6 Ways to Give Your New Business a Head Start Here's what you need to know to set your business on the path to success.
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At the start of a business, it can be difficult to know what is best. How does one grow? Should you keep expanding your product line or focus on getting new customers?
Getting lost in this maze will inevitably lead you down an unproductive path, and all too soon, your company becomes more of a has-been than anything else. I'm sure we've all seen our fair share of them — companies that were good for a while but then just stopped being so great.
1. Define your "why"
The best way to know why you're launching your business is by understanding the difference between personal needs and marketplace demand.
Personal needs are something that comes from deep inside of us, whereas marketplace demands arise when people can't find a solution for their problem in society.
If it's personal, then there will always be more customers with similar problems who can connect with what we offer, but if they don't see any value in the product, those would just be potential lost sales.
When I started my first local business, I had a personal problem I wanted to solve, and in the process of doing research, I found that there weren't any local stores that offered what I had in mind. Meaning, my business had a marketplace demand.
Related: Passion, People, Process
2. Know what makes you different and share it
Market research is the most important aspect of any business. Without it, you're not going to know how to respond to a changing market and come out on top. If your competitors are one step ahead of you, then they'll be able to take advantage every time conditions change for them.
A local business needs to stand out from the other local businesses. For example, your local town doesn't really need another sandwich shop, so catering more specifically toward food allergies is something you need to do right out of the gate. The first step is doing some research on what will work best, then applying that knowledge.
3. Clarify your target customers
It's important to have an idea about who should be targeted as your customer base before diving into any local market. Knowing this can help guide decisions such as product-line expansion or marketing efforts because you know right off the bat which customers have a higher chance of being interested in buying products from your business.
Businesses that are too quick to launch without thinking about who their customers will be or why they would want to buy from them come up with a product no one wants.
4. Get feedback
If you already have local customers, they will be your first point of contact for feedback and new ideas on how to improve the company. You may not need as much marketing because local people are already familiar with your business and know what it is all about. Locals also tend to trust local businesses more than larger chains, which means that if yours is thriving, others might want a piece too.
Related: How to Really Hear and Use Customer Feedback
5. Write a business plan
It is important to take the time to think of what kind of tone you want your business to have. Once you've created a strategy for yourself, answer these questions: What are my ultimate goals? Who am I selling this product or service to? You can find all the answers in a good business plan.
The key to success is a well-thought-out business plan. Start small and employ a model that will allow you to gradually move from your humble beginnings into the big leagues. In particular, make sure you have accounted for startup costs such as labor or office space.
6. Assess your finances
I was so excited to start my own business because I had a perfect idea. What really threw me off guard is that not only do you need some capital for a startup, but also funds set aside in case of emergencies.
It's easy enough to figure out how much money it takes just by doing the math and coming up with your monthly expenses plus overhead costs like rent or office space, plus future expenses such as inventory or operating materials, which are additional upfront-cash expenditures before turning any profit on your venture.
Another thing to keep in mind is your cash flow. When I first started my business, it was difficult for me to determine how much money would come in each month and what expenses would be at the end of that same period. It's important to know this before you start because otherwise, you'll have a small budget when things go wrong.
Related: How to Create a Budget for Your Startup
When I started my side project, a lifestyle website, I made sure to have a buffer because I knew that building it from scratch would take time, and there were no guarantees of how successful it was going to be.
The local business world is an ever-changing place. If you're thinking about starting a local business, take the time to do your research first and come up with some good ideas. Remember that standing out from the crowd will help you succeed in this local market. Finally, make sure, when deciding on what kind of products or services you're offering, to know who would be most likely interested in buying them.
These steps are important so your small business doesn't get lost among all the others trying to get noticed too. Now go ahead and start planning your own local-business dream project — it'll be worth it!