Starting a new business is an exhilarating and often frightening experience, and often, new and aspiring owners will like to rush headfirst into the waters. These 7 tips are designed to make the leap less nerve-wracking and more stable for the first 12 months and beyond:
1. Clarify the vision behind the business.
All businesses address needs of customers, and they must fill certain niches in the market. Owners should know the kind of product that the business must sell and how that will address these needs and niches. Having confidence in the products or services that the company will sell helps with defining brand identity and facilitate the development of channels to sell those products and services to the target markets. Marketing also benefits greatly from a well-defined product, as a product sure of its own place can be sold to customers easier than a product which is vague and unclear.
2. Survey and analyze the competition thoroughly.
Having a well-defined product also helps differentiate it from potential or active competitors in the market that it will be sold in. Determining competitive advantage is key to attracting customers in the short and long term, and a product with a substantial competitive advantage naturally leads to greater sales and thus more profit. Marketing can only do so much to create hype and buzz for a product but knowing how it stands out compared to competitors will ensure customer retention and loyalty in the long run. This loyalty then becomes the basis for continuous profit and a positive public image.
3. Have a clear hierarchy and delegation of tasks.
Of course, businesses cannot survive on the strengths of their products alone. Without a solid structure and hierarchy in place, tasks would never be accomplished, and the business will stall. Delegation of tasks will not only ensure that the to-do list gets completed, but it will also prevent employees from overstepping their boundaries and potentially compromising the efficiency of the entire company. This doesn’t mean that employees are necessarily restricted to one role, as that can also lead to inefficiency due to overspecialization but outlining what staff members can and can’t do will make managing day-to-day operations smoother.
4. Conduct a thorough feasibility study.
These three tips should ideally come together in a well-researched feasibility study. Surveying the market, canvassing costs and logistical demands, and accurately assessing the viability of the product that the company will sell is a major step that has to be undertaken before the elbow grease of production begins. An accurate, well-researched, and balanced feasibility study will help with the next tip.
5. Secure the right investors.
Investors help establish and maintain the business as much as the owner and staff do. Without their funding and support, a new company may run itself into the ground without a lack of stability. It is important to look for investors who not only have the most funds to shell out, but also believe wholeheartedly in the company and its vision. A highly-detailed and well-researched feasibility study can alleviate investor fears of trusting in a company without any plan or direction and getting investors to believe in the product will turn their support from hesitant to genuine.
6. Keep detailed, accessible, and organized records.
Bookkeeping is vital to ensuring that all company transactions keep running, but it only makes one part of the record-keeping process. Companies face the need to organize their records into clear, accessible sections. For example, using effective contract software system can keep all pertinent contracts filed up properly, and maintaining a detailed and easy-to-understand filing system will save employees the hassle of having to pull up pertinent documents when necessary. Backing up all company records in multiple sources lessens the setbacks caused by technical or logistical issues with the record keeping.
7. Be prepared to take risks in the first year and mitigate potential losses from them.
Risk and reward go hand in hand in any business venture, but the first months of a business are often the most critical ones. The first months will determine the future and survivability of the venture, and risks will have to be undertaken to secure the strongest foothold possible. That naturally comes with the potential for massive losses, so saving and protecting company assets are ways to decrease the impact those losses might have. Getting the most suitable insurance policies, looking for alternative ways of generating funds, and managing costs effectively can do wonders for a fledgling business’ stability.
With these 7 tips, the first year of business will be fruitful and hopefully lead to long-term growth. Good luck!