Reflecting on this piece of research, I have to say it's not a surprise to me that the leaders and managers of smaller business are just as determined as ever to make it through these uncertain times. It also holds that the foundations that make a strong, successful business remain pretty much the same. Technologies, customer expectations, the competition and more are ever changing, however the core thread that holds a business together remain consistent.
While by no means a full summary, here are just a few headlines to think about during the early days of building a new business.
Tenacity and determination are two valuable traits that stand out when it comes to the individuals who choose to start their own businesses. As a business idea moves on to self-employment as a means to replace income from employment, then through the various stages of growth to when a first employee is taken on and beyond, it’s vital that a robust plan is in place to deliver what is valued by customers whilst capturing a profit for the business owner.
This new survey by Opus Energy highlights that those with the drive and determination to do their own thing are prepared to put their own money behind such ventures. We often hear about those striving to secure loans to start a business or seek equity capital before they have sold a product or service but this is not always a realistic option. Think whether you would invest your own savings in a new business that has yet to prove itself with a few sales. There are exceptions to this where higher levels for funding is needed for equipment or machinery for example before launching a business, however for many businesses it’s reasonable to develop a first prototype to test in the market.
Early sales, beyond those to ones immediate network of contacts, are the real test of a new or early stage business. When a ‘stranger’ buys your product or service there is more value behind that sale and once the momentum kicks in that’s the time to think again about how best to finance the next stage of growth.
Iterate to improve. Ask your first customers what they think about your product or service and use that knowledge to refine, hone, extend or enhance your products and services. Often a product or service is ‘good enough’ to sell. You may want to add more features or test it a few more times but in reality it’s what your customers think that’s important, not what you think can be created or developed.
Once you fully understand your business model ie how you create, deliver and capture value, you can understand how best to scale up. Scaling up demands consistent, repeatable operations where you can secure economies of scale through increased volumes.
This survey reinforces the point that British SMEs are vital to the health of our economy and remain positive in times of uncertainty. Small businesses generated £2 trillion 2018 so we need to encourage and support those taking the plunge in to setting up a new business.
Listen & Learn
Aim to get it right first time by getting help to test your approach, network wisely and listen to business people who have walked in your shoes.
Finally remember that people buy from people so being self aware and building a balanced team with a complementary set of skills underlines all the steps you can take to get the right products and services created to deliver what your customers and clients need and want.
Good luck with your venture
Susan Elliott | VitalSix, an Innovation Catalyst partner
[email protected] | 0118 304 0660