Category: Starting Up

Many entrepreneurs go into business with a good idea, pursuing a passion. But often they may overlook some key business needs, and then encounter avoidable pitfalls. Along with your great idea, there needs to be a clear idea of how the business will succeed.

It’s important when considering starting (or buying) a business, to ask these FIVE KEY questions, and understand why you need to ask them:

1. Have you done the research required to achieve success?

Whether starting or buying a business, you must do your homework. I always put customer development at the top of my “research” list. If you don’t have customers, you don’t have a business! In other words will your idea fill an unmet need in the marketplace or solve a pain point for your customer?

Next, understand who your competitors are, and what you can do better than they do. But don’t let this de-focus you from customer development!

After gathering this information, you can create your strategic plan, with a clear vision of how to meet your business goals, and begin to focus on things related to everyday running of the business, and dealing with sales and customers.

As part of your initial research consider putting together a team of trusted advisors, including an attorney, an accountant, a banker and a financial advisor. Always take advantage of available resources when launching your business.

2. How much time will running this business take?

We all underestimate the amount of time and energy it takes to launch a new business! Changes in the economy have led to many people deciding to start their own business; but launching a new business is not an endeavor to jump into lightly. The time needed to research, plan, market and operate a business may be much more than you expect.

And of course there’s the cold, hard fact that only half of all new businesses survive five years or more, and about one-third survive 10 years or more, according to the U.S. Small Business Administration. That’s a wake up call to separate the truly determined from the rest…!

It’s important to know how much time you have available to invest in your small business to make it successful. Make sure to allow time to strategize, market, and sell your product or service, not just focus on running the business.

3. When will I make a profit?

Most small businesses do not turn a profit immediately, especially start-ups; you need to make sure there are enough reserves on hand to cover expenses (read: live on). Every business is different, so there’s no general rule about when a business may become profitable. Some small businesses don’t make a profit for years, though they may be covering operating expenses. You should have enough working capital on hand to cover payroll, operations and other unplanned expenses for at least a year.

4. How should the product be priced so it’s competitive?

One mistake many entrepreneurs make is pricing their product or service based on their perceived value of the commodity, rather than based on what the market will bear. Remember customer development in step 1? Determine ahead of time whether your potential customers are willing to pay for your product or service, at a price which allows you to make a profit!

Winning the price war is not always better – make sure the business can generate sufficient profit margins to cover everything you need….

5. Can I afford to start my business?

Starting (or buying) any business often requires a large initial investment, so it’s important to ensure that your current and future finances are in order. How much can you invest? How can financing be raised if necessary? Also, look at how much savings or additional income you have available to live on while getting the business off the ground. And lastly, ask yourself how much money you can afford to lose, if this whole thing goes belly-up?

Research the startup costs for the business and develop a realistic plan to ensure that the needed funds are available. Maybe you should keep your day job a bit longer?

Summary:  When launching a new venture, go forward with your eyes wide open. Be sure to explore all of the resources available, and seek help from experienced advisors and peers to help you navigate your course. Building a successful business starts with asking the right questions.

The stakes are high for owning a small business; but growing your own idea into a profitable company can be extremely rewarding, especially if you have done your research and planned well ahead, and thus avoid the usual start-up pitfalls. Work smart! Because you already know you will be working hard!

As part of a wider coalition drive, Chancellor George Osborne’s Autumn Statement delivered several breaks and benefits for small business owners. Led by the decision to cap business rates at 2% for the forthcoming financial year, there were a number of initiatives designed to empower small business owners and reduce operational costs. While this may well tip the balance for aspiring entrepreneurs and encourage them to establish a business, however, there are numerous legal and compliancy issues that they must first address.

Launching your Start-up Venture Responsibly and Efficiently

While the exact nature of these issues will depend on your business, there are a particularly high number that revolve around employment law, health and safety and tax compliance. With these in mind, consider the following steps for launching your business responsibly and effectively: –

Ensure that your Business is classed in the Correct Tax Bracket

Not all businesses are created equal, either in terms of their resources or company structure. Initially, you will need to decide on a legal framework that suits your business model, and specifically one that ensures compliance with tax regulations and government laws. To begin with, determine you projected turn-over for your first year, as this will inform you whether or not you are eligible to pay VAT (the current threshold is a turnover of £65,000 a year or more). This will also help you to settle on a legal framework, whether you establish a limited company or set-up as a sole trader.

Respect Construction and Health and Safety Laws

If the construction of a site or workplace is part of your start-up plan, you will be required to comply with national health and safety laws as a matter of course. Without this, you may fall foul of a compensation claim or compliancy issue that could cost your business thousands of pounds before it has properly launched. To negate this, ensure that your construction site is equipped with easily identifiable warning signs, which distinguishes hard-hat areas, chemical hazards and potential electrical wiring risks. Suppliers such as Signarama Signs     produce an array of similar notices, enabling your business to remain compliant and safe at all times.

Avoid Employing Staff until you have a Suitable Infrastructure

One of the big mistakes that UK start-ups make is attempting to run before they can walk, especially when it comes to implementing growth plans and employing staff. Taking on a team of employees requires significant financial resources and a suitable infrastructure, as you must provide a complaint and safe workplace and a host of benefits aside from their bottom line remuneration. Failure to appreciate this could cause numerous issues and even law-suits in some instances, so think carefully and commit to developing your venture in a considered and organic manner.

Article Contributed by Lionel Luigi Lopez

There are a number of inspirations that typically drive people into becoming entrepreneurs. While some simply want to use their business to exploit their creativity and skills, there are those who want to secure their future by making such an investment. Then there are the ones who are apparently born to become business owners. No matter what the reasons are, setting up a business can be awfully exciting especially when one starts thinking about the positive feedback from consumers and, of course, the money it’s going to bring.

But sometimes, entrepreneurs can be a little too overexcited that they overlook some of the most crucial measures when starting business, one of which is research. They suppose that as long as they have sufficient funds and a great product, it will be easy for them to hit it big. On the other hand, sensible entrepreneurs realize the value of conducting proper research before even beginning to think of the more complicated aspects of the business. This is because they know that the more data they have, the better they will be able to construct a business plan that is not only efficient but also one that has realistic objectives. Facts and figures can also help entrepreneurs manage their expectations once the course of the business starts rolling.

Whether you’re a budding entrepreneur or you’re looking forward to start yet another business, you sure don’t want to take chances especially when you know that you can get reliable information. Without further ado, here are three areas you need to study first before opening up shop. 

Market Research

Any level-headed business owner knows how valuable it is to identify their target audience and so should you. Since it is the customers who will be the one to patronize your merchandise, you must ensure that information relevant to them is integrated in the development of product ideas. When you’re able to tailor your product or service to the needs and wants of your target customers, it is easier to establish a connection. This is where a market research, also known as consumer research, comes in.

Among the goals of a market research is to determine the demographic you want to deal business with. The data that can be included in this category are age group, gender, religion, ethnicity, and economic status. Apart from this hard data, you also need to learn the pertinent intangible information such as their preferences, buying behavior, and what influences them to buy or decline an offer.

Consumer research is usually done through surveys where questions are asked during a personal or a phone interview. Marketers also have the option of sending the questionnaire through mail or stage an online poll. You can also make use of market research tools if you wish to be involved more in the data gathering process. 

Industry Research

Another category essential to your research work is the industry analysis. It is important that you are aware the products or services similar to yours that already exist in the market. Keep in mind that unless your merchandise is original in every imaginable aspect, it is highly likely that there are business that are already selling what you’re about to offer.

But don’t let this discourage you. Originality is not the only yardstick used to measure a business success. This is also one reason why you need to research about the industry you will be in. This particular set of data will help you visualize how you’ll fit in the industry and what approaches are effective in making the trade flourish or fail. When you conduct an industry research, emphasize on details such as its size and how it is segmented among different markets. You should also look into statistics such as how prices influence the growth of the businesses and the industry itself.

The Internet can be a handy tool if you’re not sure where to begin your industry research. You can look up the key players in the industry and check their websites, which usually have relevant data about the trade. You can also participate in related events so that you can be more informed as well as establish connections to what your industry considers authorities.

Competitor Analysis

As they say, you have to know your enemy before you enlist in the battle. So before you proceed to finally set up your business, you need to know the enterprises you’ll be up against with. As such you need to know the playing field very well from a competitor’s point of view.

When you know who your competition is, you’ll be able to force yourself to push your creativity so that you can have a fresh approach to greet your customers. It may be true that originality isn’t the be-all and end-all of business but you also have to remember that customers are always looking for better alternatives to the products or services that have been availing. By learning about what your competitors precisely offer and what people think of their merchandise, you can make necessary adjustments to make yours set apart.

To be fair, you don’t have to treat your competitors in the business as arch-nemesis. If for anything, you can learn a lot from their successes and mistakes; this is information that you can use to boost your own business. 

There is Power in Knowledge

It’s being a cliché doesn’t make it any less true—that when you have the information and data you need, you have the leverage of designing a business structure that could work. Sure, research takes a lot of time and hard work but if done properly, it can be the key to your business’ prosperity. If push comes to shove, you’ll have something reliable to go back to assuming that the research you did is unbiased. At the end of the day, you still don’t lose your advantage.

About the Author

Lionel Luigi Lopez is a business writer, entrepreneur and a musician. He runs a small business in Manila and still active in music. Follow him on twitter @lionelluigi

Setting up a business isn’t as glamorous as some may believe. Yes, it’s exciting, but also frightening at the same time.

There is a massive tendency amongst start-ups to want to start as soon as possible. However, it’s imperative that you prepare properly in order to avoid mistakes that could cost you an arm and a leg. Seeing a problem and correcting it in the early stages is better and cheaper than doing so when your business is already up and running.

The steps below will help you ensure that you lay down the proper groundwork before starting your business – and that you take the right steps forward.

1. Test your business idea

People are constantly coming up with business ideas, and it can be quite a challenge deciding which business ideas are good and which are not.

Therefore, talk to as many individuals as you can about your idea. Don’t limit it to just ordinary people; talk to business experts. Speak to those that have chosen the same path as you, so that your situation is relatable.

When listening to these respected people, it will be in your best interest to not debate with them too much, but rather listen to their advice. Absorb as much as you can in order for you to draw up your own conclusions.

2. Check all legal requirements

No matter which country you choose to live in, governments will always impose certain regulations and tax compliance issues on small businesses.

As an entrepreneur, it’s your responsibility to find out what the requirements are. You need to determine the most appropriate way in which to handle it – depending on your business’s company structure, revenue and tax implications.

3. Do your market research

As obvious as this step is, you need to pay close attention to it, and place a great amount of your focus on it.

Market research is of paramount importance. There are three major aspects to consider and concentrate on: your target audience, market size and competitors.

Research the history of your specific market and find out as much as you can about it. For instance, have there been companies that have attempted your business idea in the past? Have they failed at it? This could be a warning sign and one should investigate this so that you do not make the same mistake.

4. Study your target audience

Over and above doing market research, studying your target audience is vital and therefore a separate task to your ordinary market research. As the business owner, you need to have a clear understanding of your target market and know exactly who they are and what they expect.

By studying your target audience in this way, you will be able to determine what prices please them, what they need, and why. And by understanding this, you will be able to create and develop products and services that will satisfy them.

Marketing your business to your respective target consumers will therefore be easier; you will have a better understanding of how to reach out to them.

5.  Build a great team

Building a business by yourself is difficult and you will require support. You will need support with regards to marketing and promotion, creating the product or service, and if you have a big task at hand, you may need some extra support in other areas of the business as well.

In order to achieve the best results, team members must be dedicated, hardworking, honest and experienced.  They must be willing to put in the extra time and they should all be in sync with each other in order to work together successfully and efficiently.

6. Understand the money-making process

You need to understand the amount of work and transactions needed in order for your business to reach its financial goals. This is key. If you go into business with flawed expectations, you might find yourself in a sticky situation.

Understand your finances from the beginning and make yourself aware of all the nitty-gritty. Doing this will cost you less time and money in the long run should you have misjudged something from the beginning. It will also lead you to change your strategy – something you do not want to be doing at a late stage of your business.

7. Have fun

Before planning and going ahead with everything, make sure that your business is something you want to continue doing for a long time – because if your business idea is successful, you will be doing it for a long time.

Make sure that it gives you the enjoyment to persevere through difficult times. The more passionate you are, the stronger you will be as an entrepreneur and the more successful you and your business will become.

About the Author

This article was provided by Sable Group. The Sable Group manages financial, immigration and legal needs. To find out more about the services Sable Group offers, please visit the website at www.sable-group.com

When it comes to new business startups in tech industry, there are some assumptions that owners tend to make. Technology businesses are delicate ecosystems that should be driven with a focus on the stakeholders. The connection of the product with the target market should be stressed enough in order to stay away from some clichéd assumptions.

One of the assumptions that tech entrepreneurs tend to make is that if I build it, they will come. Any idea that pops into your mind may not necessarily translate into the next best thing in tech business. This can be understood in regards with the app business. The media and web projects make it seem like it’s quite easy for anyone to make money developing an app.

However, the reality is quite different. You may able to come up with a code that translates into an app and expect it to go viral as soon as you place it in the app market. Unfortunately, this isn’t the way it works.

Technology based business require genuine inspiration that can translate from even the most basic of ideas. Integration is also important with regards to product development. You don’t need to invent something, at times improvement itself is an innovation.

One of the simplest examples in this regard can be that of internet conferencing and how it has been used as an integrated model in a number of processes. This can be seen in the case of project management solutions and other tech based services that provide such communication options.

Another assumption that’s made is that people would understand your idea when they see it. Instagram is a good example of how to avoid such a case. There were a number of apps for sharing photos before Instagram, but they couldn’t excel. But how did Instagram? Filters my friend!

Instagram focused on simplification and feature access not present in other apps. What mattered was that Instagram was able to check in the user’s natural instinct and employed to their benefit. So, it’s important that you don’t underestimate the reluctance of people to learn new things.

The concept of functionality is important, but even more important is that of a minimum viable product. An assumption is that adding more features to a product would attract the user’s attention. No, it doesn’t always and it can actually scare them away. You should instead focus on the minimal set of features that are effective. At times, the overabundance of functionality causes confusion in the mind of the user.

Success in technology based businesses relies on how the entrepreneur focuses more on the response of the people instead of their own pride. Many businesses don’t take off or shut down after a few years because the owner’s enthusiasm is overwhelming.

When you’re pitching the idea, instead of focusing on its ‘awesomeness’, rely on the audience’s response more. At times, you would realize that your idea while seeming great to you, isn’t what the general masses need.

To cap it, don’t rely on the assumption that you can make anything go viral. The ecosystem of technology businesses defines the viral nature as more of a chance than a technique. So it’s not a wise strategy to think that your business can succeed because your product would go viral. A number of cat videos go viral, but some other videos with similar ideas didn’t.

Rely on the concept, not on the chance.

Article contributed by Jenna Smith