It might be while you’re struggling with a spot of DIY. Perhaps it happens during the weekly shop. It could even come when you’re relaxing by the pool on holiday. But at some point in your life, you’ll be struck with an idea for a business.
A lot of people will write the idea off, telling themselves: ‘There must be a good reason nobody else has done it.’ Alternatively, they could be content with their current work / life balance, and unwilling to dedicate their lives to building a business. And with no guarantee that it will be a success, some people simply won’t have the necessary risk appetite to launch their own company.
More often than not, however, the thing that stops people taking the leap is a lack of experience. Selling a product will be alien to them, they’ll have no idea what marketing channels are available to modern businesses, and the extent of their tech skills will be opening an app on their smartphone. As a result, swathes of ‘could-be entrepreneurs’ kick their dreams into the long-grass and settle back into the nine-to-five.
Ultimately though, a shortage of experience is more of an excuse than a valid reason not to start a business. After all, the only way to gain experience is by getting out there and doing it. And that’s as true of entrepreneurship as it is with anything else in life.
Luckily for you, that’s not our only piece of advice. As supporters of small businesses – and having been one ourselves not long ago – we wouldn’t be doing our job if we didn’t help set you on the right path. That’s why we’ve compiled this cut-out-and-keep guide, which runs through the essential steps you need to take before launching your business to the world.
Of course, after reading this and (hopefully) putting it into practice, there’s every chance you’ll discover that your big idea wasn’t that big after all. But look on the bright side: at least you won’t have splashed all of your hard-earned cash on something that nobody is going to pay for. Better still, you’ll have the confidence, and experience, to try again when you have another flash of inspiration.
So, with that in mind, let’s get started.
What is your business?
At the moment, your business idea may only exist in your head. However, putting it down on paper will help bring it to life, and give you a solid platform to build upon. It doesn’t have to be a fully blown business plan at this stage; a short summary of what the business is, and how it differs to what is already out there, will suffice.
This can also be a good time to come up with a name for your fledgling company – unless you have already. Take a look at the rules for naming a business, and then write down a list of words that you’d associate with your own business. Once you have a list of 30 words, note down an antonym for each word. Then, without looking at your original list, come up with 30 words that are the direct opposite of the antonyms. There’ll probably be some duplication with your first list, but once you’ve repeated this process two or three times, you’ll have a decent bank of words at your disposal.
At this point, you have a couple of options. You can combine words to see if they form a new word that sounds natural, or you could look at foreign translations of words (or combinations of words). By the end of the process, you might have three to five names that stand out. If not, consider how you could incorporate your own name into the company’s name, or have a stab at some acronyms. If you still haven’t found something suitable, you could consider enlisting the help of a branding agency, or source the opinion of consumers when you conduct your market research.
You’ll also need a logo for your business. If your budget for this is minimal, which is likely, sites such as DesignMantic and Logomakr offer a free logo design service. Alternatively, look online for a freelance or independent designer that will charge less than the bigger, professional design firms.
Who are your customers?
Before testing whether there is any demand for your product or service, you need to identify the people who are most likely to pay for it. This will be your target market.
If your business caters to a very specific niche, that should make things a little easier. However, if it looks like it will appeal to a broader audience, you’ll need to delve a little deeper. Imagine, for example, that your proposed business is a low-cost ‘free from’ food retailer. It could be tempting to say that your target market is everyone that suffers from an allergy or intolerance. However, you’ll still have to break the audience down by gender, age and average income.
By doing this, you’ll be able to create a set of ‘customer personas’. These are fictional people with names, ages and personalities that match the profile of your target customer. Putting yourself in the shoes of your personas should give you an early indication of how people might respond to your product, and allow you to tweak it before testing it with real-life customers. As a rule, we’d suggest creating no more than three personas, otherwise you might be in danger of losing focus.
There are a number of customer persona templates available online, but it needn’t be anything too fancy. As long as you can present a clear picture of each of your personas, that’s all that matters.
Who are your competitors?
You might believe you’ve spotted a gap in the market, but that doesn’t mean you’ll be free from competitors. In fact, failing to check out the competition is one of the biggest mistakes that any entrepreneur can make.
Thankfully, in this day and age, most of the information you need can usually be found with a simple Google search. Not only will surfing the web help you identify the biggest players in your industry, but a quick glance at Companies House, Company Check or DueDil should give you a decent insight into their financial position. A scan of your rivals’ websites will also give you ample information on their products or services, while their social media accounts should offer invaluable insights on the approach they take to marketing and customer service.
Depending on the nature of your business, it might be worth doing some ‘offline’ research too. Taking the example of the ‘free-from’ food business, there might not be any other companies that cater solely to people with allergies and intolerances. This means the competition will come in the shape of supermarkets, as well as health retailers such as Holland & Barrett. Paying a trip to all of the retailers that stock ‘free-from’ products will therefore be a key part of your competitor research.
As you collate this information, make sure you’re compiling it in a simple document. This template is a useful guide, but a Google search of ‘competitor analysis template’ will throw back plenty of other options. Pick the one that works best for you.
Is there any demand for your business?
This is make-or-break point for any business owner. Quite simply, a product or service will only be commercially viable once it’s been established that people will actually pay for it. So, how can you assess whether there is any demand for your business?
With technology advancing at a rate of knots, there are now a number of avenues available to business owners. Sites like Instantly, UserTesting.com and AYTM (Ask Your Target Market) offer a range of tools to help entrepreneurs gather customer insight. Alternatively, you could create a simple survey using Survey Monkey, and push it out in a targeted Facebook ad. Just create a page for your business on the social networking site, and launch a campaign using its Ads Manager tool.
Using Google’s free Keyword Planner, you can also find out how many people are searching for terms related to your product or service each month. Likewise, Google Trends tracks historic interest in certain topics, allowing you to compare current levels of demand with previous months and years. Both of these tools can serve as a valuable part of your product-testing armoury.
Finally, crowdfunding sites like Kickstarter and Indiegogo can be just as useful for product validation as they are for fundraising. If your business is a creative or innovative product, launching a campaign on one of these sites, and offering small perks in exchange for people’s financial support, can be a great way of assessing how much of an appetite there is for your product. However, be prepared to put some time into creating a killer Kickstarter page, otherwise it could come back to haunt you.
Of course, if none of the above sounds appropriate for your business, traditional methods can still be just as useful. Whether it’s canvassing the neighbourhood with a clipboard or organizing a focus group, it’s essential to know that your product will sell – and sell well – before taking things any further.
How do you register your business?
You might decide to register your company at an earlier date, but it isn’t absolutely necessary until you start trading as a business.
One of the first things you need to decide is whether you’ll be registering as a sole trader, limited company, business partnership, limited partnership or limited liability partnership. The government’s official websiteprovides explanations of all of these business structures, so make sure you read up on what they all mean, and take additional advice,before deciding upon the appropriate model for your business.
Depending on what structure you opt
for, you’ll either need to register with
CompaniesHouse or HMRC.
However, limited companies will still need to register with HMRC for PAYE (if
and when they hire staff), corporation tax and VAT. In addition to the above,
there are a few other legal matters to consider during, and after, the
incorporation stage, which are covered in this handy
from Tech City News.
While it isn’t strictly part of the registration process, this might also be an appropriate time to register for a trademark, so that no other company can use your brand without your permission. If you’ve invented or designed a new product, you should also consider applyingfor a patent.
How will you fund your business?
By this stage, you should know how much it will cost to launch your company. Once you have this information at your disposal, you’ll need to decide how you’re going to finance the business until it becomes profitable. Do you have enough in the bank to get it off the ground yourself, or would you rather fund it with a mix of personal savings and external finance? If it’s the latter, you’ll need to decide what’s more important: retaining control of your business, or keeping the company in credit.
While equity finance – in the form of angel investment or venture capital – means you will have to sacrifice a share of the company in exchange for funding, debt financing entails taking out a business loan from a bank or alternative lender, which will be repayable over a set period of time. The government also offers support in the shape of its Start Up Loans scheme, and there are various grants available from Innovate UK, the European Union and local authorities. For more information on these schemes, and all other finance options, check out the Ultimate Guide to Business Funding.
Of course, the nature of your business will ultimately determine the amount, and type, of capital you are going to require. Yet in order to secure any sort of external funding, you’ll need to produce a business plan that offers a clear description of your company, explains its USP and includes your market research, competitor analysis and customer feedback. If you’re not sure how to format your business plan, have a search for ‘business plan templates’ on Google.
Most importantly, your business plan will need to show how your company is going to make money, and provide realistic financial projections for the months, and years, ahead. If you’re not confident enough to do this yourself, then it’s probably time to bring an accountant on board, or consider an online accountancy service such as Crunch or Xero. Last but not least, don’t forget to open a business bank account, if it makes sense for your company.
What is your ‘shopfront’?
If you’re planning to launch an e-commerce business, your ‘shopfront’ will be your website. Platforms like WordPress and SnapPages are your friend here, letting you build simple, attractive websites without needing much in the way of technical expertise. However, if you don’t have an eye for design or user experience, you’ll need to find a developer to build, and look after, your site. Bear in mind that you might need to offer a developer a fair share of equity, as well as a salary, to make the opportunity attractive enough.
On the other hand, if your business demands a physical presence, you’ll need to find yourself a suitable premises. Consider whether you’d prefer to buy or rent, work out a budget, and then search online for commercial property that’s available in the right location. If you’re opening a retail business, you’ll probably be looking for a spot that enjoys a high level of footfall, so try and visit the premises at least once before signing on the dotted line.
Once you’ve secured a premises, it’s times to get all of your utilities up and running. If you’re renting, some or all of these might be included in your rent (or covered by the landlord), but if you’ve bought an office or retail unit, you’ll need to set up new contracts with all of the necessary providers. There’s also a chance the premises will also need decorating or refitting, so if you don’t possess the necessary DIY skills, you’ll have to find a local decorator who can carry out the work on your behalf. Remember: kerb appeal is key!
What are the secrets of a successful launch?
A solid PR and marketing strategy should ensure that people know about your company before it opens for business. While you probably won’t be able to afford the services of an agency just yet, there’s still plenty that you can do to raise awareness prior to launch.
The first step is to identify the leading trade and consumer titles in your industry, and write a press release that answers five key questions. Who are you? What do you do? Where are you based? When are you launching? Why do you exist? Find a suitable template online, and if writing isn’t your forte, run it past a friend or colleague who can help knock it into shape for you. Websites such as JournoLink can also make the process a little easier for small businesses, and are well worth a look.
Your PR drive will need to be backed up with some targeted marketing. If you’re a high-street retailer, this might mean having some flyers designed on the cheap, and dropping them through letterboxes. Depending on your budget, you could even explore the possibility of a radio ad, in addition to a spot in the local newspaper.
Facebook ads can also be a cost-effective means of generating interest, with their local targeting capabilities making them a good option for offline, as well as online, businesses. You’ll just need to create a placeholder page on your website that says when you’ll be launching. It could even include an email field for people to register their interest, meaning you’ll have an engaged customer base before your business starts trading. We’d recommend Google’s G-Suite (previously Google Apps for Business), which lets you register email addresses that are linked to your company’s domain name.
Finally, you’ll want people to be able to find you when you open for business, so make sure you register your company on Google My Business, Yell.com and all other online directories.
Well, there you have it. Hopefully there’s enough here for you to take your first steps on an exciting new business journey. However, when it comes to something as big as launching your own company, you can never have too much information. So take the time to read everything that you can on the subject – including the other articles on our Knowledge Hub – and speak to anyone and everyone who you think could help. Good luck with your business!