Lack of planning
“ If we knew what it was we were doing , it would not be called research , would it ?” An Albert Einstein quote that should become your startup journey mantra . You need courage and a thick skin to start a business as well as a resilient attitude towards constructive criticism , so share your idea with friends and colleagues that you trust will be truthful with their take on what you ’ re planning . The internet and social media are hugely effective tools when it comes to determining trends and garnering opinions too , but don ’ t underestimate the impact and importance of field research . Speak to your potential customers directly and test your idea through surveying , focus groups and face-to-face interviews .
It ’ s amazing how many startups falter because they simply don ’ t place enough emphasis on planning : key areas like sales , development , staffing and funding aren ’ t afterthoughts and should be part of your business plan right from the beginning . Sounds weird , but you also need to plan for the things you can ’ t plan for ; attempting to prepare for every eventuality that the world may throw at you is tough , but you need to know what your plan B is if events take an unexpected turn , even if plan B is pretty vague .
Finding the right structure and the right people
Sole trader , limited company , LLP or partnership ? There ’ s a fair few ways to structure your new business depending on how the decisions you make down the line will affect its growth . If you ’ re not planning on employing anyone except you then you ’ re likely best off as a sole trader , but that does mean that any business debt will be met from your personal wealth if the business fails . A partnership is great if you ’ re going into business with someone you know well and is common when sole traders wish to expand , but liability will affect all partners and can lead to messy
‘ break-ups ’. Registering a limited company at Companies House gives your business instant credibility and makes it easier to separate your money from the company ’ s money , but you ’ ll need to be really on top of your admin . And , limited liability partnership ( LLP ) models are effectively a hybrid between limited companies and partnerships , which allows for flexibility , but does not give the same tax advantages . Research every option extensively and seek advice about which is best for you .
Equally important is the synergy of your team , which should be comprised of people with complementary capabilities and an identical focus to your own . As time passes , you might realise that you ’ ve hired the wrong people – this is easily identifiable as glaring cracks will show once the startup expands , but is a pain in the neck to put right as firing and rehiring will always hold up progress . Lay out your hiring strategy clearly and carefully as part of your business plan so that each key hire works in harmony with the goals you ’ re trying to achieve ; also , be humble , swallow your pride and switch things up if you think you have the right people but in the wrong roles .
Competition
The corporate world is a fierce one and competition is inevitable for a startup that , in the first year at least , will be doing its best just to tread water . That said , it ’ s the ability to strategise , and at best thrive , in a competitive environment that will keep you on your toes ; punch above your weight with confidence ( but never arrogance ) and you ’ ll gain recognition and respect among your peers and the thousands of new and expanding businesses that you ’ re pitting your business wits against .
The marketplace is crowded and constantly growing , so you won ’ t be the new kid on the block for long , but new rivals can move the goalposts overnight . Always be mindful of how you stack up against the
competition from a potential customer ’ s point of view , so you can identify what makes your company culture different , your brand individual and your products special , but be equally careful not to define yourself solely in relation to your competitors because it ’ s essential that you have faith in what you ’ re bringing to the table .
Attracting customers and winning their trust
Marketing your vision from its very inception is never a bad idea – testing the waters at the idea stage is a great way to finetune who your potential market is , connect with them and listen to feedback . It ’ s getting the word out that can be tricky . There are two types of major marketing channel : active , or outbound , and passive , which is also known as inbound . Inbound marketing , such as blog posts , provides customers with important information about your field of business , but it can take a bit of time to attract traffic and convert that traffic into results . Outbound marketing includes paid marketing channels , such as Facebook advertising , and is particularly useful when it comes to reaching your potential customer base , and therefore growing your business quicker , when you ’ re sure of their needs .
Every startup should set aside time and money to invest in in both inbound and outbound marketing channels and the best way to identify what ’ ll work for you is to take a look at the competition and research what works for them . Talk to their customers and find out what factors made them sign on the dotted line ; when it comes to research , a ) you can ’ t do enough and b ) startup success is absolutely about the sum of its parts .
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