With the economy still on the rocks, many people are solving unemployment problems by starting up on their own. But what do you need to know before you take the plunge? Here are a few tips on setting up in the world of small business.
What’s the idea?
Every small business starts life on the strength of a key idea. Not necessarily an invention or something completely new, this can be something which already exists, only done more efficiently, more compactly or for a lower cost.
Whether you want to produce menu holders for restaurants or bespoke suits for men, make sure there is a gap in the market for your product or service and enough service users to make it profitable. This will involve investigating existing brands and field research with potential customers.
Funding and investment
Getting a company off the ground does require a cash injection. Bank loans are still available, but increasingly tricky since the recession hit. If you don’t have enough savings of your own, there are several options out there.
You may be better off seeking an individual backer or ‘angel investor’ who may be interested in taking your business further. Another effective method is crowd-sourcing, where you offer up your idea – typically on the web — and invite several individuals to fund your project. The other option is researching companies both off line and online which offer, business loans such as BusinessLoansDirect.com.
Draw up a marketing strategy
The crucial thing for every small business is to have a business plan. This will include your services, aims and cost estimates but a large part should be devoted to marketing. Once you’ve acquired your capital and started providing a service, how will you promote it?
Again, research is essential in order to learn how other companies are gaining their customer base and also where they are falling short. Look into national databases for basic information and on social media sites like LinkedIn and Facebook to ascertain public opinion about your competitors.
Take control of your records
From day one, you should be maintaining accurate records of incomings and outgoings, customer details, suppliers and contacts. Build on a good solid foundation and you will thank yourself at a later date, particularly if you ever need to sell your company.
Good financial records also enable you to analyse what’s costing you money and where you could make more. A good business doesn’t stop changing, even once it’s successful. You need to be adaptable to market changes and customer needs at every stage.
This said, owning a small business should be about achieving job satisfaction. It can be exhausting work, with long hours and a lot of responsibility, but don’t lose sight of the values and ambitions that made you want to take the solo route in the first place. Finally, don’t be afraid to look outside for help. As your business grows, you may find additional skills and expertise useful and taking on a partner may enable you to take the next step on your business adventure.