Most business ideas are borne out of a desire to change something; to do it better, faster, cheaper (or more profitably).
The energy around a start-up is always tangible and there’s no lack of enthusiasm when it comes to getting things ready for launch. But, it’s important to take the time to check your idea is sound and to take careful steps to ensure you build your dream and not a nightmare experience.
Building a business is one thing. Creating something that is likely to be successful and sustainable is quite another. We’ve seen, during crisis-hit 2020, that you never know what’s around the corner and your business needs to be carefully thought through and constructed to weather the storm.
Read on for my Ultimate To-Do List For Successful Business Startups.
Build Solid Foundations
This is a little bit about planning and a little bit about investing. For many entrepreneurs, the idea itself is the key to success and, in their mind, hard work will get them there. However, as with anything new, first impressions count. That’s why branding and messaging is so important.
Don’t skimp at this stage. The temptation to rush something to market may be strong but getting the wrong brand – or a weak look and feel – could well be the difference between success and failure. Jumping into the business world is a big decision. You need to be completely convinced you have a great idea.
Additionally, sound foundations and a deep understanding of why you’re doing what you are will stand you in better stead for meeting future challenges.
During the COVID crisis, businesses that were able to pivot quickly – to revive and thrive – were those who knew their brand and purpose inside out and could therefore visualise where they sat in the ‘new normal’.
Invest in a proper study, work out your avatars, understand your market and consider what your brand needs to be synonymous with. Ask yourself what problems your brand is solving; have you got a unique proposition?
Know Your Network
Often in business, it’s not what you know, it’s who you know. Who has the expertise that you need to tap into? When it comes to startups, the journey from concept to funding, finding expertise and needing to expand can happen rapidly. If you truly believe your idea has legs, you owe it to yourself to spend some time researching how you will achieve each of these stages in the journey. Ask yourself:
- What sort of funding do you need and where can you get it?
- What does your initial team look like? Are they in your network or do you need to find them?
- Have you got the business-wide experience or acumen to drive launch and expansion quickly or do you need to buy this in?
Experience of significant interruption to normal processes has highlighted the importance of business ecosystems and being well networked to survive. No business is an island and your support network comes into its own when the going gets tough.
Focus on Value
I’ve blogged before about how to create a unique value proposition and this concept is so critical to any business startup, even before the proposition takes shape.
With any new idea, you must be able to determine and communicate what value it is adding to the existing offerings in the market. If you can’t identify this, you will struggle to convince potential customers as to why they should do business with you. It is key for gaining the attention and buy-in of investors but also so important in ensuring growth. To grow and scale in as short a timeframe as possible, you need a frictionless business. One of the trickiest things to overcome (and therefore the biggest generator of friction) is competition and a lack of USP so make this one of the first things you think about alongside your new idea.
It’s often tempting for inspired and enthusiastic entrepreneurs to come up with lots of ideas and continually increase their scope. However, the business world these days is much more of an ecosystem. For true success, it’s better to be specific and excel in one area rather than trying to be the expert across a spectrum of areas. Creating a niche and then building a strong presence within it is critical to success.
There are several areas where it pays to be specific. One is in creating and understanding your ideal client avatar. By being clear about who you want to do business you will be far more likely to attract those people. Saying you want to focus on female entrepreneurs is woolly. Saying you’re keen to work with female entrepreneurs in the finance sector who are aiming to exit their business successfully within 5 years is really going to speak to the right people.
Get comfortable outside your comfort zone
Building a successful business was never meant to be easy and it seems the world in which we operate is becoming more complex. Risks are harder to see and assess, yet still need to be calculated and assessed. As an entrepreneur you are highly likely to need to make judgement calls here and there without necessarily having the clarity that you’d like as to what the future holds.
Back in 2017, I wrote a similar blog, Seven Simple Questions To Ask Before Starting Your Own Business. Not much has changed in terms of my advice but the reality in which you read it has been turned on its head. As I concluded then, factors such as your network and the way you build the foundations of your business remain of paramount importance. In addition, we now need to add flexibility and on-the-spot innovative thinking to our ever growing list of skills.
Starting a business is a learning process, no matter how many times you might have done it before. Although it’s sometimes good to learn from your mistakes, you don’t want to fall into common traps if a little research and guidance can help you to avoid this. So, with that in mind, here’s our list of the top 5 mistakes made by startup entrepreneurs, and a little guidance on how to avoid them.
1. Not putting in the right amount of planning
There are entrepreneurs who totally underestimate the amount of planning it takes to get a business idea off the ground but there are also those who never quite make it to market and miss the window of opportunity to successfully launch their new idea. Neither are ideal.
Planning may get in the way of an exciting idea but it’s essential if you’re going to get it right. Every area of the business has to be researched, from understanding the size and opportunity in the sector to knowing as much as you can about your target audience. This needs to be balanced with accepting that sometimes you have to go to market without everything being perfect.
That’s why, at Streamlion, we offer a free initial consultation to all our prospective clients. It helps us – and you – fully understand the scope of the project and, as we support businesses at all stages of their startup journey and through their growth, we can make sure you’ve not forgotten anything.
2. Not prioritising money matters
Again, there are two ways business startup owners can make mistakes when it comes to money. Firstly, many simply aren’t aware of the raft of different funding arrangements that are available to them. Not having the right information at the start of their journey will instantly put an entrepreneur on the back foot. It’s impossible to plan a successful business if you don’t even know the scope of what might be possible.
Secondly, and perhaps for the same reason, entrepreneurs will often either spend too much, too soon or assume they need a huge amount of cash upfront in order to be successful.
Starting out on a business journey is stressful enough so we’d recommend working with an experienced organisation like Streamlion when it comes to accessing funding. Our previous experience speeds up the process and increases your chances of a successful application.
3. Neglecting the nuts and bolts of policy and process
Maybe because this is another ‘dry’ topic, but it’s surprising how many entrepreneurs take risks when it comes to things like legal protection, contracts and the implementation of proper processes. These things are like foundations for your business. Growing with them in place is a lot easier than retrospectively adding them.
Start by filing for the proper legal structure and business registration and follow this on by enforcing contracts, processes and protection from the outset. At Streamlion, we have helped many new businesses by optimising their processes and ensuring their business is efficient as soon as it is launched.
4. Failing to embrace change
For some business owners, their idea is their baby and woe betide anyone who questions it. Being too ‘in love’ with your idea can be a recipe for disaster as it’s likely this will lead to the wrong ways of working. It might mean you try to do everything yourself, so as to get things exactly as you dreamt them; you might become resistant to change and therefore unable to evolve when you need to or you could become over-confident and expand too quickly.
Whichever way you look at it, it’s always good to seek and consider the opinions of experts, whether they are a part of your team or someone you pay for advice and guidance. In our experience of change management, we have found that it is one of the most important things for a business to get right. The trick is – and this is where our experience comes in – to effect change with the minimum of disruption to the business.
5. Starting without considering the end of the journey
Every good business plan should have an exit strategy. If you feel certain of success, why would you not decide how you will maximise the benefit of that success? As part of the initial planning phase, it’s really important to scope out what you think success looks like and, therefore, at what point you might want to cash in and move on to your next project.
Of course, exit strategies don’t necessarily mean leaving the business. Many entrepreneurs like to keep a guiding stake, perhaps as Chair of the Board or as a non-executive director. Exit plans are particularly important if you’ve started the business with the help of an investor, of course, and your strategy for this will need to be a part of the initial plan requesting investment.
At Streamlion, we’ve worked with new and established businesses to understand the best time to sell and move on. We like to think of it as a succession plan for your business journey.
Ultimately, launching a new business involves some risk and every entrepreneur will view this differently. If you’re armed with research, plans and have consulted those whose opinions you value, you can at least make your risk assessment in a calculated way.
You can have the very best business idea ever but, without a compelling value proposition, it might never get off the ground. Why? Because your value proposition is what lets your audience know why they should buy from you and you alone. It’s your power play, your ace card, or, to use marketing lingo, your USP.
A value proposition is officially described as “a positioning statement that explains what benefit you provide to whom and how you do it uniquely well.”
A winning value proposition will capture the essence of your business in one short paragraph. Think Uber: Tap the app, get a ride. Uber is the smartest way to get around. One tap and a car comes directly to you. Your driver knows exactly where to go. And the payment is completely cashless.
Not only is this value proposition simple and easy to understand, it actually names all the things that people don’t like about the competition – never being able to find a cab, drivers getting lost, not having cash on you when you need it most – and turns them into Uber’s USP. These are the pain points that Uber has set out to resolve. In this case, they are also the benefits customers can expect and the reason we should all flock to Uber and ignore any other taxi companies that might want our business.
How will your value proposition generate revenue?
At Streamlion Consulting, we work almost exclusively with start-up or scale-up businesses. We, therefore, spend a lot of time discussing the merits of, and the added value brought by a new or growing business idea. It’s this time and energy which many entrepreneurs cut out of the process. In their enthusiasm to start trading, they fail to get a clear enough understanding of the problem they are trying to solve or how their business is different from the next.
And, to answer the question about revenue, the very first thing a compelling value proposition will do is get you access to funding and investment.
Essentially, a strong value proposition will contain a little marketing messaging, some operational information and an idea of strategy. By bringing so many messages to the market, it will be highly effective at convincing buyers and decision-makers that they should be doing business with you. And, once this process is underway, revenue is an inevitability.
To work really well, your value proposition also needs to be succinct, specific and service-focused. In some ways, it represents the very start of your customer experience.
How does a value proposition work?
In a nutshell, a good value proposition will provide the differentiator between your business and your competition.
Renowned businessman and investor, Warren Buffett, refers to them as an ‘economic moat’. This is a great visualisation: the presence of a powerful value proposition will help fend off competition and protect your market dominance.
What are Streamlion’s top tips on creating a convincing value proposition?
Defining your business in a clear and succinct way is a skill. As business owners or entrepreneurs with a great idea, it can be easy to get bogged down in detail, to focus too much on the infinite moving parts that make our business so amazing. But we don’t need this level of detail in order to engage our audience. Quite the opposite, in fact.
Our first Top Tip is to start with a group brainstorming session. You need to get as much information as you can out of people’s heads and into a mind map or something visual. This needs to include what problem you are solving and why you believe you are different. You can either do this with a team from within the organisation or together with an impartial third party.
The key to driving value from these discussions is to continually revisit the purpose of your business and question what problem it solves. You can also go on to discuss whether that problem needs solving and why.
Once you’ve brainstormed everything, and discounted anything that is irrelevant, not convincing or too complex, you should be left with the building blocks of your value proposition.
Our second Top Tip is to keep it simple. Don’t try to complicate or obfuscate. There are no points for big words here. Simply try to write down your purpose. Forbes.com have a great breakdown of a typical value proposition template:
For (target customers)
- Who are dissatisfied with (the current alternative)
- Our product is (new product)
- That provides (key problem-solving capability)
- Unlike (the product alternative)
As with any marketing material, authenticity and building trust with our audience is key to success. This leads nicely to our third and final Top Tip, which is to always have proof. You should be able to back up your claims with customer reviews or testimonials, or independent research and polls. You may well believe that you are ‘the best’ or ‘market-leading’ but if you can’t back that up, you will pay the ultimate price for breaking the trust of your audience.
There are lots of tips around on how to survive today’s somewhat dystopian circumstances. For businesses of any size, the focus must be on managing cash carefully, looking after people and understanding how the restrictions affect trading.
But, where there’s crisis, there’s opportunity (to quote Einstein) and for many businesses, this peculiar event could be their making. Here are my top tips to find the opportunities that exist for you.
1. Authenticity and vulnerability are not just buzz words
Honesty is the best policy, so the saying goes. These days though, it’s about so much more than telling the truth. Trust of official bodies, including brands, is at an all time low and many more of our interactions happen on digital pathways than face to face.
Social media gets a lot of criticism for presenting a falsely positive reality but there have been some very honest and extremely vulnerable posts recently which have attracted massive engagement. Showing vulnerability is key to gaining the trust of others and doing so can be very powerful for you as well as your audience. Don’t be afraid to say the bottom has fallen out of your pipeline. Perhaps you’re using all your new-found free time to help others. Why not share this and keep those genuine conversations going. Lots of your contacts will be in the same position and will appreciate your candour.
2. Build goodwill among existing clients
Here’s a novel idea: why not pick up the phone to your clients for a chat? Everyone will be feeling cut off and many are likely to have a little more time to talk than usual. Showing concern by having a chat could be a valuable way of nurturing the relationship and they might be thinking you’re either flat out or closed. You can let them know what you’re able to do or how you can help.
The way in which you show up now, as a supplier or service provider will set a standard by which people will judge your business in the future. It’s an excellent opportunity to really delight your existing customers. Think about all the touchpoints you have with them (which will have changed given current restrictions). Make sure any that have disappeared are replaced with an alternative and look at what you can offer to your clients which may help or support with the challenges they may be facing.
3. Pivot your business if you can
There’s lots of new coverage of our larger manufacturers tweaking their production lines to help with the shortages of ventilators and hand sanitiser. It’s also possible for smaller businesses to react to the crisis with new ways of working. Many of those who provide a service have been easily able to take this online with the help of Zoom or Skype and other businesses are keeping their audiences engaged with newsletters which help them to adapt to a limited way of life.
For those who’ve been left with nothing to fill their days, look for a contact who might have been left in the opposite situation. Some industries are busier than before – could they use your help and support? You could also turn to community. I know of an investor who is helping a café deliver veg boxes using wholesalers thus helping them stay afloat which is generating much needed cash for their cafés that are not allowed to open at the moment.
If there’s really nothing you can do differently, do make sure you communicate what you have done to your audience. This page on the PWC website shows they are responding to the crisis and puts them in a positive light as an organisation that cares about its people and is intent on doing the right thing.
4. Look after number one!
Paying attention to self-care is critical at times like this. No matter how resilient you are as a person, this type of experience will increase your stress levels. Make sure you set aside time to recharge and allow your mind to process everything that is happening. Your business is nothing if you are too stressed to run it and your people will thank you for being able to stay calm in the face of crisis and make the right decisions.
5. Develop your skills
If you’ve always shied away from giving webinars or showing up on social media through video, why not take this opportunity to improve your skills? Investigate what running a webinar involves. Can you pull your network together to share advice and ideas? As well as bringing the possibility to make a real difference to people, you will be generating useful content for your social media channels, letting people know you’re still there and willing to help.
6. Be ready for what comes next!
We’re not talking about further measures to stem the spread of COVID-19, but rather the point at which life can return to normal. We will get there eventually and, when we do, the businesses that have made good decisions and used their down time wisely will be the first out of the starting blocks. Being ready for this means maintaining your profile online with social media posts and having an up-to-date website, looking after your people so they want to continue working with you after the crisis and gearing yourself up for a potentially quick ramp-up in activity. Let’s face it the filing will probably still be the last thing on your list but it’s the perfect time to get this done too, physically and virtually. Get that CRM updated and be ready for the future when it gets here!
There’s no doubt about it, these are unusual times. But I want to leave you with a quote by John F Kennedy which provides food for thought in how we might get through to the other side:
“The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger–but recognize the opportunity.”
Here are some useful links with information about the virus and how it impacts small businesses and start-ups.
To find out more about our services click here.