1. Create a budgeting plan
Before you launch into your business journey, you must clearly determine the revenue model and income you’ll need to generate to cover your costs and how quickly you’ll need to earn it.
Drawing up a budgeting plan will help you focus on ensuring you’ve got all your potential expenditure covered and should include an assessment of the new clients, pricing, unit value and mix of sales needed to be profitable.
Think about the costs of setting up premises, employing your team, external support such as lawyers and accountants, and buying the stocks and materials, hardware and equipment you need to operate.
Having defined your budget, include an extra 10 to 20 per cent for contingencies, to cover expenses such as employing extra people or keeping things ‘ticking over’ if sales are slower than expected. And then stress test the sales to see if the business works at 30% and 60% of the forecast level.
2. Prepare shareholder agreements
Many small enterprises fail to protect their business asset by not putting shareholder agreements in place at the outset.
What happens to the business when shareholders fall out or their aspirations and desires become misaligned, or perhaps one wants to exit and others don’t? If a shareholder dies or becomes seriously ill, do you sell or carry on? When and how should you get the business valued?
These sorts of issues are resolved more easily if a shareholder agreement is in place at the outset to ensure everyone’s clear about what happens next.
It’s best to draw up the agreement at the start when all shareholders are aligned, working together to start the business in a joined-up relationship, rather than later when there may be emotion and tensions between them, often influenced by money and value.
3. Listen to trusted entrepreneurs
When you first start running your own business there are all manner of common pitfalls you might blindly fall into.
But you’re much more likely to avoid them if you can find good, experienced advisers, either paid or unpaid, in the form of trusted entrepreneurs who can share the invaluable lessons they’ve learned.
In the UK we tend to be suspicious of mentoring and coaching and often take a ‘carry on regardless’ attitude. But it’s a good principle for those running any fledgling business to be open to advice and accept they haven’t got all the answers and make that part of the culture.
4. Always aim to deliver client satisfaction
When any business starts it has no track record or established reputation, so any clients and suppliers are essentially taking ‘a bit of a punt’.
Delivering client satisfaction, in terms of both service and product, is vital for establishing your name in your market or the high street.
Going that extra mile to give clients the best possible experience and outcomes is essential. While you may even have to over-deliver and make a little less profit, ultimately, you’re creating advocates for your company who will give you testimonials and referrals.
Developing a solid reputation for good service and first-class experiences is a great way to differentiate yourself and pays dividends long-term.
5. Build your market presence
People need to be aware of your company, the purpose of your business and what your brand stands for.
What do you want people to think when they hear your company’s name? How are you making a real difference to your clients and target market?
Get the message out there by putting together a marketing plan that uses case studies and testimonials to help create your brand image.
Remember, merely delivering your core products or services well is the minimum. Think about how you can add value and provide extra benefits for your customers and retain your integrity. That’s how you’ll differentiate and define your brand.
Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.