Has isolation and the lockdown got your creative and business juices flowing? It wouldn’t be a surprise if it did. There is a global recession looming, and with that often is the birth of many new companies. This is because recessions cause massive disruption to the economy. While generally, this is not a good thing, it does have the benefit of forcing people to find new ways to survive, and often, this means starting up afresh. It creates a fertile ground for startups, and they can weather the storm, the disruption to the market can be a golden opportunity.
In this post, we are going to look at the things that you need to think about when starting a new business. Now, more than ever, you cannot afford to take risks, so make sure each point is
looked at before you begin to invest your time, money and life into starting something.
Who are you?
It is not easy to start up a company. However, the opportunity to make a tangible difference to others lives is very attractive, particularly given the current climate. There are no limits on who can do this. You do not need a college or university degree or qualifications or millions in the bank. You do not even need any prior business experience. What you do need are drive, passion and a solid plan.
Take a good look at yourself and your strengths, weaknesses and skills. How can you use these to your advantage?
You can have the best business idea in the world, but if it does not align with who you are as a person, it is harder to make a success of it. For example, there is almost no business on the planet where you can avoid talking to anyone, but if you are the sort of person who struggles with talking to people, an industry that is predominately client facing probably is not going to be your best choice. Conversely, if you are an outgoing and social person, an idea that sees you shut in a tiny room working on your own day in, day out is not going to be something that you enjoy in the long term.
Why are you starting a business?
Let’s face it; the overriding reason is going to be money. There is nothing wrong with that – whether we like it or not, it is what makes the world work now. However, if money is the only reason you might want to think again. Owning a business takes a lot of dedication, and it can be months, or even years before you reap the rewards. If you are potentially turning your back on job security or a career to take the significant risk of starting a business, you need to know why you are doing it.
If your business idea does not align with your personal goals and ambition, shelve the idea and find something that does.
What is your business idea?
Coming up with an idea for a business is easy. Turning it into a valid business is not. Explore as many concepts linked to your original idea as possible before settling on the one that you intend to take to fruition.
How to generate the idea:
Can you solve a customer problem?
What significant problems can you solve and how? Lots of companies started by finding a solution to a problem. People wanted fully electric cars. Tesla came along and did this, and are now a globally successful, multi-billion dollar business.
Can you give them a better solution?
Sometimes you may not be setting out to be the very first company to solve a problem, but to offer an alternative – and a better – solution. Can you do better than existing ones when it comes to cost, energy and innovation?
Can you do it cheaper?
Can you provide a significantly cheaper service to customers than your competitors? The dollar store is an excellent example of this – since their inception, they have used their low prices as the primary stand out factor to their competitor.
Can you be an innovator in a stagnated market?
Some fields naturally stagnant, or the rate of innovation slows right down. In many industries, particularly low-tech ones, companies are hesitant to push forward with change while the status quo is profitable. Can you bring something new, fresh and exciting?
Can you build for the future?
Instead of thinking about the here and now, think about how the world and business will look in a decade. Thinking ahead and into the future may open up new ideas, niches and markets. Take cryptocurrency such as Bitcoin, for example. Ten or so years ago, it did not even exist, but now there is a whole infrastructure and tech system built around it.
Know better, do better
Unless you are on the very cusp of technology and innovation, you are unlikely to have a genuinely unique business idea. Many of the biggest companies in the world were far from revolutionary but spent time watching how others did things and joined the market, knowing and doing better.
Can you go global?
These days, we live in an incredibly globally aware world. Thanks to technology, it is possible to run businesses in new and emerging markets. The conditions might not be right at home but are elsewhere.
Research your business idea
Now that you have your idea in place, it is vital to carry out some in-depth research to make sure it is viable.
- Is there a market for it, and is it big enough to support your goal? Consider the competitive landscape, market opportunity and threats.
- Is there a direct demand, or will you need to educate your customers?
- Will your business model work, given the current climate and your demographics?
It costs money to start up a business, some more than others. Depending on the sector, you may need specialist equipment which can be costly. For example, if you have decided to delve into the world of biotech, you may need to look at purchasing a lab fridge. However, someone working on their sofa may just need to upgrade their home computer system and buy some stationery.
Some startups decide to bootstrap for as long as possible in that they are self-funded, only using their own money. For others, this is just not possible, and they need external capital to start up. There is a wide range of ways to fund your business – angel investors, venture capital and business loans and grants are just some of them. However, in order to secure this funding, you will need a solid business plan in place, which leads us on to our next point:
Create a business plan
A business plan will allow you to organize your thoughts and plan your business in a structured way for both you and any partners and investors. A solid plan at the start can often be the difference between a well organized and successful business and one that fails at the very first hurdle.
Your plan should lay out your business goals and targets clearly. These should be SMART – specific, measurable, achievable, realistic and timely. You also need to include the steps that you are going to take to reach these goals. This will help potential investors and partners decide whether your business is worth investing time and money in.
Protecting your business
Once you have all the financial matters dealt with, it is time to start thinking about how you will protect your business. You may not need one straight away, but at some point, most companies will need some form of legal support, whether that is in the drawing up or terminating of contracts or protecting the interests of your business in court. Make sure that if you hire a legal advisor at some point, you always agree on an hourly rate and on the amount of time required in advance for any work so that you do not get stung for huge and unaffordable bills.
Creating a brand
Having an identifiable brand identity is crucial if you want your business to be successful, especially in today’s competitive environment. It is something that is relatively straightforward to do but does need thinking about.
It is easy to create your own logo on software such as Canva or Photoshop if your budget does not stretch to professional help. Keep it clean and simple and make sure it represents not just want your business does, but the message that you want to convey to your customers. Use this logo, along with your brand colors, on all stationery and marketing materials so that you build up a brand image that is instantly recognizable.
Of course, there is much, much more to think about when it comes to starting up a business, but if you have these things covered, you are in an excellent place to start growing and developing your idea.