The things to consider before starting a business are both varied and many.
It is the sort of topic that can elicit that feeling somewhere between excitement and terror – and you can never tell which it is.
There is no need to feel overwhelmed by the process. It is a matter of taking decisions step by step and making sure all the structures are in place to ensure your success.
Here we take you through some of the essential things to consider before starting your business.
Each issue sounds much simpler than it seems and hopefully, by the end of this article, you will feel empowered to take your business idea and make it work.
What To Consider Before Starting a Business
Make Sure It Is a Good Idea
The problem with a good the idea is that it is unlikely that you are the only one to have had it.
You need to make sure that someone hasn’t already beat you to the marketplace and therefore narrowed your chances of success with your business.
Don’t get this wrong. Competition is not a sign that the business will immediately fail.
However, you need to make sure that the marketplace is big enough for yet another company in this area.
So, an important first step is to research your idea as thoroughly as you can.
- Does the idea already exist?
- Are people who are doing the same thing making money?
- Is there room for another company in this area?
- Is there a good business case for the way you want to go about delivering the idea?
- Do you need to legally protect your idea while you develop the structure of the company that will deliver?
Write a Business Plan
Writing a business plan is not just a necessity for gaining finance. A business plan will force you to inspect the business idea from every angle and will help cement in your mind that you know how you are going to succeed.
Gut instinct is a beautiful thing – and sometimes successful. A thorough analysis of an idea is even better and almost always prosperous in revealing if a business will succeed or not.
The business plan is the blueprint of your company – like the architectural drawings before building a house. It helps you think through everything you need to do, the resources you will needs and the finances that are going to make it happen.
Part of this will be deciding how you are going to structure your business legally. Google limited company versus sole trader to start the process of understanding the legal questions that should be answered in your plan.
For more information, check our article on How To Develop a Business Plan.
You need to decide if you can run the company alone for a while or whether you need to hire employees. It could be that you choose to use freelancers or contractors at the beginning, to avoid employment law and taxation issues.
However, if you do decide to employ staff you then need to determine if you need to hire an HR expert to help you make the most of your team.
You can try to manage the hiring, onboarding, performance and potential dismissal of employees but it is a specialised area, and you may need help.
In short, you need to decide how you can sensibly start out with your business and whether employing too many people too soon could make it too expensive.
If you decide to take care of the hiring process by yourself at the beginning, read our picks of The Best HR Management Software for Small Business.
Understand Your Market
Who is the target market for your service or product?
You need to not only define the demographics of your market but also write user stories for the people you are aiming to make money from.
You should write profiles for the type of people who would be interested in your product and service and then use these “characters” as a starting point for all decisions made.
Get Your Online Presence
There are very few businesses that can succeed without an online presence.
It is likely that you are going to have to design and build a website – maybe even set up to sell your service or products online too. You may think this unnecessary, as you plan to have a brick and mortar store.
However, most consumers now browse online before physically shopping in a store. You could decide to begin by using Facebook and Twitter – creating a group and followers to build online word of mouth about your idea.
However, this comes with some risk – as you are not entirely in control of the user content.
A website will act as a virtual storefront for your business and therefore drive traffic to your shop or offices. You should also create emails with your domain name to give a sense of credibility to your service and products.
Google apps offer emails with domain names, and for a certain number of email accounts, this is a free service.
You will probably need a variety of Social Media Tools, and you can read more about it in our guide to The Best Social Media Management Tools for Businesses.
This must be the scariest aspect of any business. Not only is it about getting money to get your business off the ground but also maximising tax benefits to help you succeed.
The more you know, the better equipped you will be to make this work for you.
You should read and keep on reading about tax law and financing options – it may even be worth seeking advice from an accountant or business advisor to make sure you are fully informed of your options.
Any professional advice you seek can be offset against future tax bills – so although it might seem expensive as a start-up cost, it could pay off in the long run.
Alternatively, you might find that your bank or finance provider offers free business advice when you are starting out with them.
Managing The Launch of Your Business
You need to have at least a basic understanding of marketing. You need to learn how people get their services and products noticed by their target market. There are lots of aspects to this:
Search Engine Optimisation (SEO)
Driving traffic to your website by getting high up in the search listings for your service and product. Few consumers click on the second page of results – and many don’t move beyond third on the list.
You may even want to investigate pay per click advertising with Google or Bing. You might also want to consider website retargeting and email campaigns.
Therefore, you need to research the technology – including packages like MailChimp.
Managing Your Online Presence
Social media is a free resource and one that cannot be ignored. It can be massively time-consuming and ineffective if not maintained well.
Therefore, consider if you need to hire someone with a specialism in making the most of Facebook, Twitter, Instagram and more.
Newspapers and television still have their place, and you may be able to announce your launch with a bit of a flourish – though this is an expensive option.
Ultimately, marketing, like HR, is a specialised area. You might want to consider hiring a contractor or freelancer to help develop this for you.
It is likely that communicating your idea to your target market successfully is going to make your company work, or not.
Don’t Forget To Learn As You Go
You do not need to know everything about your business before you get started.
The more you know, the better prepared you feel, but at some point, you are just going to have to learn as you work.
Business is a fluid environment and things will change, the unexpected with arise and new opportunities will present themselves.
Just know that as you work that you need to be alive to the environment in which you are working and continually learn about your business.
If you consider yourself a student throughout you are unlikely to be taken by surprise – as you will be expecting to find out something new.
Someone, somewhere, has likely designed a software package that will make your life easier.
On a basic level, this might be a communication tool like Slack, a task management app like ToDoist, a CRM to manage your contacts or a project management platform like Basecamp.
Before you get started, investigate what support you can gain from different software options for managing your business.
At the very least you should consider an accountancy software such as Freshbooks or Quickbooks.
The process of starting a business can feel daunting. There are a lot of areas of expertise outside that of just knowing your product or service.
You may be a great personal trainer or writer – but this does not make you an expert in finance, HR, marketing, IT solutions and more.
If you are starting small, then you need to research, research some more and then research even more.
However, at some point, you will have to accept that you cannot know it all and that you are going to have to go for it.
These are the things you should consider before starting a business – it sounds a lot but the more prepared you are, the better your chances of success.
If you want to know about one of the best product management tools, then read our review.