Growing Pains
Make sure your start-up business avoids these common mistakes
CREATIVE COMMONS
Welcome to the world of run-your-own business. Exciting isn’t it? But before you get too caught up in dreams of dominating an industry, it’s worth looking at the common issues that will make or break a start-up business. For instance, did you know that according to research 56% of people say they won’t use a company again if they experience bad service?
According to the Department of Labour’s Small Business Association in the US, more than half a billion new businesses are set up every year. And an almost equal amount of them are shut down. I have found that the situation is not much better in Pakistan and the potential for failure of your start-up is all too likely.
1. Have a solid business plan
“Those who don’t plan, they plan to fail”. Make this your mantra. A stellar business plan can provide a road map for your start-up business and encourage investors to commit to your project. This plan also helps one to communicate with potential partners, vendors, employees and customers.
Make sure to include the following:
• Mission Statement
• Summary
• Information on the product or service you’re offering
• Target audience
• Marketing strategies
• Competitor and market analysis
• Financials (funding available and funding required)
2. Testing. Testing. Testing
You may think your product is brilliant, but test out your product or service with real customers, and make changes if necessary. Then, test it again.
3. Identify your customer
Everyone’s a potential customer, right? But if your product or service is for a particular group (such as anti-aging skincare for elderly women), you need to make sure your branding, marketing messages, campaigns and website content cater to that niche.
4. Be realistic about funding
A solid business plan will help you estimate how much cash you will need to get the business going (and be sure to include contingency plans for surprises and set-backs). Explore different sources of business finance, from bank loans to government-backed schemes.
5. Work out which legal structure is right
Sole proprietor, partnership, limited liability company, or limited liability partnership? Different structures have different tax consequences. You could be missing out on tax breaks if you don’t have the right structure.
6. Team Building
Hunt for the best talent. Hire smart, passionate and intelligent people who share the same vision and then get out of their way.
So, what could break your business?
1. Bad service
According to one report by Walker Information, by 2020, customer experience will overtake price and product as the key brand differentiator.
• Remember — every time you carry out a service or sell something, you are marketing yourself and your business; so, the best marketing tool is excellent service.
2. Underestimating the need for marketing
No matter how fantastic your service or life-changing your product, if people don’t know about it, it won’t sell.
• Did you know that according to consumer research, people are targeted with some 5,000 marketing messages on a daily basis? How do you stand out? Think about your product and your target audience and offer them something that shouts, “I’m the solution to your issues.”
• Even if you get most customers through word-of-mouth, the people who hear about you will look you up online. They’ll look at your website, and they’ll search on social media pages. You need to be found in multiple places
3. Not having the right insurance in place
A corporate or an LLC offers you protection against being held personally liable for actions by your employees or others. Insurance is available for many risks — the risk that your market won’t materialise, your customer base isn’t looking for the products you sell and so on. Ensure that you are covered.
4. Missing your story
What lead to the creation of your product? People like personal stories. Make sure to share yours.
Ahmad heads up Pakistani.pk a local startup project. He tweets @ThisIzSparta
Published in The Express Tribune, Sunday Magazine, August 16th, 2015.
According to the Department of Labour’s Small Business Association in the US, more than half a billion new businesses are set up every year. And an almost equal amount of them are shut down. I have found that the situation is not much better in Pakistan and the potential for failure of your start-up is all too likely.
1. Have a solid business plan
“Those who don’t plan, they plan to fail”. Make this your mantra. A stellar business plan can provide a road map for your start-up business and encourage investors to commit to your project. This plan also helps one to communicate with potential partners, vendors, employees and customers.
Make sure to include the following:
• Mission Statement
• Summary
• Information on the product or service you’re offering
• Target audience
• Marketing strategies
• Competitor and market analysis
• Financials (funding available and funding required)
2. Testing. Testing. Testing
You may think your product is brilliant, but test out your product or service with real customers, and make changes if necessary. Then, test it again.
3. Identify your customer
Everyone’s a potential customer, right? But if your product or service is for a particular group (such as anti-aging skincare for elderly women), you need to make sure your branding, marketing messages, campaigns and website content cater to that niche.
4. Be realistic about funding
A solid business plan will help you estimate how much cash you will need to get the business going (and be sure to include contingency plans for surprises and set-backs). Explore different sources of business finance, from bank loans to government-backed schemes.
5. Work out which legal structure is right
Sole proprietor, partnership, limited liability company, or limited liability partnership? Different structures have different tax consequences. You could be missing out on tax breaks if you don’t have the right structure.
6. Team Building
Hunt for the best talent. Hire smart, passionate and intelligent people who share the same vision and then get out of their way.
So, what could break your business?
1. Bad service
According to one report by Walker Information, by 2020, customer experience will overtake price and product as the key brand differentiator.
• Remember — every time you carry out a service or sell something, you are marketing yourself and your business; so, the best marketing tool is excellent service.
2. Underestimating the need for marketing
No matter how fantastic your service or life-changing your product, if people don’t know about it, it won’t sell.
• Did you know that according to consumer research, people are targeted with some 5,000 marketing messages on a daily basis? How do you stand out? Think about your product and your target audience and offer them something that shouts, “I’m the solution to your issues.”
• Even if you get most customers through word-of-mouth, the people who hear about you will look you up online. They’ll look at your website, and they’ll search on social media pages. You need to be found in multiple places
3. Not having the right insurance in place
A corporate or an LLC offers you protection against being held personally liable for actions by your employees or others. Insurance is available for many risks — the risk that your market won’t materialise, your customer base isn’t looking for the products you sell and so on. Ensure that you are covered.
4. Missing your story
What lead to the creation of your product? People like personal stories. Make sure to share yours.
Ahmad heads up Pakistani.pk a local startup project. He tweets @ThisIzSparta
Published in The Express Tribune, Sunday Magazine, August 16th, 2015.