Of the millions of businesses that start each year a high proportion fail, for a variety of reasons. The COVID 19 pandemic has put a huge strain on economies worldwide, and in such a challenging and uncertain fiscal environment launching a business venture is more perilous than ever. But most businesses that manage to survive and thrive tend to have certain components in place before they even launch. Entrepreneurs have to focus on whether their product is needed, whether they have the expertise and know how to successfully launch, the necessary resources to launch and a sound business model. And finally there need to be customers ready and willing to embrace the product or service on offer. These are broad strokes of course, and there are many other factors which play into whether a business does well or flounders. Let’s look at some essential things your business needs to succeed.
You may have fallen in love with your business idea. In your head it’s all there – the packaging, the branding, the design and functionality of the product itself. Which is all well and good, but if there isn’t a genuine need for your product or service no one is going to want it, need it or be willing to part with their hard earned cash for it. It helps if you have a background in the field or industry your product falls within – real experience with products, people and problems. Attending a seminar or doing a course won’t give you the grounding you need. Turn the thought process around, beginning with searching for a solution, and then a problem it solves. Do you need the product? Do your colleagues, friends and family? If so, great. If not, it’s back to the drawing board.
Experience with the products, services and their potential pitfalls within a certain industry is essential to the success of your business. Your credentials will also be important to everyone you deal with, from employees to investors, customers, suppliers and partners. Not only will expertise help you launch your business, it will also help you build it up for the future.
Money is pretty helpful when it comes to setting up a business, but it isn’t the be-all and end-all. In fact, successful entrepreneurs draw on a vast pool of resources to get them up and running, including free stuff – you’d be surprised at corners that can be cut with free software, mentors, and advisors (again, having experience and contacts in your chosen industry helps with this), used equipment, etc. Due to the pandemic, remote work has become near-ubiquitous, also a huge cost saver – in fact, many businesses are realizing that with free and easy-to-use tools such as Zoom they can eradicate the large overheads needed to maintain office space. Determine what your business requires and find what you need.
Of course, an essential component to a business is a load of paying customers. It is possible – and prudent – to find customers who will commit to buying a product or service before the business even launches. Immediate sales and early cash flow is what gets a company up and running, so try to secure some customers at the get go – this also validates your product as one that people actually need. When you do have a customer base you need to keep them happy, both with your service and follow-up. Personalized touches such as thank you cards, freebies or other functional promotional material goes a long way to securing customer loyalty, and future sales.
A business model is an outline of the way in which your business will generate money. It needs to be a watertight, accurate reflection of everything financial to do with your venture. That means sources of revenue, gross margin, profit margin, operational expenses, pricing, and cost of goods sold. Most successful businesses will have at least 10-20% profit margin. Without that, it will be difficult to survive and flourish. You need to get your numbers right before you begin – a business model will be the first thing any investors or partners will want to see as well.
Starting a business is tough, especially in the current climate, which is simultaneously competitive and highly uncertain. But with careful preparation and self assessment, success could be round the corner.