Essential elements to start-up: Research & USP
Extensive research in your target market is, of course, an essential element of planning any business venture, yet consistently it is overlooked or under-resourced. It's all well and good coming up with a good idea and, no doubt, initially running this by friends and colleagues to get at least an idea of whether there will be a market for the product or service, but a more robust investigation of the potential market can save a whole deal of future pain.
Step number one has to be checking out the opposition. It's extremely rare that a business idea is completely new, so it is worth taking a close look at what other people are doing and defining how your potential offering is going to differ from the existing providers. If there already is a market, how are you going to differentiate your offering? What are you going to provide that will draw customers away from existing providers, or what does your product offer the marketplace that others' do not.
It is also worth experiencing the product or service at first-hand. See how your future competitors do business and think strongly about what you can do differently that will increase customer satisfaction or provide a better service. In addition, of course, do your best to take into account potential alternatives that you can deliver if your initial offering fails to capture customers' imagination.
It's a cliché, but like most clichés, there's an element of truth in it: avoid putting all of your eggs in one basket. If you feel a single product or service is all that you can provide, then you are already seriously undermining your potential for a long and profitable business. Be aware that the marketplace will react to the launch of your product or service and tailor their offering accordingly. If you make the mistake of thinking that, for instance, on price alone you can't be beaten, you can be assured that existing businesses will react accordingly and take advantage, in double quick time, in order to fend off the new competition.
So to conclude, plan your market research, quickly define your Unique Selling Point, get to know the opposition and expect the unexpected.
Post start-up: Stay ahead of the crowd
Should your idea get off the ground and the business is thriving there's still plenty of work to do keeping it on an even keel. As with initially establishing a business, to take your eye off the competition represents a huge potential for disaster. Too many business owners forget that they were once starting out themselves and probably looked very closely at the existing providers in order to see where they are going wrong. It's very easy to become complacent and as a business grows the work involved in keeping it ticking over satisfactorily may increase exponentially.
It's essential that business owners or freelance providers maintain a firm footing in what their particular market is looking for and the best methods for providing what is wanted. Many make the mistake of believing that as they are established they have done all of the hard work and need only count the money as the business continues to roll in. To fall into this trap is folly of the highest order, no business or provider of services can rest on their laurels in our current dynamic marketplace and an extensive knowledge of what the customer wants, and probably what the customer is getting from other providers, will equip you well in your efforts to maintain current market position.
Also as the business grows, you may find that outside help is necessary. Membership organisations such as the Forum of Private Business (FPB) and others are an excellent place for businesses or individuals to look towards when seeking such help. Being a member of such an organisation can provide a host of services that can assist the business owner. FPB, for instance, have a dedicated Member Information Service that offers business advice from an informed team of specialists who are up-to-date with current legislative requirements. FPB also offer a number of money, and time, saving services such as payroll provision, credit-card accounts and even insurance protecting the business owner or freelancer against claims against the company or individual. Especially for the smaller business or freelancer, such services can be a real help as they cover many of the areas that you wouldn't naturally have an extensive knowledge of and can assist considerably in successfully maintaining the health of your business.
Press officer, Forum of Private Business
Freelance UK: Why do many small businesses often fail in the early stages?
"Most often because of changes in the marketplace that either weren't expected or insufficiently planned for. Competition, regardless of the quality of your service, if there is a saturated marketplace, which often leads to 'cut-throat' competition, means it will be extremely difficult to maintain the quality of your offering when faced with competitors who'll do it for less money, even if their service doesn't match up to yours. And of course, lack of sufficient planning is a major obstacle."
Freelance UK: What is the biggest obstacle to aspiring entrepreneurs today in Britain?
"Access to finance is a 'live issue' in the current economic climate. Lots of healthy businesses are prevented from progressing due to the 'risk-averseness' of financial institutions. Regardless of the quality of your idea or competence at your chosen profession, if you can't convince the bank of the worth of your offering and finance is refused - which going by anecdotal evidence is all too often the case - it's unlikely that you will be able to expand if you can't secure the funding."
Freelance UK: Are there any areas of small business or freelance services that are overcrowded - are there for instance, individuals that start-up because of a trend or reaction in the market?
"No particular sector is suffering from overcrowding, what we find is that competition is stiff across all areas of the small business sector. It must also be borne in mind that globalisation is a factor that should be taken into account.
"In the 'Global Village' a business or individual that is geographically remote is just as capable of providing certain services to a customer as the business that is just around the corner. So for every provider it's a job in itself fending off the opposition. Ensuring that you provide the highest quality of service, good value for money and that you take steps to ensure that the product or service is properly marketed are the best methods of ensuring the continued health of your business. By joining a Member Organisation, they can help guide freelancers and new firms through the minefield of potential problems while offering advice on successfully maintaining a healthy enterprise."