Getting a start-up off the ground requires an immense amount of work. Even those with the most daring entrepreneurial spirit will find that it takes a lot more than start-up capital and a winning idea to be successful. In this post, we’re going to look at three key considerations that every new business owner should take to heart. Each covers a different essential aspect of running a successful business.
- A business plan is more than helpful.
Far too many inexperienced business owners treat a business plan like little more than a ‘good idea’. Something they really ought to invest more time in, but can probably get by without if push comes to shove. The problem is that getting by equates to missing out on how incredible things could have been. Indeed, without a business plan, you might as well be driving a car without the headlights on. Things could turn out okay, but it’s foolish to try.
In addition to an executive summary, a business plan will include the following:
- Descriptions of target customers, a description of the industry, unique selling propositions (USPs) and logistical considerations for operating the business.
- Details on how the business will manage to turn a profit.
- A market analysis along with a detailed outline of your marketing strategy.
- Projections of the market share you can reasonably expect to obtain.
- An analysis of how you (and your competitors) will position themselves.
- Specific information on pricing.
- Details on distribution, i.e. the process involved taking your product from its rawest form (from your perspective) and placing it in your target customers’ hands.
- Potential means of product promotion.
- A breakdown of your potential revenue.
As you can see, a business plan is not an easy document to put together. However, it is absolutely critical to the success of any serious entrepreneur. While it doesn’t guarantee profits, a plan will ensure that you’ll be better prepared for the challenges ahead, inasmuch as it has forced you to spend time thinking about your prospects in depth. Furthermore, a well-crafted business plan also lends credibility to your start-up, which means investors, partners and employees are all going to take you more seriously,
- Double down on the digital component.
The information age has really levelled the playing field for small businesses. Now it is possible to offer your products to a truly global audience – engaging with your target customers through social media channels and crafting highly targeted marketing messages that appear in front of consumers who are much more likely to resonate with your brand.
The following are essential ways in which your small business should be leveraging the capabilities of the Digital Age to full effect:
- Polish the website.
Obviously, all of your digital campaigns are going to centre on a well-designed and highly functional website. Social media engagement drives traffic here, online campaigns link back and potential customers who are interested in your services can easily find your site due to well-executed search engine optimisation (SEO) measures. Just remember, a website should be more than a placeholder. It needs to very intentionally guide visitors through the process of completing a task – whether that means making a purchase, signing up for a newsletter or simply giving you their contact info.
- Seize social media opportunities.
As mentioned above, social media channels such as Facebook, Twitter and Instagram are excellent platforms for driving traffic to your site. However, they can offer much more than that. A well administered social media platform is all about engagement. It gives you a chance to connect with your target audience, and also allows people who are passionate about your product or service to communicate with each other.
- Outsource customer service.
The Information Age has also made it possible to send some of your key customer service tasks to third-party agencies at incredible discounts. For example, you can have an agency answer incoming phone calls for you – speaking as a representative for your company and even taking down messages when appropriate. This frees up your in-house staff to focus on the tasks you hired them to complete, while also assuring that callers receive the best-possible service.
- Never underestimate the importance of cash flow.
Most small businesses begin with other people’s money – be it a business loan, an investment or even a family nest egg. The capital used to support the business in its earliest days was not generated through business operations. However, once the company begins generating revenue, trends in cash flow begin to develop.
Assuming you performed your due diligence on the business plan, then the revenue that the company brings in begin to exceed its overheads and operational cost before the start-up money runs out. However, without even thinking about debt and profit, it is important for small business owners to understand how much of difference cash coming into the company can make.
Even if you are living on borrowed funds, regular cash flow frees you up to pay for new stock, additional supplies and new employees to handle increased business. It also gives you the means of ramping up your marketing efforts.
With that in mind, look for ways to turn your existing set-up into hard, cold cash. Here are a few tips on how to accomplish that:
- Bundle services or products to add value without incurring significant expense.
- Conduct pre-sales to get products moving before you have even created them.
- Establish back-end services with your products as a means of reeling customers in and generating extra revenue from them.
- Create loyalty programmes to encourage repeat business.
- If you’re a service provider, offer clients a slight discount when they pay on an invoice early.
Any of the above can help your business generate extra cash flow at limited because, because none of them require you to create new products. In essence, you’re leveraging what the company already does to a higher value.
There’s much more to running a successful business operation than the above. However, each of the three areas that we covered can have a dramatic effect on your company’s success. By giving attention to each, you’ll be covering a broad range of concerns, setting the company up to thrive when other start-ups are still struggling to establish a foothold.