Starting a business can be a rewarding endeavor but there are certain rules you should abide by if you want to make it a roaring success. Anyone can start a business but not all can succeed, especially in these torrid economic times. By following the five golden rules for business start-ups, you stand the best chance of starting and running a successful and profitable business.
1. Research, Research, Research
Business often starts with the catalyst of a killer idea however no business should strive to become more than an idea until vigorous market research has been conducted. Market research tells you if your business idea is likely to work and if you are likely to have customers. It helps you define your target market, how much they have to spend, and if they are likely to buy your product or service. What you think might be a winner might be completely unattractive to those you think may buy it. You can never tell if your idea will be successful until you test it on the market. Always analyze your research results objectively. If you are going to twist your findings in order to show the result you were hoping for, then the time spent on research will be wasted. And if you find that you have to do this to make your business idea viable then you will be starting out on very shaky foundations.
2. Planning your Vision and Making it a Reality
If your market research bears fruit then that is the time to make your business plan. Your business plan should define your business idea, set out your vision for the future, contain solid financial projections, and demonstrate how you will reach out to your target market in order to sell your product or service. If you require external funding to get your business off the ground then you will need a watertight business plan in order to convince potential investors.
3. Establish your Finance Infrastructure Early
Running a business is hard work which is made 10x harder if you are disorganized from the start. This is why the third golden rule for business start-ups is to get your systems in place as early as possible. This means your accounts and accounting system, a place to store your receipts, invoicing, filing, computer systems, databases, and anything else you need to run your business and, more importantly, keep the cash flow running smoothly.
4. Don’t Sell Yourself Short
All businesses struggle to get those first few clients and it can be tempting to under-price and undercut in order to win business. In some cases, such as in the case of a longer-term relationship, this can be a worthwhile way to start generating income. On the whole, though, you should charge a fair and competitive rate for your products or services from the start and only discount selectively in a targeted and strategic way. It is a common observation of many business start-ups that once they upped their prices, the orders came flooding in. As a general rule of thumb, clients usually believe that you get what you pay for and low prices carry connotations of poor quality of desperation. It can also be difficult to raise your prices once you’ve set them low, particularly for existing customers.
5. Marketing Pays its Way
When funds are tight, particularly at the beginning, it can be difficult to pay out for various forms of marketing or find the time in your ever-busy schedule. Many new business owners neglect the marketing aspect of setting up a business until the phone stops ringing. Get ahead of the game and begin your marketing efforts from the moment you set up. Marketing carries unbeatable return on investment and in many cases, like that of Social Media Marketing, it is completely free and only costs a little bit of your time every day which in the long term can prove to be worth its weight in gold.