So you’ve got a cool idea that will solve 1000’s of people’s problems or maybe even change the world, but what proof do you have? What research have you done? Many first-time entrepreneur’s leave out the research part until after they’ve created their product, but this can be detrimental to your businesses future success. From researching product/market fit to your competitors, research is vital for completing a solid business plan and attracting potential investors.
The Laws Or Licenses Required
Do you know the laws in your industry or whether you require any licenses to set up? Whether your business is photography, software or consultancy – there’s a chance that you will require a license. You must get these in order before you start trading or you can end up with hefty fines – which could put you straight out of business. If you’re planning on running an event with live amplified music, you will need a license. The same if you plan to serve alcohol. Most businesses are no longer required to register their business with the local council.
For UK based business, the UK government has a License Finder tool on their website.
What Business Structure Do You Need?
There are many business structures to choose from like Sole Trader, Limited Company or Public Limited Company – what would be best for you? Talking it through with an accountant that specializes in small businesses and startups is your best bet – every persons situation is different! A sole trader is the easiest to set up, however you are personally liable for all financial and legal responsibility whereas a Limited Company is a completely separate entity and involves much less risk.
How Will You Live Until Your Business Earns?
Many first-time entrepreneurs think that they are able to take money out of the business almost straight away, but this is very rarely the case. Have you thought about how you’re going to sustain yourself for the first few years? Do you have savings in your bank? Cut back on the luxuries and work out all of your outgoings and how long you can live with any money you have saved, however if you have no savings and a lot of outgoings (like a mortgage, car finance) then I would consider freelancing or getting a part-time job.
Do You Need Insurance?
By law, any vehicle you drive for business must be insured FOR BUSINESS. If you are found to be using your car for business and it’s listed as Social, Domestic & Pleasure then you are liable to be fined. Some businesses that sell products will require insurance called product liability insurance, which protects you if you product causes injuries or damage to a persons property. Other insurance that you may require include Employers Liability Insurance (if you have employees) and Public Liability Insurance if a member of the public will be entering the premises, even just for a meeting. If you are holding stock, I recommend getting your stock insured just in case of any theft, damages or even natural disasters.
Who Are Your Competitors?
Have you thoroughly researched to see if anybody is offering the same kind of product as you? Keep an eye on your competitors and what works for them and what hasn’t worked. You can have a slight advantage by noticing any mistakes or downfalls that they have had and making sure you don’t do the same. The more successful companies in your niche can be an awesome source of ideas for marketing campaigns, business strategies and can even tell you which Social Networks will be good for your business. You should also test out your competitors products and see what improvements you could make to your own. Listen to their customers and see what they want, and try to implement it into your product or service.
Tip: Write down your competitors strengths and weaknesses, and then your own and compare. What could you improve on?
Who Is Your Target Audience?
Who is your product aimed at? Who did you create this for? Define your target audience as much as you can by sending out surveys or attending focus groups, heck even Twitter polls can help you out! If you create a product to appeal to everyone, it will appeal to nobody. Keep your target audience in mind with every aspect of your business, from web design to the way the product works.
Think Of A Business Name
The general rule of thumb is to keep your business name under 15 characters. Think of the bring brands, they don’t have long names – Coca-Cola, Apple, McDonalds, Fruitworks ;), Debenhams, Fenwicks…. They’re all short! Your business name can be changed at a later date, but rebranding your company can be difficult. Make sure you choose a name that is catchy, memorable and is right for your brand. It should be unique enough for your audience to remember it and also easy to understand. Check that your business name is available as a .com and .co.uk domain. You can find out if your chosen name is protected by a trademark here.
Did You Know – Steve Jobs named his company “Apple” while he was on a fruitarian diet and had just come back from a trip to an apple farm as it sounded “fun, spirited and not intimidating.” He also wanted to be above Atari in the phonebook!
Branding Your Business
After you have your business name and your target market figured out, now you must work on your branding. Your brand is what your audience sees when they visit a trade stand/website/shop and feels when they hear your brands name. What colours will you be using to represent your business, what tone of voice? How do you want your business to come across to your audience, more importantly how do your customers want to be spoken to? I would recommend writing some brand guidelines as soon as possible so if you do employ someone, whether freelance or full-time, they will be able to refer to it and keep your brand’s voice consistent.
Research Funding Options
Do you know the funding options for your business? Whether you’re looking for investment or a grant, you need to work out how much you will need and what the money will be used for. Whether you’re thinking of taking out a startup loan (Virgin Startup has some great options!) or funding via grants, you will need to have a solid business plan and financials along with a cash flow forecast. There’s a great Q&A here which will help you understand getting funding for your business. You can also find a list of UK grants and funding options for small businesses on J4bGrants.
How Will You Market Your Business?
You’ve got an amazing business idea, but nobody knows about it. Do you have an action plan on how to get traction? You should! After researching your competitors, you should have a rough idea of what others in your industry are doing. Write a marketing plan for both digital and in person and set yourself goals for every quarter in your first year. Then you can work on a strategy for you to reach these goals. Don’t just think about Social Media Marketing, you should also consider speaking to journalists who write about your industry and even local business editors. We have some tips for marketing on a budget here.
Tip: A marketing plan can easily be adapted if need be, it’s not 100% set in stone.