In 2014, Small to Medium-sized Enterprises (SMEs) accounted for 99.3% of all private sector businesses in the UK, with 62% of all businesses being run by a single person. The fact that SMEs, in the same year, employed 15.2 million people and had a combined turnover of 1.6 trillion is a testament to how vital they are to the country’s economy. But many people are still scared to take that first step and set-up their first small business, which is why at UWD we thought a few start-up tips might give you the confidence to take the plunge. Of course, not all start-ups are immediate success stories, but these are some essential things you need to do to give your newborn business the best chance to grow into something bigger.
- Ask yourself, “Is there enough demand for this?” If you have an idea you think is great, you need to consider whether it’s a ‘must-have’ or a ‘nice-to-have’. Consider whether or not people will want it enough to buy it, especially in the current economic climate, when few people can spare the money for luxuries. Or you could consider whether you want to market a luxury item at a more accessible price, such as quality, homemade jewellery – a common craft many who opt out of work to start a business undertake, as it may be a skill they’ve developed as a hobby.
- Remember, your idea doesn’t have to be new. There are so many variations of the same product from different companies offering different prices and levels of quality, there doesn’t necessarily have to be a ‘gap in the market’. Trying to sell a new product can be tough, but if you can find a niche quality of your particular product, you’ve already set yourself apart from competitors.
- Research your market and industry. If you know your market better than your competition, you already have the upper hand. Carry out as much market research as possible, focussing on areas such as demand, the size of the market and, of course, your competitors. Your pre-startup research could also include talking with potential suppliers, customers and distributors. You can never do too much research.
- Be honest with yourself. Before embarking on this journey, you need to assess your personality, and be honest with yourself about your personal weaknesses. Can you take criticism well? Can you work long hours? Will you be able to cope with the financial insecurity? Will you persevere, even if things are tough to begin with? It’s important to indentify what you do well, and what you could do better.
- Start off small and test the water. As a precaution, it’s often best not to drop everything you have going on in life to start your business off. By sticking with your current job whilst floating your idea, you can evaluate how successful your business may be, whilst not risking anything financially.
- Two heads are better than one. The advice of a good mentor could help your start-up enormously. With the help of a friend or family member with experience in business, you can learn about common start-up mistakes and what worked best for them. Even if their experience isn’t in your potential market, consulting them will still be beneficial. You may also want to consider giving them a share of the profits or equity in your company for their help.
- Invest a lot of time in your business plan. This will be the cornerstone of your business and, whilst being slightly flexible, will help keep your business on the right track so you can spot when things aren’t going to plan. Try to keep it between 3 to 10 pages of texthighlighting the important points of your plan, with financial figures at the end. You should include long-term objectives, estimates and forecasts. it’s important to have a plan to show to outsiders if you need to raise money
- Go overboard on the Marketing. This doesn’t just have to be once you’ve moved into your offices, or set up your industrial unit. Marketing can begin the minute you set up your business to create a buzz for your opening day. In the 21st Centruy it’s crucial to at least have a website and social media profiles. Both keep your customers updated, as well giving your company a professional image from the word go. A website is a bit like a shop-front on the high street, and an attractive one will draw in customers better than a run-down one. E-mail marketing is also a great way to take your business straight to customers, and a blog adds a personal touch to your product, as well as keeping clients informed.