The secrets to a successful start-up
The latest statistics from Companies House reveal that 644,750 new businesses registered in the 12 months to 31st March 2017, bringing the total number of registered companies in the UK to 3,896,755. That’s an increase of 5.9% on the year before – demonstrating the nation’s entrepreneurial spirit and confidence in the market.
However, it’s a depressing fact that around 20% of these start-ups fail in their first year, with 50% shutting up shop within three years. Failure certainly is a possibility -but if you start your business the savvy way, you’re far more likely to succeed.
Plan to succeed
It’s easy to set up a company in a day – but that doesn’t mean you necessarily should! Before opening for business, you’ll need a solid, strategic plan. This should include:
- Goals – these should be SMART (specific, measurable, attainable, realistic and time-based). Here’s an example of a SMART goal in action – ‘Within a month, I will be selling my products across the UK, via Amazon.com. After six months, I will have built my inventory to six products, with the aim of making ten sales a day. I’ll be relying on reviews and word-of-mouth promotion, plus paid advertising on social media.’
- Capital – how much money you have available, and how you’ll be allocating it.
- Balance sheets / cash flow forecasts – how much money will be coming in and going out.
- Accurate information about your current situation.
Identify what you need, not what you desire
When starting out, it’s easy to be tempted by things you don’t really require. Many start-ups have run into financial problems due to investing in costly technology or excess staff – when actually, it would have been more effective to start off more modestly.
Work out your invoicing system
We live in a culture where late payment is prevalent, and this can be fatal for new companies. A recent study by the Asset Based Finance Association suggested that the average time taken to pay an invoice is now 72 days. There are steps you can take to ensure you maintain a healthy cash flow. Stay on top of your unpaid invoices, don’t be afraid to chase them up if required, and ensure that you’re never in a situation where you’re relying solely on the payment of outstanding invoices.
Get ahead with marketing
Visibility is tantamount if you want to succeed – both online and off. It’s a wise idea to get familiar with as many forms of marketing as you can, including:
- Social media (paid advertising and free marketing)
- Google AdWords
- Email campaigns / newsletters
- Gathering contact details
- How to monitor / assess data
- Flyers and brochures
If you’re not confident in your marketing skills, enrol on a local course, or a free online course (for example – FutureLearn).
Understand the market
Every business has competition. It’s important to get to know your main competitors, and gain understanding about how your company will sit in the market. For example, how much of the ‘pie’ can you realistically hope to take? And are there any ways you can make your business more attractive than your competitor’s company?
Find the perfect premises
Commercial premises can make or break your premises. Leasing an office or work-space is ideal for start-ups, as it’s less financial commitment, with far greater flexibility. When choosing premises, location should be tantamount, but don’t be afraid to think outside the box. For example, if you can’t afford Shoreditch, explore other options a little further out – they’re often far more reasonably priced, and still offer good proximity to Central London.