Being a small business owner myself I understand some of the key challenges people face when trying to launch a successful venture.
Going through these tips on starting your own small business will give you a much better chance of success moving forward. It’s not a how to guide or anything but I think these tips are enough to give you some good ideas and guidance in getting started.
Tip #1- Decide What You Want To Achieve
One of the most important things you can do to get started in a small business venture is to work out exactly what you are trying to achieve from the get go.
Some people suggest writing a 50 page business plan or seek the counsel of a business coach. That’s all good and well but plans change and coaching is expensive if you’re on a budget.
If you’re just starting out don’t let ‘paralysis by analysis’ keep you from pursuing your entrepreneurial goals.
Keep it simple but know what your main business goal is, your vision I suppose you could call it. Having a forward vision on where you want to be is important if you want to actually achieve something worthwhile.
For example you might want to start a massage business. You may start out by going to people’s homes or work places and offering a mobile service, but as you build your client base and your profits your goal may be to open a massage and wellness clinic. Having an overall vision of where you want the business to be heading allows you to plan your efforts to achieve that vision.
If you don’t do this you could find yourself drifting along and never scaling your efforts or profits to any real degree. You don’t need to know everything or plan for everything, just work out your main vision and write it down.
Once you have that vision you could break that down into smaller chunks:
- Your 3-5 year outlook
- What you want to achieve in the first year of operation
- Monthly, weekly and daily tasks to achieve that first year goal
The point here is to make sure you at least have some kind of outline for where your business is going and break that down into smaller, more manageable tasks to achieve your overall vision and goals.
Tip #2- Understand Your Target Audience
Understanding the core profile of your target audience is extremely important to any business. So what do I mean by core profile exactly? Well there’s a lot of different ways you can segment a group of consumers but the most obvious one is the ‘benefits sought’ segmentation. What is the main benefit they are getting or the main problem you are solving for them?
For example, if you wanted to start a hairdressing salon the ‘benefits sought’ by your target audience would be ‘getting a hair cut’. If you had a coffee shop it’s probably going to be ‘getting a cup of coffee’. This is probably the most obvious way to profile your target audience but you can really dig into this further though. For example people may come to YOUR coffee shop because they get the benefit of a cheap coffee, a quick coffee or maybe the best tasting coffee in town.
Here’s a few other ways you can segment your target audience:
- Demographics- age, sex, marital status, income level, education etc. to get a measurable profile on your ideal customers
- AIO- Learn about the attitudes, interests and opinions of your target audience to better understand what makes them tick
- Lifestyle- What kind of lifestyle do your audience live and what impact might that have on their purchasing decisions?
Don’t stress if some of this sounds complicated. The truth is there’s tons of ways to learn more about your ideal customer but the important thing is to do your homework and try and profile them as best as you can before launching your business.
Knowing who your ideal customer is will help you to craft a better product or service and deliver much more targeted value, meaning a more profitable business.
Tip #3- Define Clearly The Unique Value You Are Offering
One good way to get an idea of what you offer better than your competitors is to actually research your competitors. Sounds simple right? It is.
Make a list of the top 10 businesses you think will be your main competitors and work out their strengths and weaknesses. Every business has good points and not so good points, find out what they are. Look at their website, their pricing, their products and services and anything else you can find.
Another way is to find out what the people that use these products and services are saying. What did they like and what didn’t they like? Learning these things can help you to develop an idea on what YOU might be able to do that could be a strength or a unique value offering over your competitors.
Tip #4- The Concept Of Marketing
A lot of people seem to think marketing is just sales or advertising. That simply isn’t true.
In essence marketing revolves around the concept of value. Creating, communicating and delivering value for customers and clients in return for value of some kind. Sounds a little cryptic I know. The point is that marketing really takes on a range of tasks to ensure this value is delivered in a targeted and strategic way and in a way that benefits everyone involved.
The ‘marketing mix’ is about 4 main elements all designed to work in harmony to achieve your core objective. There are more elements but for this article I’m just going to stick with the basics.
Here’s the 4 P’s of marketing mix:
Product- This is the actual product or service itself and takes into account the needs and wants of your target audience when creating or refining it.
Price- Pricing has an impact on how potential customer perceive your offering. Price it low and people may assume it is ‘cheap and nasty’ but price it too high and you may struggle to get customers in the door. How you price a product has a bearing on how people perceive it.
Promotion- This is the advertising and overall promotion side of marketing your product or service.
Placement- Where will you sell your product or service? Will you sell it through retailers or directly and what kind of image will that portray?
To put this into context, you might invest a lot of time and money into coming up with an awesome product (product) that you know your target audience will love. You’ve priced this product fairly high (pricing) because you know that people will pay for it. That’s great! But if you the go and try and sell it (placement) through a line of discount stores this will hurt the perceived value of your brand and product.
Another example is if chose to promote a product on day time Television (promotion) when your target audience is young people under 25. That channel of promotion is probably a bad idea in comparison to social media advertising or YouTube and won’t work to achieve your core objectives.
Consider carefully each of the 4 P’s and create a plan that works for your product or service and achieves the goals you have in place. You don’t need to be an expert to see good results, just having a general idea of these concepts can help you establish and maintain a much better business.
Tip #5- The Importance Of Managing Money
This is something that can be difficult to sit down and do at the end of a hard day but making sure you have a good and simple system in place to manage your costs and revenue is very important. The better you can get at bookkeeping (not accounting) the easier it will be come tax time.
There’s nothing worse than having a shoebox full of receipts and a messy set of records. Don’t do it. Stay organised and develop a system that works for you.
Personally I use QuickBooks, it works great for me. There’s a ton of programs out there but I think using a simple system that makes this as easy as possible is key to getting the job done and minimising the time you spend on this essential, but not always fun, task.
Tip #6- Feedback & Adapting To Change
If there’s one thing I’ve noticed that really separates successful business owners to the not so successful it’s a willingness to LISTEN to their customers and value constructive feedback. You wouldn’t believe the amount of businesses that fail every day just by being too proud.
For example a restaurant may do a lot of things right but there’s a couple of really rude staff members and one or two dishes that almost no one really likes. If you are too proud to listen to feedback (or don’t ask for it) then you may keep those staff and continue serving those dishes. Some time down the road you notice some bad feedback being left online and less and less people coming as a result. That snowball effect can lead to very poor sales and higher than average advertising costs to ramp up new business. Those things combined can lead to the end of your restaurant or at best a poor performing one.
How did all of this start?
By not listening to what your customers where saying and adapting your business to suite. It may even be that times change and what once worked no longer works as well as it used to. Being stubborn and proud can be easy when you are that attached to your business, I understand this. But the smart thing to do is to give things an honest evaluation, see what your customers are thinking and adapt with the times.
Feedback is absolutely essential for any successful business. It’s no wonder companies invest a LOT of time money into finding out what their customers are thinking every year. It doesn’t have to cost much though, even a simple survey or asking in person can gauge what your customers are thinking.
Tip #7- Build A Basic Website
In this day and age, if you don’t have a website you are missing out on a lot of business. Having a good web presence allows you to gain credibility with your customers and drive new sales every day.
Once upon a time this was no easy task to do yourself but with technology getting better and better, it’s very possible for almost anyone to design and build a professional looking website in a relatively short amount of time.
The alternative is paying a web designer thousands of dollars and most small business owners don’t want to fork out that kind of money to get rolling.
The bottom line is that having a website will drive more business and give you a much more professional image for your business.
Building a small business can be tough but it’s also really exciting. Do your homework and work out what you are really trying to achieve.
By having a core focus and doing your due diligence, a lot of other things will fall into place as you go along.