10 Things To Consider Before Starting a Business
So, you’ve decided 2023 is the year you’re finally going to turn that business idea you’ve had for a while into a reality. Great! But before you rush in, know that starting a small business takes a lot of preparation. We’ve collated 10 key considerations that will put you on the best path to success.
10 things to consider before starting a business
1. Know the market
Business is all about supply and demand. As passionate as you may be about your project, it’s only going to succeed out in the big wide world if there is legitimate demand for it. Some things you should be considering:
- The current size of the market you’ll be entering
- The potential for growth
- Where the gaps are that you can develop your business idea to meet
Which leads us nicely into point number 2…
2. Know your competition
The digitization of business means competition has never been fiercer – whatever you’re selling. Your potential customers can compare you to several competitors with a few clicks. So, best to be aware of what you’re up against, right?
Firstly, jump online and search for terms related to your business idea. Look at the top results: what are the businesses offering? What do they have that you don’t, and vice versa? What price points are they offering their products/services at? If you can’t offer something better or cheaper, you may have to rethink your idea.
Secondly, conducting a thorough competitor analysis is crucial. It will allow you to identify gaps in the market where customer demand is not being met – demand you can pivot your business to meet. You’ll also learn best practices to market and sell more effectively; and uncover market trends that can influence your growth strategy moving forward.
Our free competitor analysis tool will help you get a lead on your competition!
3. Know your audience
Arguably one of the most important parts of any business: truly knowing your customer. Their motivations, behaviors and needs should inform every part of your business growth strategy, from pricing to marketing.
Build a profile of your target customer’s age, gender, income and profession (of course, depending on your business, you may have several profiles.) Here are some tips to get you started:
- Write a list of key questions to answer when completing a customer profile. For example, why would a customer be attracted to your business? What challenges are you able to solve for them?
- Carry out some market research – post surveys on social media and invite feedback. You could even go a step further and conduct interviews with potential prospects.
- Browse your competitors’ social media feeds – who are their followers and what conversations are they having in the comments section?
Once your business launches, you can turn to CRM software and analytics data to track your customers’ behavior and add more detail to your customer profiles, such as when they are online most – which will help you increase engagement and ensure your marketing messages are reaching the right people, at the right time.
4. Build your brand
Creating a brand is about influencing how your customers view your business. It starts with the name you choose through to your marketing comms. Think about:
- What is your business’s purpose?
- What is its USP?
- What sets it apart from competitors? Value? Design? Innovation?
- Which features of your business will your target customers be drawn to most?
Once you have these answers nailed down, you can begin to construct a brand tone of voice and design that will best communicate them to customers.
5. Create a business plan
Next up, the bit that will make everything seem real: writing a business plan. It should include objectives, strategies, goals and projected results for your business and is the best way to stay on track as you grow. It is crucial if you are planning to secure capital from a bank or investors, and will also be important when approaching new hires and potential brand partners.
Done correctly, you will also quickly identify any weaknesses in your business, and where you will need help or upskilling. Our ultimate guide to designing a business plan will ensure you cover all the essentials and can move forward with the most confidence in your idea.
Your business is only going to be a success if people know about it! Within your business plan should be an outline of your marketing strategy. Some avenues to consider include:
- Social media. For start-ups with a limited marketing budget, SM platforms provide a free way to talk about their brand, build a following and engage with prospects.
- Email marketing. There’s still life in this channel! Create a monthly newsletter with relevant news and offers from your brand – you can entice people to subscribe with discounts. Just don’t overdo it – bombarding people with too many emails is a quick way to lose their custom.
- Brand partnerships. Carefully selected partnerships with larger, established brands will help your business get seen by the right customers. Brainstorm complementary brands you could approach for a mutually beneficial campaign.
- Thought leadership. This is a way to demonstrate your authenticity within an industry. By sharing your expertise on a subject, you can prove your business is one to be trusted. Discover how to become a thought leader, here.
7. Consider the risks
We don’t want to be negative, but it’s an inescapable fact that new businesses face many challenges. In fact, around 20% of start-ups go bust in the first year, whilst 50% don’t make it pass the five-year mark1.
But there are things you can do to minimize the risks. As the saying goes: by failing to prepare you are preparing to fail. At the start of each week, make a list of tasks to be completed, and use your business plan as a touchpoint to ensure you stay aligned with your objectives.
Finding yourself a mentor is a great tactic, too. A successful businessperson who can be on hand to guide you, give advice and insights is invaluable.
8. Keep costs under control
Speaking of risks, one of the leading reasons businesses fail is because they run out of money2. To keep cash flowing, remember the key points:
- Draw up a budget and stick to it. Prioritize outgoings – suppliers should always be paid on time.
- Keep setup costs to a minimum. A flashy office may be appealing but until your business is generating a good profit, your spare bedroom will have to do.
- Shop around suppliers. With a little negotiation, you’ll be able to find the best deals, especially if vendors know you are talking to competitors.
- Minimize time wasting. Time is money! Automating processes where possible will save your business lots of money.
- Use freelancers. It may be a while before you can afford to hire permanent staff; in the meantime, make the most of the flexibility of freelancers.
Even the hardest working, most passionate entrepreneurs can’t do everything themselves. It’s how mistakes are made. Know what your strengths and weaknesses in business are, and outsource the latter to experts. There are also countless software and technology options to automate many of your processes – do your research and delegate.
10. Remember legalities
The less exciting side of starting a business – but important. A brief snapshot of just some of the things you’ll need to consider are:
- Registering your business
- Obtaining insurance
- Patenting ideas where necessary
- Complying with customer data protection laws
- Checking employees’ right to work
- Health and safety
Of course, rules and regulations vary by country so do your research and be thorough.
After launch comes growth. A business growth strategy will help your small business realize its big ambitions. From product diversification to expanding your sales channels, check out our 7 tips to take your business to the next level.
Remember the final mile! As a logistics leader, DHL Express has extensive experience helping start-ups move goods and deliver to customers on time. Speak to us today about how we can help you keep your customer promises.
1 - Lending Tree, May 2022
2 - DC Incubator, November 2019