Many people go into business because they’re passionate about something. For example, they really enjoy cooking, so they open a restaurant. But they often don’t have the background, knowledge, experience or desire to hire, train and manage staff, handle payroll, supplies, finances, marketing, legal requirements and more. There are things you can do before jumping in to start growing a successful startup.
Steps to take before starting your business
- Research the need, market and location for your product or service.
- Study the market to determine competitive, sustainable pricing.
- Take stock of your product knowledge and expertise. Do you need to outsource some of the work or get training for yourself?
- Gauge your business acumen. Will you need to outsource some of that work?
- Check your bank balances. Do you have sufficient start-up money? What about a strong cash reserve for yourself and for the business?
- Find out how you’ll develop leads and market to your target audience. How much will this cost?
- Crunch the staff numbers. Do you know how big a crew you will need, for how many hours and with what areas of expertise? Do you know what constitutes fair pay and benefits and how you will manage your team?
- Prepare an in-depth business plan that includes a step-by-step outline of what needs to be done for your business to succeed.
Taking these steps before starting your business is crucial and will make the ride to success much smoother.
Create a plan
Before jumping into business, you need a comprehensive business plan to pull this information together in a workable format. There are many types of business plans. The one I am talking about here is for your personal use, but it can also be a good starting point if you later need to apply for a business loan or use it for other purposes.
Your plan should cover both short and long-term goals. For the short-term goals (one to three years) complete a detailed outline of exactly what is to be completed, by whom, when and the cost. It is important to be specific and realistic.
For longer-term goals, (four years or more) state your vision for the future. What is success to you? What does the business need to “look like” for you to feel great about the progress you have made over that period?
Keep in mind that you need an appropriate level of personal cash reserve for yourself before you begin. It can take a while for the business to produce income.
Competition is fierce, technology is ever-changing and money is tight. To run a financially healthy business, you may need to continually upgrade equipment and technology to stay ahead of the competition and be the “company of choice”. That makes it crucial for you to always maintain a healthy business cash reserve.
Your business plan should include:
- Company mission statement
- Detailed goals for the next three years
- Projections for each of the three years
- Products and services you offer and their pricing
- Gross business income
- Total expenses
- Net profit
- Amount of business cash reserves you will start with and maintain
- Physical location of the business, if any
- Equipment and maintenance
- Technology needed
- Inventory needed
- Systems and strategies you will use in your business to keep it running effectively and efficiently. Some examples may include electronic client management, billing and inventory management systems and other business-related systems.
- Budget, legal requirements, staffing, marketing, social media, website, licenses and training, and all other areas needed to run your business.
There are business plan outlines online that you can download and use. The right plan outline can ensure you don’t miss any important information and save you a lot of time since you don’t have to start from scratch.
I learned early on that getting in front of one client at a time would not build the business fast enough. It was imperative that I get in front of a lot of people quickly, but I had little money to spend on marketing. I needed to “think outside the box” and find low-cost ways to get the public to know me and what I could do for them.
Here is a strategy I employed in the past that worked really well. I reviewed the clubs and organizations’ card files of all the local libraries. This file provides a wealth of information, including the date, time and location of meetings, the organization’s purpose, who to contact and all contact information. I looked for organizations that were a good match for my business and my areas of expertise. Twice a year, I sent each organization a letter by traditional mail offering as a free public service for me to speak at their meeting or event.
Also enclosed was my bio and a one-page overview with bullet points outlining topics I was qualified to speak on that were appropriate for their members. That got me in front of a lot more people at very little cost to my business and gave me public speaking experience. It also enabled the public to know me and what I could do for them, so when they needed my products or services, they’d call me.
Having a three-part strategy by utilizing emails, newsletters and traditional mail may provide the best results.
What I wish someone had told me when starting my business
I wish someone had told me to think more about “the big picture” and the future of my business instead of focusing on how to get by day-to-day. In many businesses, there is a lag time between when you first see a customer and when the check actually comes in. Income can be erratic. If you’re focused on today, next week or next month, you may find it difficult to build your business to its true potential.
Put time in your schedule every week to do nothing but work on the business and not just in it. A good rule of thumb is to spend 20 percent of your work hours on the business. If you allow nothing to distract you during this allocated time, you can be successful more quickly than you thought possible.
Keeping cost in line with profitability
I used to feel that every client deserved the same level of service regardless of the amount of income they provided to my business. That was until there weren’t enough hours in the day to do that. To provide the same level of service to all my clients, I had to either spend more time at work and less with my family or hire more staff. That would mean less income for my family. I wasn’t willing to choose either of these options.
The level of service you provide and the amount of time and money you spend should coincide with the profit you realize.
It’s normally more cost-effective to keep existing clients than it is to obtain new ones. I advise small business owners to code their customers in their client management systems based on profitability to their business. The people providing the greatest income to the business deserve the best service. Going above and beyond for them can help you retain your best customers.
Examples to implement
For example, you may send your best clients a hand-written note to thank them for their business or a centerpiece for their dinner table during the holidays. It’s also good to call them to check-in and see how they are doing or find out if there is anything you can help them with.
The next group of clients might receive a hand-written note to thank them for their business and a semi-annual call to check in, see how they are doing and if they have any questions.
This is just an example. Of course, you will need to decide what is appropriate for the type of business you have.
The correct level of customer service for every client can be one key to the success of your business and provide the balance you need to manage your time and resources more efficiently.
Things to keep in mind while growing a startup
If you always consider how to make your company stand out above the rest, you can make your business unique so it will be noticeable and memorable.
You must have a written plan for the running of your business and follow it, making adjustments along the way.
By putting the right systems in place from the start and managing them well, you can build the successful business you are striving for.
About the author
Nancy D. Butler built her business as a single parent with no other income and $2,000 to her name to $200 million in assets under management, before selling it. For the last 14 years, she is an international speaker, award-winning author and for 2018, 2019 and 2020 a delegate to The United Nations for The Commission on the Status of Women. She has coached businesses to provide better service to their clients while increasing their bottom line by an average of 300 percent. Butler has over 35 years of business experience.