Every day, new entrepreneurs dream up ideas for great new products and services, and hope to a start a successful business. But running a business is about so much more than a great idea!
This guide is an overview of what to think about before you start up.
Your qualities
It isn’t usually easy to get a new business off the ground. Entrepreneurs need to be:
- determined – you could struggle for money and support, especially at the beginning
- flexible – you need to be able to change and adapt if things aren’t working the way you expected
- passionate – if you don’t believe in your own idea, you won’t be able to persuade investors or buyers
- organised – there’s a lot to do apart from actually making your products, from accounting to managing staff and keeping on top of your market
- realistic – you need to see things as they are, not as you’d like them to be
- ambitious – of course, you’ll need to set goals and work hard to achieve them
If you know you aren’t strong in one of these areas, you could look into training – or going into partnership with someone with the right skills.
Your idea
Once you’ve come up with your big idea, you need to research, research and research some more. Understanding your target market – in detail – is absolutely vital. Look at:
- who your potential customers are – their age, gender, income and lifestyle
- what they’ll want to buy, and in what quantities
- when they’ll buy
- where they’ll buy – many people will expect to buy online these days
Most crucially, you need a clear picture of why people would buy from you. What do you offer them that they can’t find elsewhere – is it a lower price, greater reliability, a better service or higher quality? This is often called your ‘unique selling proposition’ or USP.
As part of this, you need to analyse your competitors – what they offer, and how it compares to your idea. If no-one else is doing quite what you do, think carefully about why – is it a totally untested idea, or have others tried and failed?
Your pricing
It’s very important to get your pricing right from an early stage. Charge too much and you won’t attract customers – charge too little, and you won’t make enough of a profit to survive.
Most businesses selling products arrive at their price by working out how much it’ll cost them to make it – including all the overheads such as premises and staff costs – and then adding a small mark-up. This is called ‘cost-plus pricing’.
For services, most businesses charge based on how much the service is worth to the customer – this is called ‘perceived value’. For example, plumbers can charge highly for an emergency call-out, even though the cost of the time and materials might be small, because the value to the customer is much greater.
Other issues for start-ups
A guide like this can’t cover all the things you need to consider when you start up. It’s important to get professional advice where you can, to make sure your business has the best chance of success. Introductory guides can be found elsewhere on this site.
You’ll need to look into:
- your business form – sole trader or limited company
- finance
- tax and National Insurance
- business law
- sales and marketing – including online
- dealing with suppliers
- taking on employees
- accounting
- IT and phone solutions
- premises
We wish you the very best of luck.
This article is provided only for general informational and educational purposes. It is not offered as and does not constitute legal or other professional advice on the subject matter in question. You should not act or rely on information contained in this website without first seeking professional advice on the subject matter in question.
