Guest post by Innovate UK
Anyone who has started their own business will know just how difficult it can be. Roughly half of all start-ups fail within their first five years. This sounds like a scary figure but think about the half that actually succeed and build a business model that will actually last. When it comes to the beginning of your life as a business owner, things can be daunting. There’s so much to consider, so much responsibility, so much that can possibly go wrong. Don’t stress, we've got four simple tips that can prevent your start-up from going under before it’s got off the ground.
You need to look at your idea objectively. Your business should either satisfy a need or solve a problem, if it doesn’t then there’s no reason for people to use your service. Then consider whether your company is disruptive, by this we mean whether it will disrupt the already established market. The more disruptive your company is, the more likely it is to succeed. Then you must question whether you can actually monetise your plan, it is amazing how many solid business ideas are brought to fruition which can’t make any revenue. Finally, you need a unique selling point, what actually sets you apart from the crowd?
Solid research is imperative to success. You need to be aware of your demographic, who your niche market is and whether that niche market will actually pay for what you’re offering. Consider the growth of your sector, if it is in decline then maybe you should reconsider entering it at this stage, if it is growing then you mustn’t neglect the possibility of new competition joining you. You must always be realistic about your numbers, costs and price points. Look at the competition and gauge how your prices compare with theirs. Think about indirect competition as well as direct.
Get Working on Your Hit Squad
Your dream of owning a business is becoming a reality, now you must build a team. Be careful about this decision. Think about the structure of your team and whether you’re looking for co-founders or employees. You need a team that will help take ownership and deliver results. The people you take on at the early stage could be the key to your success or failure so be sure to choose carefully.
Get Your Numbers Right
It is absolutely imperative that you have a long term financial plan to avoid any hidden surprises further down the line. Your initial cash won’t last forever so be aware of when you’ll require a round of investment or when you expect to start making revenue. When you do start discussing your future revenue, be realistic about how popular your service will be in the early days. Don’t forget to factor in production and staffing costs to your financial plan.