The silly season is around the corner and while recovery from the global financial crisis is, well, not exactly in full swing… we thought it was time to deck the halls and address the vital question of what it takes to start a new business.
Much like the larger-than-life gift-wielding icon from the North Pole, many people question whether or not starting a new business on the back end of recession is a good idea … or the figment of over-excited entrepreneurial imagination?
Well in some ways it’s a better time and easier than it ever has been. The competition has been winnowed out, and many businesses are quieter and less obtrusive in their marketing. New technology options including the internet, e-marketing and outsourced suppliers offering SaaS (software as a service) make it possible for you to do a lot without raiding the bank.
Our ‘12 Days For A Start-Up’ lists core criteria for a business startup, and if you can satisfy them, there may well be a surprise under your tree come December.
Follow your passion. The effort and energy required to run the business will only be worth it to you if you love what you’ve chosen to do.
Research your market space and your competitors thoroughly. Be an expert on your industry, products and services, if you’re not already. Join related industry or professional associations before you start your business.
Test, retest and test again assumptions of why your target market will buy.
Get yourself a support system. Don’t do it alone. A friend or family member is helpful for sounding off when things are tough. Better still find a business advisor or mentor. One who can help you through the process and warn you of the pitfalls.
Write a business plan. Understanding your business and its goals will help you make the right strategic decisions. Lenders are more likely to lend when they can see a robust plan. It will also mitigate the likelihood that your time and money disappears into starting a business that will NOT succeed.
If you can, get clients or customers first. Do the networking. Make the contacts. Sell or even give away your products or services. You can’t start marketing too soon.
Line up the money. Lenders will want to see sturdy business plans, contingency fall- backs, evidence of likely success. Raise as much capital as you can. This is pretty tough in a credit crunch, but as anyone who has been through a building project knows, the budget always blows out. One option to consider is maintaining a part time or contract job while you start your business. This will give you the funds to live on while you get the business on its feet.
Get the legal and tax issues right. It’s much more difficult and expensive to unsnarl a mess afterwards. Get your accountant / business advisor involved closely on this. Make sure you learn what your legal and tax responsibilities are before you start your business and operate accordingly.
Be patient. It will take time. Estimate your planned time without financial returns - and double it.
Get professional help. You’re not an expert at everything. Hire the expertise you need – accounting, bookkeeping, legal and so on. Don’t waste time and money on jobs you’re not qualified to do.
Be professional. Get your business stationery lined up, business phone numbers and a dedicated email address. People like to do business with professionals, so make sure your small business seems as organized, courteous and efficient as any larger established organization.
Prepare to cope with unexpected changes. Be flexible about redirecting your strategy.
Have a happy and safe holiday season and in the coming year keep a look out for your business silver lining.