May 28, 2014, by Malvika Johal
My Guide to starting your own business -Part 11 Starting Up
Written by: R L (Bob) Hall (BSc, PhD; University of Nottingham) Owner and MD of Top and Jeffries Limited; Co – owner & Chairman of Fuel Additive Science Technologies Limited, Shropshire, UK
There is no doubt the power of a strong brand to create additional margin and profits across a broad cross section of products and services. As a start-up business, you are a new unknown entity and need to start to develop your brand. Professional brand developers are excellent but prohibitively expensive for a start-up business. However, judicious choices of company name, product names, website design and trademarks can be delivered at relatively low costs.
You will have to advertise your products and services at some point. The problem I have found with advertising is that you know you are wasting half your money, but the trick is figuring out which half! There are many advertising offers out there, but few offer good value for money. My advice is to focus on the publications a broad base of your customers read regularly. If there are not any or you cannot afford it yet try sending simple 1 page simple leaflets direct. I have found both email marketing and social media a complete waste of time, but maybe I have not found the keys to success.
Trade shows can be good to kick start your entry into a particular market. They are both expensive and time consuming, but they will also allow you to talk to a much larger range of potential customers over a short period of time. I have definitely launched new products as a result of these trade shows that I had previously thought would be dead ducks.
If you can possibly avoid borrowing money then please do so. Banks and other lenders are important, but you must understand where they are coming from. They look at the person in addition to the proposed business idea and plan. Your technical business knowledge, the realism of your business plan, your tenacity and the inherent skills you possess to grow a business will be under the spotlight. These guys are in the game of risk management and asking themselves “what is the probability this business and person are going to make it so that I do not lose my money?”. You have to develop a “sales story” for these guys even more watertight than you would for your most discerning customer. Play the game. Do your homework on the macro economic factors in your sector as well as the drivers and opportunities in your chosen market niche.
As the owner of the money making machine, you need to think about what control levers you have to adjust it and which ones are more effective than others. Every owner needs a set of metrics to review at board meetings. These parameters need to be simple, clear, easily measurable and above all describe the performance of the business. The critical thing to understand is how those metrics change when different actions are implemented.
You need to keep your feet firmly on the ground. I would encourage you to market and hype your products/services but I remember what one of my wise managers once told me “It is OK to hype things up, but just don’t start believing your own hype!”. This situation occurs when you are no longer in touch with your customer’s reality and it is frankly dangerous for your business. The final installment will conclude this twelve part series into the in’s & outs of starting your own business, Look out for ‘Final words of wisdom’.