Getting Started With Your Business Idea

Getting started with your new business idea can be daunting, and one of the common questions we get asked is where to start once the initial idea has been formulised.

This is a really good question, and I would always recommend that we start with the customer.

It sounds very obvious when we say it but from the evidence we’ve collected so far for new businesses starting up in this area:

• Only 37% of businesses starting up understand their market size and growth rate.

• Only half of businesses have a clearly defined audience.

• Only 6% felt they had a good enough understanding of their target market.

This is often the first place that I start with new businesses, and often even some businesses that have been trading for a while but not yet got the traction that they deserve for the time and effort the business owner is putting in.

 The challenges of not getting this nailed from the start include poor product-market fit, marketing messages and tactics missing the mark and ineffective use of resources.

Getting these nailed straight away will mean that every bit of time and money you put into your business will have a much greater chance of being effective from the off.

Based on this, my recommendation is to start with really understanding what is going on in your wider market:

• In what stage of its lifecycle is your market? Is it emerging, growing, mature, saturated or declining?

• Then really look at defining your target audience. A key challenge is having lots of potential target audience segments and trying to appeal to them all from the start. A simple exercise you can do is to segment them out and rate them based on much of a pain point does the problem you are solving create for them, and how motivated are they to solve it. Start with the highest scoring segments and pick 2 - 3 maximum.

Customer empathy in business and in marketing is one of the most under-rated tools you can use. Research the facts, then put yourself in your customers shoes. Our first training module also deals with analysing and understanding this.

Assessing Financial Viability

 The second most important thing that many start-up businesses struggle with is checking the financial viability of their business.

92% of new businesses told us that their financial projections were inadequate or non-existent.

There are many reasons why this can be, and we are not all trained accountants, but what we do need to know is whether our businesses are financially viable and profitable over the long term.

A key challenge with not being able to demonstrate this is that it limits our access to funding.

Staffordshire County Council has a brilliant loans scheme whereby startups can secure loans of up to £5k at a 0% interest rate.

Being able to demonstrate your cash flow over the loan period and ability to repay the loan is essential, and that also applies to larger loans offered through organisations such as The British Business Bank.

If you don’t have a solid projections of your numbers over at least the first couple of years – speak to us as we provide free training on this as part of the start-up programme, and we also offer a 1-2-1 with our financial advisor.

Having those numbers prepared will give both you and other people with an interest in your business the confidence to back it.