Starting a new business? Time to get your ducks in row
Things to consider when starting a new business
I used to work with a South African colleague who had a no-nonsense view of start-up businesses that came to us for help.
“They’ve got a great idea,” he would assert, before adding the damning conclusion. “But they haven’t got their ducks in a row.”
There was no shortage of those firms. From wedding planners and firework display companies to public sector consultants and waste disposal specialists, all had one thing in common – there was at least one gaping hole in their business plans.
I was reflecting on this the other day when I met with a business owner who was fizzing with ideas. He already ran several successful enterprises, and was telling me enthusiastically about a new one he was trying to launch.
I hated to be the killjoy, but as I learned more and more about his new business, I had to point out that I felt:
- He hadn’t properly identified his target audience
- He hadn’t thought through his USPs (Unique Selling Points)
- It was hard for customers to understand what they would get from his service
- There were key components of the service that were missing, particularly for smartphone users
- The company branding had a very local look and feel, but he was hoping for UK-wide custom.
And that was just to start with. I couldn’t in good faith offer to help him because didn’t see much prospect of the business succeeding until the audience, the offer and the brand were right.
I am sure this particular business owner will return to the drawing board and bring his idea back to market. And I hope I can help him do that. But, to help others avoid making the same mistakes, I thought I’d share my thoughts on the ducks you need to line up before you launch a new enterprise.
Duck 1: Who is your audience?
You know there is a need for your product or service, but where is that need coming from? Unless you have a clear idea of your target customers, you could easily end up throwing good money after bad as you market to the wrong people.
This is why marketing agencies like to create typical ‘personas’ before they devise a campaign. For example, middle managers in their 30s and 40s will have very different needs and interests to board-level executives. If you want to sell to either (or both) audiences, you need to know in detail what problems they want to solve, what benefits they are looking for in a product or service like yours, who they need to convince before they buy and so on.
If you can’t afford to do market research – and few start-ups can – at least think about your offer from the point of view of your target audience(s). How will it help them? What features and benefits will appeal to them? What makes it stand out from the competition? In this way, you can pitch the right information to the right people from the outset.
Duck 2: Be launch-ready
It’s perfectly normal to launch a product or service with the intention of improving or refining it as the income starts to come in.
On the other hand, it’s not a good idea to launch something that’s unfinished with the plan of finishing when you’ve got some more money.
Let’s take an example. Assume you want to launch an online store specialising in technology. You won’t get very far if you launch a website that isn’t optimised for mobile – your audience will almost certainly expect it, if not a dedicated app on their smartphone. Go to market with a half-finished web presence and your customers will simply use competitors who offer the functionality they demand.
Similarly, if you are offering a service that people sign up to online, remember that people insist on immediacy. It’s no good just having someone in an office responding to enquiries after a few hours or days. The moment someone signs up online, they should have an automated email in their inbox giving them something of use and value, or showing them what to do next.
Duck 3: Get hold of enough money
I’ve seen too many businesses launch without the resources they need. This means that they cut corners, whether by not hiring enough people, skimping on marketing or failing to properly develop their product or service.
Given that many people start businesses with their savings, it makes sense to wait until you have adequate resources to launch your business properly – you will have a much greater chance of success. If you go to market without adequate money you stand a good chance of seeing your cash disappear without any return.
Duck 4: Get advice before you start
This is so important. It’s easy to have a great business idea, build up lots of enthusiasm and rush into launching your new enterprise. But you stand much more chance of success if you can bounce your ideas off people who are impartial, and who have a lot of experience in business start-ups.
That’s one of the things that THP’s accountants are very good at. They’ll share your enthusiasm, but they’re not afraid to suggest alternative ideas or highlight pitfalls you may encounter. After all, if we nurture our clients in ways that lead to their success, they stay with us and recommend us to other. You could say it’s our way of getting our ducks in a row!
If you have a business idea you’d like to run past one of our experienced accountants, get in touch with a member of our staff at one of our offices in Cheam, Chelmsford, London City, Saffron Walden and Wanstead.