Lots of people dream of starting their own business. And while many may have stopped themselves in the past for fear of not succeeding, the COVID-19 business shut-downs appear to have been the catalyst for a surge of entrepreneurial start-ups.
According to a report from the University of London, in the UK alone, more than 400,000 start-ups were formed in 2020. Increases in the number of new businesses have also been noted across Europe while the New York Times reported that the number of Americans applying to start their own business increased by 24% last year despite the impact of the coronavirus pandemic.
Layoffs and the idea of “if not now, when?” seem to be the two main spurs for people becoming their own boss.
But while it’s admirable to finally take the plunge, if you’re thinking about starting your own business, there are some critical points to consider in the short-term to help boost success in the long run. And who better to ask about those than folk who’ve been there, done that or helped countless others get the ball rolling.
Consider your Why
Sylvia Nicholas a certified career coach and the founder and CEO of SN Human Resources Consulting advises would-be business owners to get crystal clear on why they’re deciding to throw in the 9-5 towel for a biz of their own.
“Starting a business is hard and maintaining a business is even harder”, says Sylvia, who’s also a coach on the Coach Space. “It requires stamina, commitment, and both the will to succeed and to go through many obstacles”.
Knowing your “why” will help you to navigate the hard times. “It won’t make it easier,” she says, “but it will make it worth it if you believe in yourself and your idea, and if you believe that your business will generate money and help others”.
Consider your What
Laura Pollard, the founder of Perfect Property, Ireland’s fastest growing online property portal, wholly agrees and points to the importance of ensuring your business offers customers exactly what they actually want.
“Your business must be able to solve a real market problem that you are passionate about”, she says. “You can create the most amazing solution, but if it doesn’t solve a problem or solve that problem better than your competition, then you are likely fighting a losing battle”.
Laura’s advice for making your business idea fly is to use a “product-market fit as your guiding principle as well as the input of potential future customers”.
The first determines whether there is a strong market need for your product or service, and the second will help you to match it with customers’ specific desires.
“Customer input should be continuous, even once you’ve launched as this will help you to refine your offering and messaging” Laura says. “When the market changes, like we have seen with COVID-19, it’s vital to speak to customers to understand how their needs have changed too. Then if necessary, you can pivot your business or product to match”.
Consider your Who
It’s crucial, then, that you define your market before you put out your product, says Michelle McAllister, co-founder with her husband Gareth of Ahascragh Distillery, a new whiskey and gin craft distillery in the West of Ireland. “You have to know your market and stick with it. That way, as you’re developing your idea for your business, you’re developing it with your customers’ various needs in mind”.
Michelle and Gareth began plans to restore an old derelict mill into a state-of-the-art distillery in late 2019. But when COVID-19 hit everything came to a standstill. “It was a difficult time,” Michelle admits, “but in many ways, it gave us the headspace to really define the product and the market. We were thinking big, but we could start small and grow the business step-by-step”.
Since then, they’ve opened a local café and craft shop, have introduced three branded spirits, are halfway through the old mill restoration, and recently launched the first round of affordable public shares in their business.
“We’ve done this all while engaging with our community,” she says. “That’s so important: Get to know your community as they, family and friends are the best believers and supporters in what you are trying to do. Without them, it’s hard to build up a company”.
Consider your How
Of course, once you’ve committed to your business idea and are clear on your market, you will need capital to get motoring. According to business mentoring organisation, Score, the number one reason 82% of small businesses fail is down to cash flow problems.
A brilliant idea or product gets you rolling up your sleeves – but a focused financial plan will assure you wade through the work that needs to be done.
“Having a well-articulated and focused business model with realistic financial projections that clearly show key milestones along the journey is essential”, says Gareth McAllister of Ahascragh Distillery. That way, even if cash is tight, you can allocate funds over a specific timeframe to make sure important releases and roll-out of events are financially covered.
Glenda Smithson, an international tax consultant with a focus on helping ex-pat entrepreneurs agrees. “You need to have a financial plan with financial and strategic information outlining how you will build your business and how you will fund it”, she says.
Glenda, who is based in Malaga, Spain, and set up her company GJS International Tax last year, notes that even if you’re setting up as a solopreneur, “the most important thing to know is what the financial impact is on your personal budget. Will you pay more tax? If so, how much? Is it manageable and is it included in your business plan?”
If you’re starting small too, Sylvia recommends thinking twice before ditching the day job. “If you still have a job and want to start a business, keep your job on the side until your business starts generating money. If you are out of a job, start small like freelancing, taste the water first”.
It’s by tasting the water, she says, putting yourself out there, researching your product and market, and getting clear on whether you’re able to commit time, energy and finances, that you’ll figure out whether it’s truly time to take the plunge and start your own dream business.