5 Questions You Need To Answer Before Starting Your Small Business
Is now the best time to start a small business venture with the financial challenges that face us all?
The UK is one of the best countries to start a new business. In 2022 around 750,000 businesses were launched in the UK. The average five-year survival rate for a new business is 42%. The business challenges we all face are:
- Getting and keeping financial backing
- Rising energy costs
- Finding and keeping customers
- Disruption in supply chains
- Finding and keeping skilled staff
If these points make you pause. Think again. But if you still have the confidence and passion for facing the business challenges ahead. Read on to see the questions you should be asking yourself and some tips on resolving them.
Comfortable and Easy are short term friends but long-term enemies. If you’re looking for growth, choose the challenge.
Steven Bartlett
1. Do You Have The Right Business Skills?
Suppose your new business has developed from a side hustle or hobby. In this case, you will already have most of the experience required. But what if there are gaps in your business or technical skills? Let us see how we can start to fill them.
If you need advice on aspects of running a business, there are plenty of associations and social groups, such as LinkedIn, Medium and Inc that you can call on for support and as a sounding board.
And if this fails.
You can always employ someone with the relevant business or people skills you lack. If cost prevents this option, why not upskill yourself using free resources or a low-cost online course from providers such as Udemy, Skillshare and MasterClass. Another option to explore is freelancers; you can source these from the local community or online. Be aware that skills and experience will vary greatly it is always wise to get references. Accepting that you cannot know everything and devising a solution to these challenges will give your business a solid foundation to build on. But if you have yet to gain experience running your own business and the different processes involved, you will need help. Most new businesses fail because their owners have the trade skills but not the business skills to back them up.
The core business skills you will need or will have to hire in
- Managing the company finances
- Customer service, sales and marketing skills
- Leadership
- Managing projects and planning ahead
- Managing your own time and learning to delegate
- Problem solving (creative or otherwise)
- Networking
If you lack these core skills, getting the right people with the right experience will be imperative.
Matthew Syed has some insightful tips in his book Rebel Ideas about hiring for diverse thinking and skills in a business.
2. Is Your Business Idea Unique?
Is your business idea unique? Some entrepreneurs say that no idea is unique innovations build on and combine what has gone before, but in a new way.
If you plan to lead the market you need a unique business idea. However, if you plan to follow the market leader, to ensure success your business should be different enough to stand out from its competitors. This difference may be in its efficiency, cost, service, friendliness, support or quality.
Drill down enough into any business idea, and it is possible to make it unique by finding a niche you can explore. For instance, if your vision is to sell blankets, why not just sell dog blankets? If that is not specialist enough, sell dog blankets with the dog’s name printed on them or glow-in-the-dark dog blankets, or combine both. Always test the viability of your idea with research before committing too much of your initial capital. Search online and see if anyone has a product or service similar to yours. What lessons can you learn from them? Can you improve on their offering? Also, research potential markets for your product or service. Will the market be big enough to create the profits you need to sustain a business? And is there a need for what you are selling?
Are You Solving A Real Problem That Already Exists?
Some entrepreneurs convince themselves they have solved a problem when what they have done is invent a problem. That is why early consumer feedback is so valuable.
You must be honest with yourself and have people you trust who will be honest with you. Not people who will tell you what they think you want to hear but people who will tell you what you need to hear.
There is no substitute for in-depth testing and target market research before taking any idea to market.
New businesses should put themselves in their potential customers’ shoes. What would they expect to land on and see? What is it that they are looking for? And, above all, how are they going to buy?
Deborah Meaden
3. Have You Thoroughly Researched And Tested your Idea And Target Market?
There is no substitute for extensive testing and research. But having said that, getting your idea into the marketplace early and getting live feedback from real consumers is invaluable.
Whether you do this research or buy market research depends on your available budget.
The four market research types are surveys, interviews, focus groups and customer observation. The more you understand your consumer, their habits and their customer journey. The more you can tune into their way of thinking. This knowledge will help you identify their pain points and inform your product or service development. Understanding the customer journey online and in real life will help make your product exactly what your customers want. The better your product solves their existing problem, the higher the potential market (and potential profits for you).
Some pointers When Conducting Target Market And Product Research
- Keep in mind the personality and demographic of the participant when measuring results. Grouping participants with similar characteristics may be beneficial
- Use language that is easy to understand to cut down on confusion
- Provide enough information in your question
- Avoid ambiguity by asking two questions in one
- Ask the same question differently to clarify and dig deeper into the answer
The results of your research may catch you off balance with results you were not expecting. If so, think about a pivot your idea could take based on the results. For example, Starbucks initially started selling espresso machines and coffee beans. When the CEO took a holiday in Italy he returned with the idea of selling premade coffees to the consumer.
As you can see, even if the research results are not what you expected, you can still snatch victory from the jaws of defeat. However, without adequate research, you will be snatching defeat out of the jaws of victory.
An important entrepreneurial skill is the ability to be creative and turn a problem into a solution.
You cannot learn to be an entrepreneur by reading a book. You can only find out by giving it a try.
Alan Sugar
4. How Will You Sell Your Idea To Your Customer?
What form will your idea take? Should it be a service, a product or an app?
Spend time considering this point; the wrong choice will cost you money that you could spend elsewhere.
Apps are like catnip at the moment, but pause for a second and take stock. What is the very best way to deliver your idea? Could the cost and time of creating an app be better-used training staff to provide the same outcome as a personal service? Or would an app offer something that only it can achieve relevant to the delivery of your product? Once you have developed your product, what is the best place to sell it? Which media will better serve the idea? What will the spend be to gain the desired traction? The social media choices are vast, but advertising, SEO, exhibitions, one-to-one selling and video have their part to play. Your specific media mix will depend on what best serves and shows off the product or service you have developed.
Businesses with small budgets always try to do their marketing in-house. However, unless you have an in-house creative and marketing team, there are better options than this.
Specialist experience and insights will always make better use of any marketing budget available.
5. Do You Have All Your Marketing Assets Ready To Go?
Whatever marketing assets you use should be unique to your business to be effective.
At the centre of your marketing should be a unique thought or positioning statement on which all assets focus. Doing so will empower your brand.
Your brand personality should stem from your customer research; it should reflect them and what they desire. The language your brand uses should be the language of your customer. Write for the everyday person and write how you speak in your authentic voice. This approach will make your brand relatable and create an emotional connection with your customers that you need to make your business a success.
Every customer contact point with your brand should reflect your unique tone of voice and ethics. In all customer communications, the message should be what you can do for them and how you will make their lives easier. Your brand, website, content strategy, adverts, videos and social all need one unique thought communicated clearly and honestly. Think of your brand as an ecosystem that customers visit from time to time. Is it friendly, relaxing and comforting? Will customers want to spend time there? How will you reward them? What is the benefit for them?
Here are some examples of this:
- Google’s mission is to organise the world’s information and make it universally accessible and useful.
- BMW – The ultimate driving machine
- Headspace has one mission: to improve the health and happiness of the world.
What is your statement of purpose? Does your brand measure up to the biggest and best out there? If not, you may need help.
If you don’t have confidence and belief in your business idea, why should anyone else? As an entrepreneur, your greatest ally is yourself.
Peter Jones
Your Small Business Journey Should Only Start If You Have The Following In Place.
- You have the strength of personality to see it through
- Your idea is unique or different enough, with a clear benefit that your target market desires
- You can build brand longevity and a strong customer bond
- You have the experience needed, or you plan to employ experienced individuals with the relevant skills
- You have a trusted support structure in place for ongoing advice
- You have all the media assets for launching your new business
Starting a new venture can be challenging. I hope this article has given you some idea of the foundation you need before starting your small business.
Thanks for reading
Photo by Emily Morter on Unsplash