23 Oct 7 secrets to starting a profitable business
The number of start-up businesses in the UK is on the rise, as ambitious entrepreneurs increasingly shirk being an employee in favour of striking out on their own.
But starting any business takes a lot of time, effort and hard work and the digital world we now live in means competition can come from anywhere! The odds are against you – especially in the first few years when you’re finding your feet and trying to carve a niche in your chosen market – so it pays to ensure you are setting out from the strongest possible position.
To build a sustainable, profitable company that not only survives but thrives is the key. So, what can you do to ensure your start-up business has the best chance of success?
Top tips for starting a successful business
Ensure you’re ready
Before launching a new business, it’s vital to check that you’re mentally prepared for the journey ahead. You’ll have to invest a lot of time and energy in the beginning, potentially sacrificing your evenings and weekends and with life as you know it changing beyond recognition. You may also need to take out a loan or invest your life savings, which can be a daunting prospect.
Ensure you’re fully prepared for the risks involved. If you’re leaving your day job to pursue a side hustle, then do as much as you can before giving up the regular income. Research, prep, plan and prepare. Save some money so you have a safety cushion, while you’re getting off the ground.
We’d also recommend using the free version of BRIXX cash flow forecast software to help with the financial planning required.
Write a business plan
A business plan is like a roadmap. It sets out a clear direction for where you’re heading and can help ensure you stay on track.
Without a business plan to keep you focused it can be easy to lose momentum. Outlining your goals and setting yourself targets ensures you’re always working towards a clearly defined purpose. This can also help improve your productivity, by making you concentrate on what is most important for the business.
This doesn’t mean your business can’t be flexible and agile – indeed, that’s super important too – but make sure you define your end goals. Then, even if the path you take to get there changes along the way, you’ll still be heading in the right direction.
Your business plan doesn’t need to be long, simply summarise it over a couple of pages and remember to come back to it regularly. There are some great free resources and templates available from The Princes’ Trust.
Confirm there’s an appetite for your product
Who is going to buy your product or service? If your answer is ‘everyone!’ then it’s time to go back to the drawing board! You need to do some solid and comprehensive research to confirm that there is indeed a market for what you’re planning to offer and also that you’ll be selling it at the right price. The sums need to balance, otherwise, you will never grow a profitable business.
If you don’t have any sales, you don’t have a business. Equally, if it costs more to produce your product than someone is willing to pay for it, then you’ll never make any money! It’s important you’re looking at the whole cost, everything from marketing to overheads, and not just the manufacturing.
You need to know and understand your market to be able to see if you have a business idea with genuine potential. Don’t just rely on the opinions of friends and family, canvas consumers who represent your target customer and also study the competition. Is there a market, and if so, what size is that market? What is the opportunity?
Build credibility and trust
For customers to spend money with you, they first need to be convinced about the value of the product or service on offer. They also need to have trust and confidence in you, to deliver what you’re promising.
Positioning yourself as an expert in your field is one of the best ways to build credibility. If you are able to demonstrate industry-leading expertise, you’ll be in a better position to gain that trust and close those all-important sales.
Make time to enrich your knowledge and skills and to stay on top of industry developments. This will ensure your business remains relevant and ahead of the game. Attend conferences, book professional training and stay up-to-date on the latest industry news.
This will also benefit the business, as anyone operating today needs to be agile and innovative. If your business is standing still, it won’t be long before it’s lagging behind the competition.
Learn to delegate
It’s one of the most important, yet equally, one of the toughest lessons the founder of any new business needs to learn: the art of delegation.
When it’s your own business and you’ve given blood, sweat and tears to get it off the ground, it can be very hard to let go. You may wish to maintain control of absolutely everything and to have it done your way, but the truth is this could limit your success.
If you’re rushing around trying to do everything that means you’re not concentrating on the bigger picture – and that’s what really matters for the growth and profitability of your business. Know where your strengths lie and capitalise on them.
If you’re sorting out the accounts, your IT systems, PR and marketing, managing new business leads, HR, compliance… these are all things that can be delegated to specialists. Doing so will free you up to do what you do best. Use your time strategically and the business will be stronger for it.
Grow your business network
Familiar with the expression “it’s not what you know it’s who you know”? Never has this been truer than in business.
While you may have a remarkable product offer, getting it in front of the right eyes or into the right hands can be a barrier to success. Growing your network is conducive to growing your business. The connections you make and the relationships you form are likely to become your most valuable assets.
You may land a new client through word of mouth recommendations or meet an individual who becomes a trusted business mentor. Reputation is everything. The more people who trust in you, believe in you and are prepared to endorse you, the better it will be for your bottom line in the long run.
Take mistakes on the chin
It’s likely you’ll make mistakes along the way and even the most diligent business leader will occasionally slip-up. The important thing is not to be discouraged or to see a mistake as a setback. Accept it, learn from it and then move on.
Some of the world’s most successful entrepreneurs have endured trials and tribulations in business. Many have had to go through several ideas before striking on the one that finally succeeded.
The key point here is not to give up if you do hit a problem, or things don’t go your way. Mistakes can offer you a powerful learning curve to grow from and with each one, you’ll only get stronger.
Helping you focus on what you do best
Here at Accounting Services for Business, we specialise in supporting early stage businesses and visionary entrepreneurs to achieve their growth ambitions.
Find out more about how we could partner with you to look after your finance function, while supporting you with our Business Development Programme. It will give you an unfair advantage over your competition.
Call us on 01202 755600 or email [email protected]