We have all had that eureka moment, “That should be a business” you say. Or “I could make millions with this idea” you think to yourself. “I could do better” you shout at the TV whilst watching Dragons Den.
However, the main reason most of us don’t act upon these thoughts, no matter how good the idea, is that we all know the complexities and all demanding necessities of starting a business, giving it all up to work for yourself can seem both exciting and also very terrifying. So we have shared our top 5 business tips for startups!
The reality is that now one in ten people in the UK own their own business. With the difficulties induced by a turbulent economy. The necessity for self-employment and new business opportunities has become more and more pertinent in recent years.
However maintaining an encouraging outlook on starting a business is often overshadowed by overwhelming statistics. The majority inspiring pessimism.
More than 50% of startups fail in their first year and become redundant.
The leading causes of startup failures include:
Incompetence – 46%
Lack of managerial experience – 30%
Neglect, fraud – 13%
Lack of industry experience at 11%
Credit to smallbiztrends
Having said that, there is a plethora of information out there for those of us who are brave enough to take the plunge and start up our own business doing what we love.
Here are our top 5 business tips for startups!
1. Learn your craft
We all learn on the job from time to time but this is not the right ideology when it comes to running your own business. Many successful business owners spent years perfecting their craft before they invested any money into their potential business. Invest in yourself first, your skills, knowledge and expertise will take you a long way towards your business goals and will be the perfect foundation for your new career.
Nothing you do goes to waste. We are instinctual creatures and actually learn much more from our mistakes than our successes – you wouldn’t eat a poisonous berry for a second time.
2. Understand your customer
Going into business without sufficient market research can be a killer from the get go. I’ve seen it before and I will see it again. If there isn’t a demand for your product then why waste your time.
You may think you are onto something, or be so confident in your designs that you know it will sell. The reality is that most of us aren’t blessed with a commercial and psychological understanding that is sufficient for overnight success.
Even someone as gifted as the designer Tom Ford will have done his market research or been aware of a demand from his previous roles.
Spending your initial investment on designs to hand over to manufactures, without market research, is like going in blind. You need to know what your customers need before they want it, and before it gets anywhere near launch.
Yes, market research can be hard to do when you don’t have any customers but there are a bunch of businesses out there that are set up to help with this process. They can provide you with willing applicants (Guinea pigs) that are willing to test your product and give (startups) life changing feedback.
Alvin C. Burns and Ronald F. Bush highlight the steps to performing excellent market research in their book ‘Marketing Research’. These include;
- Establishing the need for market research
- Defining the problem
- Establishing research objectives
- Determining research design
- Identifying information types and sources
- Methods of accessing data
- Designing data collection forms
- Sample plans and sizes
- Collecting data
- Analyzing data
- Preparing and presenting the final research report
Again, there is plethora of information and books out there that can help you with this absolutely fundamental step.
There is another method that I think is a magical method for budding entrepreneurs..it’s called growth hacking.
3. Growth hack
Growth hacking. A term you may well have heard of.
Wikipedia defines growth hacking as ‘a set of both conventional and unconventional marketing experiments that lead to the growth of a business. Growth hackers are marketers, engineers and product managers that specifically focus on building and engaging the user base of a business.’
Growth hacking is generally a term that applies to marketers, but the same techniques can be applied to those who are designing both product and service type businesses.
Let’s jump into an example. Say you are designing an online platform that connects users X to customers Y. Your initial design phase is complete, you know who you would like to use the service and are close to launch.
STOP. You aren’t ready.
The product needs testing. It needs to be optimised before launch. This is where growth hacking techniques come into play. Start by testing your platform in a closed environment.
Get 10 – 20 users who are interested in the service and allow them to run riot. Get them to give feedback and monitor them closely – then optimize. (You can inspire people to sign-up by offering exclusivity, a technique used by Mark Zuckerberg of Facebook. Exclusivity in itself can create demand).
These initial samples can be in the form of focus groups but must remained closed and exclusive to a small number of participants.
Repeat this process with the same users whilst adding an additional sample. Already, you have 30 – 50 people actively using the service and you are yet to launch.
Repeat the process over and over, moving through Alpha and Beta stages, filtering in more and more users. By the time you come to launch your product/service will be optimised, tested and most importantly you will be launching with a customer base!
This is common technique used by video game manufacturers who usually launch their new games with player bases made up of thousands of players.
4. Write a business plan
A business that intends to return a profit will make use of a well thought out business plan. You can download a template for a business plan from the princess trust. Their site is a great resource and provides great tips on writing a business plan. When it comes to investment it will be important that you can present a well written and polished document.
A business plan will help you to determine your company’s objectives. If this is clearly laid out, then when you inevitably come to find difficulties – the plan will stand as a resource for you to refer back to and may help you to maintain your focus through difficult and challenging times.
A business plan isn’t just a tool for investment it’s a tool for understanding how your business is put together.
5. Find mentoring and free consulting
A final tip would be to seek free help and advice, and there are many ways of doing this;
Firstly, there are number of online resources available. Blogs, magazines and free consulting can be found in the most unusual of places. Sign-up for services and await a sales call. You don’t need to pay for a service but in selling you their product a sales person may impart great advice or knowledge that you can apply to your business. Many business will do free audits of your site in order to persuade you to pay for their service, more often than not this information can be incredibly useful.
Why not join a shared work-space? You will meet a bunch of entrepreneurs, many of whom will be happy to help you and impart free advice and consulting. They will be more experienced than you and will help instantly ad they will have already overcome the issues you are facing and yet to face.
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