Many small business owners regret not having everything in place when they launched. Don’t make the same mistake – create solid foundations for your new venture…
A recent survey from Direct Line for Business found that more than 1 in 5 (21%) small business owners would this time spend longer getting the foundations right if they were to start another new business.
Making sure your company has solid foundations is hugely important and could affect the success and direction it takes in the future.
Here are 6 steps to building a solid base on which to stand your business…
1. Know your aims
Many people start a new business because it’s what they want to do. But beyond just wanting to do it, you need to have a few professional aims. Ask yourself…
• Will it support me financially?
• Where do I want it to be in 5 years?
• How fast do I want it to grow?
By knowing where you want to be and what you need to get from it, you can better plan your new venture.
2. Research, research, research
The next step is to make sure you know everything you need to know about not only the new business, but also the market in which it will operate.
You need to know what kind of competition you’re facing, whether you’re aiming at the high-end of the market or entry point, what sort of profits and prices other firms are reporting, the success rate of similar firms and what it is about your business that will attract customers away from your rivals.
This final point is important – if you’re entering a market with a number of similar businesses, you’ve got to ask why a customer will change from someone they’re familiar with to a new business?
3. Have a solid business plan
Use this research to create a solid business plan. What kind of model will your firm follow, do the predicted figures add up, are the growth predictions realistic, do you have a back-up plan?
Money is, obviously, a big part of this. Where you’re getting your investment from plays a big part in the business plan as repayments on loans or profit shares for angel investors will affect your figures.
4. Cross your T’s
To make your foundations solid and your business plan water tight, you’ve got to make sure all your contracts are legal and above board. And that you’ve covered every area of your business that needs to be covered.
Make sure you know all the ins and outs of every contract you’re going to sign, from big suppliers to your mobile phone contract. If you don’t know every point you could find yourself in trouble down the line.
This means not using off-the-shelf contracts but instead creating your own. It may seem like a lot of work and expense to start with, but it’ll mean you’re protected in the future.
This is also hugely important for protecting your intellectual property, which covers everything from designs and literary works to inventions and designs. If these aren’t trademarked or copyrighted, then someone could come in and steal your idea.
5. Seek advice
You can’t do it all by yourself – and if you do, you risk missing something vital or signing something that doesn’t get you the best deal.
Talk with lawyers, tax specialists and accountants to make sure everything is above board and adds up. Even your bank can offer advice on things like cash flow and paying back loans. Seek recommendations from friends and colleagues on which advisors to use.
6. Only launch when ready
Finally, don’t launch your business if you haven’t done at least all of the above. Some people who have a good idea rush it to market simply out of excitement, or because they’re worried someone will beat them to the punch.
But if you’re not ready to go, launching too soon can be a serious problem as you’ll soon see your cash flow dry up.
A soft launch is also a good idea to iron out any running issues – but even at this point, you should have already built a solid foundation for your business.