Many of us long for giving up the nine-to-five and making it on our own. However, the sad reality is that more than half of new businesses fail within the first three years. Some of the biggest stumbling blocks are poor planning, lack of capital and ineffective marketing initiatives. Get in touch with one of our accountants and find out how you can ensure the success of your new business.
Let’s take a closer look at some of the key things you need to consider when setting up a business and consider a few useful tips to help you avoid the various pitfalls.
Is your company viable?
Before starting any new venture, you need to know if the project is viable. You might have thought of a brilliant concept, but if there’s no market for what you’re selling, your company is doomed to fail. Before investing a penny in your new business,you need to do your homework. Here are some important things to consider:
- Know your customers: without a solid customer base, you’re unlikely to get any profit. It’s important to define your target market. Ask yourself who you’re going to be selling to, why they need your product and how you can help them. Understanding your clientele will help you fine-tune your offering, develop an effective marketing strategy, and make important decisions about the direction of your company.
- Check out the competition: if you’re not able to offer something better or cheaper than your competitors, your business may be a non-starter. Think carefully about your unique selling proposition (USP). What makes you different from your competition? What specific benefits can you offer your clients that your competitors cannot?
- Assess the market: before taking the plunge, make sure you know your sector inside out. Study industry trends, buying patterns and growth potential. You can even survey prospective clients to identify any gaps in the market.
Do you have a sound business plan?
Now you’ve done the legwork, it’s time to get your ideas on paper. Putting together a detailed business plan may seem tedious and time-consuming, but sound planning is at the heart of any successful enterprise. Here are some key things to consider when formulating your business plan:
- Focus: a good business plan will help you solidify your ideas and set clearly defined goals and objectives. You’ll be able to identify potential risks, prioritise key tasks and plan for the future.
- Funding: one of the biggest obstacles for any new company is lack of capital. If you want to secure funding for your new venture, you need to demonstrate to potential investors that your business is viable. A sound strategy will help you get the injection of cash you need to kickstart your business.
- Finances: creating a blueprint for your company will give you a clear idea of the financial health of your start-up. You’ll be able to set budgets, plan your expenses and make accurate cash flow projections. If you expect fast growth or fundraising rounds within the first few years of setting up your business, organising a small business audit with a registered accountant is recommended. This will create transparency in your finances and shows good corporate governance. It may help ensure further growth in the future.
Have you got the right systems in place?
For your business to be successful, you need the right systems and procedures in place from the off. Here are some key areas to consider when setting up your company:
- Accountancy: your accounts must be in good order if you want your business to thrive. Getting some expert help and advice will save you time and money, ensure you meet all the necessary regulations, and help you keep more of your hard-earned cash. An accountant can assist growing businesses with auditing, tax services, and payroll services.
- Legal: every industry has its own particular rules and regulations, and failure to comply could result in stiff penalties. Don’t wait for things to go wrong before seeking advice; get the legal stuff sorted at the outset to avoid complications later on.
- Security: with cybercrime on the rise, it’s more important than ever to protect your business from online threats. A data breach could have disastrous effects on your organisation. Protect your digital assets and safeguard your clients’ data with a robust cybersecurity package.
Have you got an effective marketing strategy?
It’s no good having an amazing product if you can’t connect with your target audience. An effective marketing strategy will help you engage prospective clients and reach them with the right message at the right time. Here are some things to consider when putting together your marketing initiatives:
- Optimise your online presence: it’s not enough to simply set up a website and wait for the business to come rolling in. To build your brand, you need to be active online and create value with helpful, informational content. Things like infographics, ‘how-to’ videos and blog articles are a great way to generate awareness, expand your reach and showcase your expertise.
- Engage your audience: most customers are not ready to buy when they first give you their contact details. The trick is keeping your brand top of mind until they are. Drip-feed your prospects relevant, focused content to keep them engaged; include plenty of calls-to-action (CTAs) and tailored discounts to nudge them towards that all-important sale.
Setting up your own company can be an exciting, rewarding endeavour; but in today’s crowded marketplace, you need to tread carefully. With more than one in two new businesses failing in their first three years of trading, you have to be savvy to succeed. If you do your research, plan accordingly, and get the right support systems in place, there’s every chance your new company will flourish. If your business is just starting out, contact us and find out how we can help your business grow and maintain financial compliance.