Starting your own business is an exciting time for any business owner or entrepreneur. But before you dive headfirst into establishing your fledgling company it’s important to do some planning to make sure your new venture is built on the most solid of foundations – and that means asking yourself some critical questions about your business idea.
To help you get started, we’ve highlighted the top four questions to focus on (and why answering them will help you drive your new business forward).
1. Who are my customers?
If you don’t have a reliable customer base, then your new company won’t be able to get off the ground in the first place. So it’s vital that you’ve put plenty of thought into who is going to buy your products and/or services.
The error that many new business owners make is believing that everyone thinks like them. Just because you like your product/service, and think it’s the best thing since sliced bread, it doesn’t mean that the general public will agree with you.
- Try to be objective and put yourself in the shoes of your target audience. Are you catering to their needs?
- Ask yourself, is this a product/service that people will pay money for and buy regularly (regular sales being the lifeblood of your cash flow)?
- Don’t just ask family members and friends what they think – expand your horizons and talk to the kind of person who you think will become a customer.
2. Have you done your homework?
Research is so important when you’re looking to found your own business. You need to be informed about your industry of choice, know the markets, know the seasonal issues and understand just how competitors have had success in this sector.
And this means doing a lot of homework before you even think of setting up the company. The more research you do at the start, the better your decisions will be as you start your business journey: and that’s going to pay dividends in years to come.
- Research the potential market and check that there truly is a customer base out there – and the share your competitors have of this market.
- Go to networking events, talk to other people in the industry and gather as much information as you can (social media can be great for this).
- Think about whether your product/service is a regular purchase for customers or a one-off purchase. This will define your sales and marketing model, not to mention how much revenue you’ll generate from an average customer.
- Is there a seasonal element to consider? Will your sales have peaks and troughs, or be more constant across the whole year? The more ups and downs there are, the less stable your cash flow will be.
3. Is your pricing on point?
Price is a vital element in your new business’s strategy. Price too high and no-one will buy your product; price too low and you won’t make enough revenue to keep the company turning over.
- Think about your selling price and the costs/overheads you’ll incur. Will you make a profit? And how many sales will you need to make to achieve this?
- Work out what wage you’ll need to live on, and consider whether the income from the business has the potential to provide this.
- Think about how much time will need to be invested to produce a product/service – factor in realistic timescales, costs and your hourly rate to make sure your numbers will hold water.
4. Have you thought about volume?
One of the major elements you need to have control over is volume – the level of production and the number of sales needed to keep you afloat and making money.
- Consider the minimum number of items you’ll need to sell, and how many customers you’ll have to service, to actually make a profit.
- Decide on some realistic production and sales numbers and put key performance indicators (KPIs) in place so you can measure how well you’re meeting your targets over time as the business begins trading.
Why you also need a good accountant
There’s another very important thing you need to do when forming your own company: and that’s to get a good accountant involved right from the start.
With an experienced, proactive accountancy firm, like Saint & Co, to help you, the process of setting up registering, running and funding your new venture will be a whole lot easier. And that means far fewer headaches for you and more time to focus on building your customer base and spreading the word about your new business.
- We’ll make sure you’re registered with HMRC and properly set up for VAT, corporation tax, and any other tax liabilities.
- We can advise you on the most productive way to plan your tax – and how to minimise your start-up tax costs.
- We’ll run your accounts and can give you the figures you need as soon as you want them – so you’re always in control of your numbers.
- We’ll give you the business support and advice you need as you travel down the un-trod path of your new business journey.
- We can even advise you on where to find funding for your business and give you access to the right banks, lenders and investors to raise capital.
We’ll help you make a success of your start-up
Having a unique business idea, and becoming the owner of your own new business, is a rewarding and exciting experience. You get to do something that you love, you bring your product/service to a whole community of satisfied customers and you make enough in profit to match your lifestyle and grow the company.
When you work with Saint & Co from the beginning of your business, you can be confident that you’re getting the right numbers, the best support and the most insightful advice on how to run, evolve and grow your start-up.
From there, the world is your oyster – and you know that we’ll be at your side as your company goes from strength to strength.
Get in touch with your local Saint & Co office to talk about your new business and let us show you where we can help you get the most from your new enterprise.