5 essential to-dos when starting a business

We’ve all seen entrepreneurs suffer on Dragons’ Den when it becomes apparent their business is solving a problem that no one has. 

Before you do anything, you need to take a step back. 

Whatever your business, whether you sell products or services, you need to consider these key questions:

• What problem do you solve?
• Who has the problem?
• How do you solve it better than anyone else?

Being able to define and communicate this clearly will be the difference between finding and getting customers or not.

Once you’ve done this, go even deeper and think specifically about the target market for your product or service. You should do this even if you think everyone could be a customer of ‘your thing’.

Why?

Most startups will only have a limited marketing budget. Effective marketing only happens when you understand and target a clearly defined audience. 

As the saying goes “when you market to everyone, you reach no one.”

Spending a day creating a profile of your ideal customer(s) will really pay off once you start investing in your marketing.

To do this:

• you’ll want to consider the demographics of your ideal customer such as age, gender, and location
• you’ll also want to consider the character and interests of your ideal customer – these are called psychographics. 

Let’s use an example from our blog. Bettie Confetti runs an online greetings card business. Here’s an example of what one of her ideal customers might look like.

You may then find you have a number of types of ideal customer. You can categorise these and look at how you shape your product or service offering for each customer.

Let’s call this profile category: Metropolitan Millennial Male

Once you have these profile categories, you’ll also have a firm idea of what are the most effective marketing channels and strategies to reach them. Now you know what problem you solve and who you solve it for.  

With your customer profiles sorted you can start to work out exactly which of your services/products will solve that customers’ problem.

You can do that by creating a list of clearly defined list of services or products with simple prices.

A good idea is to write a dummy proposal for each of your customer profiles outlining the options and pricing structure. The process of writing it out in this way helps you to see how you’re communicating your offerings. Also, outlining the resources, time and costs involved will help you decide on a price that is profitable and you’re happy with. Remember, pricing is a delicate balancing act. It’s easy to fall into the trap of undervaluing or overvaluing your service/product, so take some time to make sure you’re setting the right prices. 

In terms of your offering, if you’re just starting out, it’s recommended that you focus on 1-3 key services or products, to begin with. You can always add more later, but if you’ve too much choice it can confuse your customer and a confused customer won’t buy.

The key is to keep your offerings and pricing really simple for yourself, and your customer.

Now you’re ready to make it official and start taking customers, it’s time to register your business.

If you’re based in the UK, you can register with HMRC as a sole trader, limited company or a business partnership. Here’s a quick overview of the key differences. 

Although we’ve got guidance on choosing a legal structure for your business, you may want to discuss the options with an accountant who can advise on the best structure for your individual circumstances.

Once you’re registered you can start trading.

No matter which legal business structure you choose, purchasing business insurance will protect you, any employees and your customers should anything unexpected happen. It’s vital that you secure this before you start selling your products and services. Not only is it peace of mind that so many new small business owner’s overlook, it may also be a legal requirement.

There are three main types of insurance to consider, but talk to a lawyer or seek advice before taking out a policy:

• Public Liability Insurance – protects you against claims for compensation from people outside your business who have suffered an injury or whose property has been damaged because of your business.
• Employers Liability Insurance– a legal requirement if you employ anyone through your business. Protects you against the cost of compensation claims arising from employee illness or injury, sustained as a result of their work for you.
• Professional Indemnity Insurance – protects you if your client suffers a financial loss through your work for them.

The final essential to-do when starting a business is to get in front of your potential customers as quickly as possible. Marketing is vital if you want people to know your business exists and pull in customers.

If you’ve done your research in step one, you’ll have a clear idea of who your customer is and how to reach them – through advertising, social media, networking or partnerships.

Whilst there’s so many ways you can market to your potential customers, when you’re starting out pick the opportunities that will get you in front of the most people quickly and easily. For many businesses, this is by attending local networking groups or partnering up with other existing businesses who have a captive audience and your products or services compliment. Here are 15 ways to find your first paying clients. 

By doing this, you’ll know very quickly whether your business is viable or not.