The global pandemic has devastated the world economy and at the time of writing this it is still unclear how much damage has been done as so much of the economy is drawing down on Government funding and stimulus programmes.
What is clear right now is that many jobs have been lost and many businesses will struggle to recover from the economic impact of lock-down.
If the jobs market is difficult more and more people will be looking to freelance and create micro-businesses to get by and there will be void where businesses haven’t survived the pandemic.
Mark Cuban famously said “Only Morons start a business with a loan” which is easy for him to say with his net worth standing at $4 billion. But debt isn’t always needed to start a business, in fact many businesses that exist today have either started with nothing or grown using other people’s money.
Let’s look at some key components of starting a business from scratch, these will be even more important if you need funding from family, friends, or crowdfunding.
Why do you want to start a business?
Starting a business from scratch will not be easy so before you start, you need to consider why you want to do this and what you are going to sell. The idea of making money can be quite appealing but for a number of years you may have to work harder than the money you earn, so it is important you are motivated and enjoy the work you do.
Lot’s of people start businesses for the appeal of the benefits, being your own boss, unlimited earning potential and having your own time. These all sound wonderful, but the early days can be a lot of work and pressure. You must really enjoy what you are doing and be prepared for 2-3 years of hard work before you will really feel the benefit.
What are you going to sell?
Before you start making business cards, forming a corporate structure, and building websites, you need to find your idea and prove it can make money. In the first couple of years your idea will morph and refine itself, but you need to do some research and testing to see if there is a big enough market for your product / service. Are people willing to pay for business for what you provide?
Why you and Why should they buy?
Understanding the reason why customers should want to buy from you and why they should use your product or service is critical to your start-up success. What makes you different from your competitors, how does your product help your customers? You need to differentiate yourself from your competitors. This means ensuring your product or service has powerful benefits to the customer. Can you list three or four benefits which save time, money or give an amazing experience for your customers?
If you can’t list benefits for your product or service which will compel customers to purchase, you will never have a successful business.
Obvious again, if you are hoping to be an Etsy, Amazon, or eBay mega-star you need to understand what you need to do to get to market. How much will it cost you to sell your product and how will you deliver the service? It would be great if all you needed to do is list your website or add your product to Amazon and it will fly off the shelves but there is a little bit more work involved. Do your research and you will know how to achieve success.
How will you gain repeat business?
If your product or service isn’t designed for repeat business, you’ll have to get lots of new customers all the time. That’s hard work. So how can you build repeat business into your business model. Refills, ranges, refreshers, or monthly updates, what can you add which allows customers to come back and buy again? Repeat customers are essential in building a business which can sustain itself. Having a plan for repeat business from the outset will save you a lot of stress and worry in the long run.
Starting a business is an incredible journey and you’ll remember fondly the funny stories, challenges, and milestones along the way. It may seem hard or an uphill struggle starting from scratch, but it will be a rewarding journey. I can’t emphasise enough the importance of refining your idea before you start, these tips above will help you reduce the time and money building your business.
The more you can refine your business before you start the quicker your business will gain traction, momentum and provide a better income for you.