Whilst any business needs to adapt and change as time moves on and circumstances change, it is imperative that firm foundations are laid to support the business when it starts and to give it a firm platform for growth in the future. So what steps need to betaken by any early stage startup to build those firm foundations?
Many businesses are born because the founder has identified a gap in the market based on their own personal experience, but once you think that you have decided on the idea it is then crucial to test that your idea is viable. You will need to do solid desk based research to ascertain the size of the potential market and identify any existing competitors. You will then need to conduct proof of concept by speaking with potential customers, understand the demographics of your target buyer, ideally conducting focus groups, perhaps producing drawings or prototypes depending on what product or service you aim to provide. But be careful not to give too much information away too early as others might steal your idea and get to market before you do. Crucially, what is unique about your idea or product and why do you think that it will succeed? If you cannot answer the last point then the reality is that your business does not have a bright future.
Whilst there are a number of ways to start a business, the vast majority of people decide to set up a limited company. This can be done by asking someone such as an accountant to do this for you but it is actually very quick, cheap, and easy to do online – literally taking 20 minutes and a credit card – so many founders do this themselves. This should be done before any real activity starts as it helps to keep the accounts simpler.
Opening a bank account with a legacy bank can now be a slow and painful process to go through the Know Your Customer and Anti Money Laundering procedures and will certainly entail a visit to a branch. Alternatively you can consider the much easier and quicker alternative of opening an account with one of the challenger banks but remember that most do not offer the full service that traditional banks do.
Please, please, please write a business plan as this is the only real way to work through all of the steps that you must consider before launching your business. You can start with a business model canvass and then develop this into a full business plan. In the business plan you need to write about the market; the competition; barriers to entry; what your product or service is and why it is different; the management team and what experience they have; financial projections and the detailed and defendable assumptions behind these; details of manufacturing, supply chain, and routes to market; marketing and sales strategy; and anything else that helps you to understand everything that you need to. There is a separate article on the Startups Magazine website that I have written dedicated just to Business Plans.
When starting a new business it is so much easier to establish all the systems and procedures from day one rather than having to try and do this at some point in the future when the business has grown and become more complicated. The right systems and procedures not only enable you and your business to be as efficient as possible,but they can also help to protect your business from crime, fraud, and cyber security threats. These systems and procedures would include computer systems, a CRM, a sales pipeline, and of course a website and social media presence. Make sure that they are as integrated as possible.
So much in life comes down to connecting what you know with who you know, and then working with the right partners to maximise both. Whatever your product or service, you need to surround yourself with the right people to ensure that your business grows and prospers. Not only does this mean finding the right business partners to start to build your business, but it also means finding the best people to advise you and work with you. These external partners may be mentors or you may ask some of them to be on the Advisory Board – both of these can help advise you and guide the business going forward but they can also make your journey much easier and add credibility to your business, especially if you want to raise funding in the future.
Every businesses is different but they do have one very crucial thing in common, and that is the need to make sales. Without sales there is no cash flow and no profit and without those no business will last very long. How you market your product or service will again vary but the best way of doing this will have become apparent either from your previous experience or from your research and other work undertaken when preparing the business plan.
There is of course much more to running a successful business than that, but if you get these important first steps in place you will soon be up and running and on the way to seeing your business grow and prosper.
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