Launching a business can leave many entrepreneurs scratching their heads. Where to start? It seems like a monumental task, and it’s obvious that you need to get it right from the start. Nobody wants to be clearing up messes later – or worse, finding that the messes can’t be cleared up.
As so many businesses fail within the first couple of years of launching, your business will want to take as many measures as you can. There is plenty to think about, but with consideration it should be a smooth process. Scaling is one thing that may be on your mind; it has become a bit of a buzzword, and you’re probably wondering how important it is. Actually, it’s not so important right now, but we’ll get to that.
Firstly, let’s take a look at the six crucial steps when launching your business:
1. Get your planning right
OK, so a business plan is a useful element, but it’s not the only one. Consider amassing some real industry experience. There are many ways you can get involved in your industry; perhaps you could volunteer to help out with a similar business for a while to get an idea of their daily operations.
Your time is a fair exchange for good knowledge! Alternatively, you could try partnering up with an expert in your field. This might cost you something, but if it skyrockets your business, it’s worth it.
You can go ahead and write a business plan, of course. It’s not hard to find decent templates and it will get your thoughts rolling in the right direction. Business plans give you structure and a point of reference for the future. They’re also necessary if you’re planning to take out any kind of bank loan to finance your business.
Here’s one to think about straight off the bat: the corporate structure you start out with is very important so as to avoid tax or legal issues later. Many start ups set out as an LLC (Limited Liability Company) or an S Corporation. That way if you want to become a C Corporation later, the conversion process will be easier.
2. Do market research and run tests
You should seriously consider extensive tests on your business model and products before launching. That way any necessary refinements will be done ahead of time, saving time, money, and possibly even face. Your model must be solid from the start, so market research and testing is imperative.
This means more than just hitting the search engines. Real people will have real answers, and those who are already in your line of business know best. The same goes for those who already use your kind of products and services. Do market research to discover your target audience’s preferences and issues. Likewise, find out who your competitors are, and line up some reliable distributors and suppliers.
3. Organise your finances
Forecasting and budgeting are as important as good accounting. It’s crucial to keep on top of your finances so you don’t make any serious mistakes along the way. Make sure your accountant is reliable and that you have good forecasting tools handy. Keep on top of your books and budgets.
In terms of getting the funding in the first place, you have several options. You may be relying on owner’s capital, or you may be applying for a bank loan. Another alternative is finding an investor.
Some people borrow from close friends and family. You might even be able to set up a crowd-funding campaign if your idea is novel enough, but be careful to sort out any patents and copyrights first.
4. Define your USPs
Your USPs (unique selling points) are what set you apart from the rest. If you’re only offering something bog standard and there are plenty of established competitors out there, you’ll need to figure out a way to stand out. Use your extensive research and testing as a basis from which you can define your USPs.
What can you offer your customers that your competitors can’t? How can you things better? Even if it’s something as simple as slick packaging or superior customer service, it’s worth thinking about. Otherwise, you’ll have to put your hand in your pocket for epic marketing campaigns at the very least.
You can save yourself a lot of time and effort by adding value in a unique way. Your USPs should be visible. Don’t hide them away at the bottom of your ‘about us’ page. They’ll be part of your branding and marketing and should be clear.
5. Get your head around psychology
Customer preferences and spending habits are not the only details you need to analyse. It’s important to get a handle on how the market might change with trends and emerging technologies. Things can change like lightning, and you don’t want to get caught short after the first year or two because you didn’t see something coming.
Your customers are the most important element of the business; that means you need to know them on a deeper level. It’s something you should do ongoing so as not to be caught out. Monitoring analytics, carefully organised segmentation and customer surveys will all help with this. You might need to incentivise customers to participate in quick online surveys, but a simple discount or offer should suffice.
6. Forget scaling… for now
Scaling basically means developing processes that work quickly, cheaply and can be repeated time and time again. Such processes help your business to cope and perform under an exponentially expanding workload. The assumption is that there will soon be millions of customers, so there will be a huge amount of revenue rolling in.
When scaling works, you should be able to at least maintain, and at best increase your business performance and efficiency when it is tested by bigger operational demands. However, it’s not something you should worry about when starting out.
Focusing on scaling when launching a business would be like trying to run before you can walk; it makes more sense to focus on establishing yourself on a local level first, dealing with any issues that arise while they’re still manageable. Right now you should focus on your initial marketing so that you can ensure your product or service is even going to sell in the first place. Once you’re well established on a more local level, you can turn your attention to scaling.
In a nutshell, you must plan carefully, do your research test your model and products, manage your finances, understand your customers and be as unique as possible. It’s doable; you just need to have patience and dedication to being meticulous. That means no corner cutting! Good luck.
Daniel Ross is part of the marketing team at Roubler — a scheduling and payroll software platform founded in Australia. Their mission is to change the way the world manages its workforces.