classified ad providing your services for free to a specified number of people on a first come first serve basis. The options are endless; however, you need to ensure that the freebies on offer have active promotion via traditional advertising or social media channels.

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Keep your costs low

You may also consider the employment of various strategies to reduce your costs and capital requirements. For instance, you may think to work from home to save the cost of renting or purchasing an office space. You may convert a spare room into your workspace, adorning it with suitable furniture or you may find a secluded space in your home to work without any distraction.

Another way to reduce costs is to hireable candidates who may agree to work on a salary that you may find affordable. Also, consider hiring part-timers, and by saving costs, you may be able to meet your other financial requirements.

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Put systems and procedures in place

HMRC requires that all businesses keep clear and logical financial records, so put technology to good use and simplify all systems and processes.

While on the subject of technology, you might want to consider whether business needs are being met by your current software. If not, have a look at industry-specific management information packages. They will support business growth by providing real-time data that offers agility should your market change.

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Hire the right people

Ideas themselves are not worth much- it is the people behind them that matter most. So if you have got people onboard who do not share the same vision- change them. You need to hire an ‘A-grade’ team, you need to surround yourself with ‘A-grade’ players.

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Sell your product in an unfinished state

Believe it or not, there are customers out there who are willing to pay for an unfinished product or service so that they get to use it earlier than others. Online businesses which create software can benefit the most from this strategy. They can release their unfinished software to zealous customers and can get valuable feedback from them. This feedback can help them tweak the final product before the release date arrives.

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Adapt & Reiterate

Build, test, iterate, reiterate, pivot. You know the rest. Frequently the first product that a startup brings to market will not meet market needs. Every startup ever created has changed direction at some point- it is impossible to predict every single step that needs to be taken accurate

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Have a long-term focus

Performance metrics should always extend beyond short-term revenue. Too frequently do startup entrepreneurs focus upon instant short-term results rather than building a business. Focus on making a sustainable business model, not a ‘get-rich-quick’ scheme.

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Generate Revenue

No. Then don’t quit until you are. Yes: great – generate more, a lot more! No idea how? Time to get a clue or get off the field. Not counting social enterprises, a business which isn’t generating revenue is not a business; it is an expensive hobby. Revenue, customers or a clear go-to-market strategy are already more important benchmarks of success in Europe for VC’s. In a more difficult environment, they will become the minimum needed to secure a meeting with a VC.

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Raise investment while you can (if you need to)

While startups are still sexy and viable (to investors and the general public: crowdfunding) get as much cash in the bank at the most favourable valuation you can get. The money will only get more expensive later on. Make sure as little of it as possible is debt funding. Loan notes which can be converted will be when upstream funding starts to dry out for VC firms.

 

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