Starting a new business should be an exciting and optimistic time – you may have a product you are proud of, a service you think is especially strong, or just an idea of how to make a profit by catering for a previously unserved niche.
During the early days, you’ll be finding your feet – and that’s perfectly normal, as it gives you a solid base on which to build.
Beyond those first few months though, it’s time to start thinking about growth, how you can achieve it, and ultimately how to make your new business the biggest possible success.
Business plans are a useful tool in setting up any new company, as they let you set down in clear terms exactly what you want to achieve.
They should include the facts of your start-up finances, broken down into individual budgets for things like marketing, tools, stock purchases and staffing costs where possible.
You should also include less tangible elements of your business though – for example, any problems you think you might encounter, and any goals you want to work towards, however realistic or optimistic they might be.
There is nothing wrong with aiming high, and with a clear business plan, you have a good idea of how to get closer to your loftiest of ambitions.
Guidance on the UK government website outlines the four main aims of a business plan, to give you a starting point:
- Clarify your ideas.
- Spot possible problems.
- Set goals.
- Measure progress.
Choosing your Team
You don’t have to go into business alone, so make sure you have a good team around you to help you through those early days and any challenges they might bring.
This includes external advisors, who you can turn to for advice if you run into any issues you haven’t faced before, as well as anyone you choose to bring into your company itself.
While some people set up in business as a sole trader, many others employ a workforce from Day One – so make sure you manage your team effectively to get the most out of them.
The Forum of Private Business says good leadership is a must, with a clear chain of command from the top of your organisation down; just like your business plan, your leadership should set goals for employees to strive towards, and recognise their success.
“One of the most motivating factors for employees is that good work will be recognised and encouraged. It’s simple psychology – reward good work to encourage the same in the future. Rewards could be in the form of an incentive or simply recognition of someone going the extra mile.” – FPB, ‘How to boost productivity in the workplace’
Importantly, you should trust your staff to do their jobs. That doesn’t mean you shouldn’t check that they are performing as well as you hoped, but it means encouraging them to excel, rather than micromanaging them to get what you want.
Funding and Finance
Finance is the core of any business, from covering your running costs and keeping your cash flow liquid, to the profits you take home at the end of each day, month or year.
Money comes into your business – is used to cover costs, generate interest as savings, or invest in growth and innovation – and ultimately, what you spend goes back out of your business.
Effective accounting means balancing what goes out with what comes in, so that over the long term you can pay off any starter loans you may have taken out, and work towards a business that is profitable in its own right.
Reliable and quality accounting software is vital at any point of a business but never more so than when you are starting out and looking to expand your business or services. Sage One Accounting offers varied and comprehensive options which aid the expansion and success of small businesses including:
- Multi- currency – excellent if you are looking to expand your business to overseas
- Multi-user – a good option if you are growing your team alongside the growth of the business
- Multi-company – allows you to keep all company accounts in one location accessing them through one login
Coping with Change
Any industry changes with time, but when you are a fledgling business, recognising trends within your market can help you not only to survive, but also to capitalise on new opportunities.
Make sure you allow some spending on identifying opportunities, or looking out for a changing audience or customer base, so that you are not left behind before you have even begun.
The Management Consultancies Association represents about 60% of the UK’s management consulting sector and reports that in 2014, British businesses spent £537 million on strategy consulting – an increase of 44%.
“Consultants are supporting businesses in getting ‘match-fit for growth’ – either through developing existing capabilities or through launching new propositions.” – Paul Connolly, director of the MCA Think Tank
By investing in your own strategy, you can place your fledgling business on a level footing with others in your industry and make sure that you, like they, are responding to changing conditions within your market.
“Business is all about solving people’s problems – at a profit.” – Paul Marsden, writer and business consultant
Some organisations are run on a non-profit basis, but any business is only sustainable for as long as it can cover its running costs.
When you write a business plan, you give yourself the best idea of what your ongoing costs are likely to be, and how much turnover it will take not just to pay them, but to prosper on top of that too.
But the work is not over on the day you open your doors for the first time – good business is an ongoing process, and you need a strong support team around you.
Put the right people in place within your organisation and you can focus on your own role as its leader, without the need to micromanage the people doing their jobs at ground level.
Rely on external support where appropriate – from outsourced credit control, to business strategy consultants and lawyers – as their expertise will help you to steer your company in the right direction.
Finally, be ready for change, whether it is triggered by economic conditions or by your own internal innovations and changes in direction.
Your business will typically grow in two ways:
- Organic growth comes from expanding your customer base and marketing your existing products at a higher price or to a larger audience.
- Innovation and expansion of your product range is your gateway to new revenue streams and even greater success.
Set your goals high from day one and have a clear idea of how you will get there – and on whose shoulders you will stand to reach them – and your new business has the best possible chance to succeed.