How to begin a business venturePosted on: July 8, 2022
Starting a new venture has seemingly never been easier in a world dominated by ecommerce and online services. LinkedIn is filled with posts offering tips and guides from entrepreneurs and founders about running a successful business while sites like Kickstarter can help ventures get off the ground with the help of crowdfunding. But what are the realities of starting a business?
Running your own business and being self-employed demands a particular mindset that is self-motivated, driven, and not deterred by rejections. Many businesses fail in their first year and most successful entrepreneurs have left a trail in their wake of ideas that didn’t work. In short, you can only really learn by doing and one of the only things you can be sure of is that there will be a lot of learning on the way whether you fail or succeed.
What are the steps to starting a new business venture?
A step-by-step guide to starting a new business venture may outline all the practicalities but only you know if you have the grit to take an idea to market and grow a business. Going it alone is tough, so surround yourself with supportive peers who are business owners and join business networks that nurture entrepreneurship. Organisations like The Federation of Small Businesses can offer valuable support while entering competitions such as The Pitch can help you understand if you’ve got what it takes.
The steps below represent just some of the aspects to consider before you embark upon writing your business strategy and establishing your new venture.
Start with an idea
What is your vision? Can you define it succinctly by explaining what it is and why people need it in just a couple of sentences? Perhaps you’ve always had an idea you wanted to try out or you’ve spotted a gap in the market? Maybe your idea is for a niche clientele? Whatever your idea is, make sure that it is sound. Of course, your vision is unique so others may not see the benefits of what you’re proposing until it becomes a reality but test out your idea so that you know it has legs. If you can prototype the product or service, trial the functionality and get feedback to build upon.
Know your market
Part of testing out your idea is knowing your market. You cannot be everything to everyone and you shouldn’t try to be. Know who your target audience is and the profile of your ideal customer. From demographic to lifestyle, be specific about who will buy your product or service and why. Be sure to let lenders or angel investors know of the experience you have within the sector of the market you hope to corner. Do your market research and present it in digestible infographics that will make for a persuasive presentation.
What is your business model?
Different businesses follow different business models, from direct to customer (D2C) subscriptions to freemium, where you offer some content or part of a service for free and incentivise users to pay for increased access or functionality. Whatever your business structure, there will be a model which will offer you a template and guidance on how to make it work optimally.
Identify the competition
Just as you need to know your market, you need to know your competition inside out. Who are your top three competitors and why? What aspects of their success can you replicate and how would you better them? Carry out a competitive analysis to help you identify opportunities and the limitations within your market. Be clear on your unique selling point (USP) and how you differentiate. Think about whether you need to patent your idea or perhaps set up your own manufacturer.
Make a hiring plan
You may start off your business from your home office but how are you going to scale and who are you going to need to help you? The “people” element of your business needs as much attention as all the other elements. Understand the gaps in your own knowledge and who you would need to help fill that and contribute to the company’s success. How are your hiring skills? Do you need to hire an HR professional? Even if you’re a long way off recruiting and looking at leases for office space, sketch out the skillsets you need and the team you would like the company to grow into.
Draw up a marketing plan
Marketing initiatives will take up much of your time and business spend because marketing is how you reach your customer base and secure sales. You may work primarily on social media or if you offer a specialist service or product, you may rely heavily on word of mouth and referrals. Either way, it’s good to fully understand how to reach your target market and you’ll probably need professional support on this. Search engine optimisation (SEO) plays such an integral part in customers finding online businesses that you’ll certainly need to build this into a marketing plan.
Prepare your financial plan
Now that you’re clear on who you might hire and how you’ll get the message out, you probably have a good idea of how much you’re going to need to spend. Your idea may be funded by venture capital or you may need to apply for a small business loan or a credit card. Most important is to estimate how soon you will be able to pay off your initial spend. How many sales do you need per month to break even? Financial projections such as these will help you write up your business plan and are the figures that venture capitalists and providers of finance look for.
Decide on a business name
A good name is pivotal to the success of your brand. It needs to be memorable, ownable, and searchable, so make sure that it hasn’t been taken by someone else (even if they’re in a different sector). Also important is to ensure that it doesn’t mean something else in another language. Your name will also influence your branding so think about what it will look like on packaging and how it might produce a logo that is visually pleasing.
Create a website and find stockists
Whether your website provides a digital shopfront or simply offers potential customers a way to contact you, you’ll need to think about domain names and site design. Even if you opt to have national and international stockists, it’s always best to have a digital home for the brand. During the early stages of a business, a website that gives you digital presence is important even if it doesn’t yet have full functionality.
Register as a business
You’ll need to decide whether you start off by registering as a limited company or if you could manage as a sole trader to begin with. Sole proprietorship is definitely an option, but if you hope to grow bigger and faster, it’s best to get through the paperwork of incorporation, naming yourself as director, and registering for VAT if you need to. The business legal structure of sole proprietorship also means that you are personally responsible for any debt or legal action taken against your company, which can be problematic. Any business insurance plan you choose should include professional indemnity insurance and limited liability insurance. You’ll also need to set up a business account.
Gaining a specialist MBA for entrepreneurs is the first step to success
Whatever the type of business you want to grow, having an MBA Entrepreneurship can help you fast-track your plans – from understanding how start-ups continue to grow through funding rounds, to grasping how cash flow is fundamental to a business functioning.
Register your interest in the 100% online MBA Entrepreneurship from the University of Wolverhampton today and start on the path to making your venture a reality.