Starting a small business can be exciting and nerve-wracking at the same time. CPA Linda McGowan shares with us what you need to consider in order to give your business a solid foundation.
When starting out in business there are a few critical things you need to consider. Here are some questions you should ask yourself and some useful tips to get things off to a good start.
What are you selling?
– What exactly is the service or product that you are about to sell?
– Do you have all the skills and experience necessary to sell this product?
– Do you have a unique selling proposition?
– Have you created a new product or are you entering into a growing market?
– Why would anybody buy this from you?
– Do you need to consider local council restrictions and by-laws or other legal impediments?
– Are you legally allowed to sell this product?
– Do you need to patent or trademark your processes or brand?
Who are you going to sell it to?
Before you spend one dollar on marketing, have a clear idea of who you are selling your product or service to. Draw a mental picture of your ideal customer and decide what characteristics are relevant to them. Ask yourself: how old are they, what do they like, where do they live, how do they buy your product now? If you have more than one type of ideal customer, draw a picture for each type of customer. Never lose sight of your ideal customer as every decision you make is about selling to them.
Why are you selling this product or service?
Businesses are started for lots of reasons. Be clear in your mind as to why you are going into business. Don’t give up your day job until you have proven that you can generate enough sales to sustain the business and you. Remember that nothing ever happens in the time frame you think it will. The lead time for a business to go from zero to regular, sustainable sales differs for all businesses. Unless you have sufficient working capital to sustain the business for an indefinite period, test the market first. This is especially critical when you are relying on the skills of another, for instance, opening a restaurant and you are not a chef.
How are you going to sell your product?
A website is essential. Keep it simple and relevant to your ideal customer. Focus on telling your ideal customer all about your product. Be as helpful as you can about it. Share with them how to use it, why it works and how it helps them. Answer the typical questions you think your ideal customer would ask. Remembering who your ideal customers are, focus on how they get their information. Not all social media works for all age groups so how does your target market prefer to get their information?
What is your brand?
Your logo is part of your brand, as is the consistency with which it is applied across all media, stationery, advertising and promotion. Don’t forget that the essence of a brand is you. It reflects your values, your dream for this product and your way of delivering it to customers.
Document your answers to these questions and you are well on your way to preparing a business plan.
For more detailed advice about business structure, exit strategies, bookkeeping software options and insurances, seek professional advice that is tailored for your personal situation.
Linda McGowan is a Certified Practicing Accountant. You can find her here.
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