Where to begin when setting up a start-up business

As a result of changes in the economy due to covid it is highly likely that the amount of people starting a business will be higher than in prevous recent years. It makes perfect sense setting up your own business if there are limited opportunities available for both full and part time employment, as long as your business idea is sound.

 

Having worked with multiple start up businesses over the years we thought it would be great to put together some advice when it comes to planning a new business. It will also help you to understand whether your idea is viable or not. Sadly ¾ of start-ups fail within the first three years (a big percent of those within the first six months). So researching your business idea before you commit to setting up will help you to find out whether or not you should take the plunge.

 

Market Research
Competitor analysis is very important when it comes to research. It will help you to understand who else is offering what you are considering doing. You can learn so much from it. For example what mistakes can you see they have made? How can you do it better? It will also help you to work out what you could potentially charge for your product or service. Perhaps you can improve on what competitors offer and enhance your offering. If your potential competitors dominate a market space then try and look at what they don’t offer or cater for. You will then have a chance of winning a share of their space. If you are in a niche market with little competition then how can you ensure that potential customers choose and find you? The more time you spend looking at your market and the competition, the more information you will have when creating your business plan. This research will also help you to identify your USP (unique sales proposition) as it will enable you to define what is special about your offering (this could be your product, customer service experience, after sales support, price etc.). Ultimately, this could be the way that your potential customers choose you over your competition.

 

Your potential customers
It is very important to clearly identify your target audience. I have met with many businesses over the years that have said they sell to everybody. By trying to appeal to everybody will ultimately appeal to nobody. Consider what your offering is (including your USP) and think about who would be your ideal target. Perhaps you could conduct your own research to see if you can work out your audience (online survey, focus groups, via social media and via your own connections). For some businesses it can be quite easy to identify a target market, for example an accountant may wish to work with just sole-traders, or perhaps within a set area of where they will be located. However, for other businesses, such as one that has a niche product, then you really need to identify who it is you are selling to. Especially if you are going to be manufacturing or a purchasing products to sell because if you get it wrong then it is likely you have wasted a lot of money.

 

Route to market
Once you know what you are offering, how much you will charge and who you will be targeting to offer it to you can then research and plan how you would get it to market. There absolutely is no point having this amazing idea if nobody knows about it. You need to think about what you do to get your name/product/service out there. Within your customer analysis you would already have an understanding on the routes they take. For most start-up businesses sadly there is not the luxury of having a huge marketing budget. So start small and focus on who, where and how you can get your name out there. By identifying this, it will help you with the creation of your business plan followed by your marketing plan. It will also enable you to consider how much money is needed to invest in getting it to the market place. There are so many different routes, some will be very expensive and others could possibly involve just your time. Also, think not only about your potential customers but what other business relationships you can build as ultimately these people could be part of telling others about your offering. Here are some considerations to get you started:

  • Business networking events (most of these you will find at present are virtual)
  • Tradeshows and industry events (do bear in mind for some industries these have been cancelled this year)
  • Craft fairs, Christmas shows, fetes (again this year many of these did not happen)
  • Online (brochure website or online shop)
  • Social media
  • Advertising (digital, billboards, paper, magazines, bus stops, buses, online directories)
  • Telesales
  • Retail shop, concession or market stall
  • Part plan (again at present you will find that most of these are happening virtually)
  • Sponsorship
  • Publicity article
  • Launch party

 

Business planning
Once you have carried out the research you will have a better understanding of what it is you are going to be offering, who you will offer it to, how they will buy it and whether there is a market for it. If at this point you have a viable business based on initial research you then need to take the next step and create a business plan. This will enable you to understand every aspect of your business and what is needed to set up and then run it. There are many tools available to help you with writing a business plan that are in most instances free to download. If you are needing to borrow to set up you will be required to provide a business plan so the investors can read it and ascertain if it is a business worth investing into. You will then use your plan to initiate all of the elements needed to start the business

There will also be many other key elements you need to consider if you are going to move forward with your business.

 

  • Will you be a sole trader, limited or charity (you can find info about the differences via HMRC)
  • Which accountant should you use (ask your networks for recommendations)
  • Which bank should you use to run your business (research online for best banks for business)
  • What insurances do you need
  • Do you have the skills, experience or training needed for your business or will you need to retrain
  • Will you need staff, if yes how do you go about recruiting them and setting up HR procedures
  • What equipment or technology is needed to start-up
  • Do you need licenses for your business or specific legal requirements (e.g a dog breeder will need to obtain various permissions from the local council in order to breed)
  • How will you fund your business (savings, bank loan, investors, family or grants)
  • Who would be within your supply chain
  • How much money do you need to earn to be able to pay yourself and live
  • Would it help having a business mentor
  • How long will it take before you can launch
  • When should you leave your job if you are in employment

 

Business name
To be able to borrow money, get a bank account, create your brand you will need to name your business. Do ensure you spend the time thinking about your name and ask others within your business network and family/friends network their opinion. Over the years we have seen so many businesses come in and say they don’t like their name or brand and feel it is now detrimental to the business. It would be better to get this right at the beginning as rebranding at a later date can be expensive. Things to consider when naming your business:

 

  • What does it say about your business
  • Does any other company already have that name
  • Is there a domain name available
  • If people abbreviate what impact does it have on the name (Del Boy from Only Fools and Horses renamed his business to Trotters Independent Trading his brother Rodney pointed out the company was now called T.I.T. Yes I do appreciate this is fiction but I assure you it does happen in real life!)
  • Is it easy to pronounce and spell
  • Does it define what you do

 

Marketing
Once the name is created you can then start to consider the creation of your brand, but before that happens you need to create a marketing plan. Within this plan you can break down all of the components needed to set up, along with the items you need to create to get your business to market (as per your initial research) and of course run it. If you are not able to afford to outsource your marketing to a company like S.C. Agency then you could google and find free templates to help you create a marketing plan.

 

Just like your business plan your marketing plan will help you to identify what you need to do, how long it will take to do it, what professional help you will need, what you can do yourself and the costs associated. Your costs will include those to get your marketing tools created so that you can get your business up and running along with costs to get your business to market.

 

As with your name do ensure you spend time creating your branding. There are six steps to building a successful brand – define, develop, apply, communicate, protect and build. Who will you use to create your branding (S.C. Agency of course…). Do remember that this is not just somebody creating a logo it is everything that encompasses your business. For example product packaging, colours, stationary, imagery, tone of voice, fonts used, straplines, USP’s, all of these will then mould what your marketing tools will look like such as your website, adverts, social media, graphics..

 

Starting a business is exciting, daunting and can be quite tough especially when it comes to the financials. 50% of small businesses avoid having a website created, although they want one, simply because they either don’t have the skills to create themselves or just can’t afford one. There are now web building tools available if you want to have a go at creating your own site, alternatively you will also find web agencies offer start up design packages or payment plans (S.C. Agency offer both of these to new business). This year out of all other years we have certainly seen the importance of having online presence especially during lockdown. We do not anticipate this changing in the foreseeable future as businesses need to embrace digital marketing, especially if we are not able to do face to face business.

 

Other considerations:

  • Invest in a business domain name that can be used for your email address rather than a hotmail or gmail address
  • If you have business cards or brochures do not try and print yourself
  • If you are appealing to a premium audience then your marketing needs to look premium
  • If you plan to invest money in advertising, make sure it is the right form of advertising
  • If money is limited avoid the splatter gun approach of trying to do lots (but not very well), limit what you do but make sure you do it well
  • Before you approve and sign off any design work that includes social media info, make sure you have set up the social media accounts first (just in case they are already taken)
  • Do not try and do all types of social media, only those that are relevant to your audience or those that you can manage in your own time (if you are not outsourcing to a social media company)
  • Follow your marketing plan and ensure you update it (including monitoring marketing spends so that you can identify your budget for year two)
  • Outsource where you can as your time will be better spent on the elements you do well
  • Monitor all marketing
  • Stop elements that do not work (but do make sure that you allow enough time to determine this and look into why they are not working, they may just need some tweaks )
  • Ensure you continue to invest in those that do work (constantly review and adapt if applicable to improve)
  • Track your website using analytics
  • Be positive when promoting your business, negativity is never great
  • Continue to monitor your competition as they may have made changes that could impact your sales
  • Continue to monitor your market especially in case there are changes (for example technology updates, licenses and insurances etc.)
  • Enjoy being your own boss

 

S.C. Agency have been working with start-up businesses offering advice and creating the tools for businesses to get set up and grow since 2006. Their services include traditional marketing, digital marketing, branding, design, web design and print for business to business (b2b) customers and business to consumer (b2c) customers.  If you would like help with starting up your business then call 01536 648006 or email lorna@scagency.co.uk to arrange an appointment. If you are interested in finding out about the start up packages they have available then click this link.