Opening your own SME in the UK can often be a learn-as-you-go process. But, the more smart decisions you make early on based on your preparation and research, the better chance your company has for long term success. If you have an entrepreneurial idea, try these ten tips.
1. Face up to your excuses
Many people dream of becoming entrepreneurs, but they never do. There fears and excuses take over and they do nothing as they don't want to fail. From money to time to responsibilities to not understanding every aspect of running a business, you can make a million cases for not starting a business.
At the SME club we understand that being your own boss is scary. In most cases, new business owners have a lot to lose with little insight into their chances of success. Worrying about the risks of business ownership is normal.
2. Solve a problem
Rather than starting your business thinking about what you can sell and how you can make money, think about what problem you will solve. It’s a lot easier to gain a solid customer base when your business is fixing a problem. Your startup should be filling a hole in a specific market or niche.
Focus on why you are opening your own business and why people would want to use your product or service. Understanding these motives will help you create a brand and market your company to your specific audience. Research what problems your target customers face and how you can help solve them.
3. Listen to everyone
Speak to people about your ride and listen to what others have to say—friends, family, experts, potential customers and even yourself. As you learn, start to work out the business plan in your head and start to write things down and develop a detailed plan.
When you tell people about your startup, consider their body language. Do they genuinely like the idea? Or, are they just being kind but not that excited about your idea. Encourage them to be honest with you and even discuss your fears as this may encourage them to open up of they have similar concerns.
Don’t ignore the power of advice from experts and veteran business owners. These SME owners know first-hand what does and doesn’t work.
4. Calculate the costs
Once you start to develop your business concept, start calculating how much it will cost. You will need to factor in every single business expense necessary to launch and operate. Many SME owners underestimate these costs when they launch. Some costs to bear in mind include rent, supplies, marketing, and more.
Calculate the total cost and then, take whatever you think that amount is and double it. You’ll experience unexpected costs of running a business every month. It’s better to be over prepared than short on funds when you do face unexpected bills.
When you're calculating the cost of starting your business, don’t forget about your personal budget and how much money you need to live, including rent, food, petrol, bills, etc.
5. Keep it simple
If you have a business idea and you’re ready to take the leap and turn the idea into a business be careful not to let your concept snowball into an overcomplicated product or offering. You could, like so many other failed startups, end up with an expensive, elaborate end-product that nobody wants to buy or that doesn't solve the problem you originally intended to solve,
As a new SME owner, stay small and stay focused. Test and retest your business idea and create a simple, quality good or service. A successful business idea should not only fulfill promises to customers but also exceed expectations.
6. Don't give up the day job (immediately!)
If you want to start an SME in the UK, don't feel like you have to quit your day job immediately. Launching a successful startup is a long process and often involves a lot of ground work and research before you can trade and earn an income. Try to build your business in stages and gradually transition from an employee to an entrepreneur.
As an SME owner, it will take some time to earn a steady income so although it may be hard it is better to keep your job and work on the business during the evenings and weekends.
7. Imagine having no money
Our final tip is the most important and this is to imagine yourself having no money and how you would cope in this situation. Starting a business will take up a lot of your resources and you could end up having no cash for a period.
Launching an unsuccessful business idea is a difficult reality for so many entrepreneurs. Remember that over half of all new businesses fail within the first five years of opening. It is a good idea to have a worst case scenario plan rather than just going into the process being naively optimistic. Have a plan for how you could earn income if you can't earn enough through the business. Could you go back to your old job or freelance?
If you do decide to start a business the SME club wish you all the best and we are here to support. Please visit our resource pages for information and recommended partners to help manage every aspect of your business as you grow and adapt.