Four actionable tips for starting up a business in 2015
We have put together seven actionable tips for SMEs and people thinking of starting up a new business in 2015.
As the Chinese proverb says: ‘the best time to plant a tree was 20 years ago. The second best time is now.’
With the right business idea, planning, marketing and execution it is never too late to launch a new business.
Identify Your Market
Gathering market research for your sector is vital, but most importantly what you need to establish is if there are enough potential customers that will pay enough for you to successfully turn a profit. Get on the phone, attend networking events and ask questions on forums until you are sure that what you are planning is viable.
Build a list of competitors if there are any, track what they are doing and assess their strengths and weaknesses for your own potential opportunity. Competitors demonstrate that there is a market for what you want to do but you need to do the market research to be sure that there is enough of a market or a niche you can move into that makes starting up viable.
Actionable tip: Speak to and build a list of potential customers and create a demand before you even start.
Digital Marketing Channels
Good marketing can be the difference between selling a million products and selling nothing. Traditional above the line marketing is expensive for any start-up that doesn’t have a large amount of funding behind it. So in 2015 it is vital to be aware of and create a strategy for all the main digital marketing channels that could work for your business.
Digital marketing is a much more effective and affordable way of marketing your start-up. You will need to think about SEO (Search Engine Optimisation), PPC (Pay-Per-Click advertising) and Social Media. It’s also easily scalable and therefore grows affordably with your business. Remember that it can be quite time consuming and to get the best return on investment it is often best to pass it onto a digital marketing agency once you are spending a lot of your time on it.
Actionable tip: Get in contact with a selection of digital marketing companies and ask them what they would recommend, how much business they could drive, and at what rate. Even if you don’t go with them, it will be a useful learning experience.
Accounting
This is something you need to get right from the start or you can get seriously tripped up by HMRC later on. The world of accounting for small business has changed a surprising amount and there are a range of new accounting options in 2015 so that you don’t have to use the traditional route of the accounting firm.
Whether it’s just you or you employ one or more people you’re going to need various tools to manage the business’s finances, your own pay and your employees’ pay. There are a lot of free tools to help you keep on top of things at the beginning but it is often worth paying for a tool that does everything in one place and that is designed around HMRCs accounting rules.
Actionable tip: Whether you go with a traditional accountant, work with one of the new breed of small business online/cloud accounting services, or decide to handle everything yourself, you need to think about your accounting as early as possible and create a structured accounting system.
Funding
The one thing to remember about funding is what risk will it create for you and the business? Grants are always the safest option as they often don’t need to be paid back so the business won’t carry any risk of defaulting on repayments.
Investors or business loans will require that a return on the money invested is paid at some later date. If this money isn’t returned the business might be forced into bankruptcy if a new repayment schedule can’t be agreed. One of the other risks with investors if they don’t want a return on their money is that they will want to own part of the business in the hope it grows and becomes more valuable.
Investing savings or borrowing against personal assets is what many start-up owners end up doing as securing initial investment or business loans can be difficult. This carries a lot of personal risk for the owner as this money might have been set aside for something else or might be borrowed against their house or other assets.
Actionable tip: Plan how much start-up capital you will need and try and reduce your personal risk as much as possible. Forming a company will limit your personal risk to only the money you invest in the business but to reduce this further, try and reduce the amount of money you invest in the business.