19 Jul 2021
The importance of knowing your market inside-out cannot be understated. Dedicating time to conducting thorough research of your prospective audience, competitors and market state can help to put your business on the front foot.
Assessing market demand
One of the first things you’ll need to research is the market you’re planning to launch into. Market research can help ensure that there is a viable audience for your product or service, as well as what makes them tick, the problems they need solving and their buying preferences (online, via an app, in store).
Comparing with competitors
While you shouldn’t obsess over your competitors, it’s important to frequently take stock of their activities. This can give you an early insight into changing market trends, as well as identifying gaps in the market that you could leverage to your advantage.
Ensure that you don’t limit this research solely to your direct competitors – e.g. fellow restaurants if you are a restaurateur, but also your indirect competition – this could include takeaway services or other leisure activities such as the cinema.
Whether it’s a new phone or a trip to the hairdressers, the things we often choose to spend our money on are solutions to problems we face each day. As a start-up business, it’s essential that your business is built around solving a problem. The problem you solve doesn’t need to be complicated (it can be as simple as avoiding boredom or needing a haircut), but it does need to add value to the lives of your prospective customers.
However, it’s not enough to simply identify a problem that needs solving – you’ll also need to ensure that the issue is urgent in the minds of your prospective audience, which is central to changing your product or service from a ‘want’, to a ‘need’.
Identifying the problems or ‘pain points’ your product or service will solve will also help when it comes to developing your marketing materials a little later down the line. Convincing prospective customers of the value of your product or service becomes a little easier when you’re able to show them how it will transform their life (for the better, obviously).
Capital for your start-up can come from a number of sources. You could approach your bank to secure a loan, for example – you’ll need to present a sound business plan including profit forecast and estimated time of maturity to give yourself the best chance of success.
There are also a number of grants on offer for start-up businesses. The Development Banc of Wales, established by the Welsh Government, offers a range of financial support depending on business size, purpose, location and age, as well as securing sector specific ‘pots’ that encourage innovation and development. Make sure to take a look at the funding options available using their Finance Locator tool.
You could also consider ‘Crowdfunding’, in which small amounts of capital are invested by a number of donors. There is a variety of crowdfunding types available to suit different businesses, including solely donation, rewards-based and in exchange for equity. Popular crowdfunding websites include KickStarter and the LendingClub.
When you’re thinking about your cash flow, ensure to factor in all expenses. From rent, to office supplies and technology, a website domain name, utilities, marketing expenditure and perhaps even paying yourself a wage, costs can quickly mount up. And don’t neglect the smaller, recurring costs that can catch you out – such as subscription services to payroll or email providers.
Be lean with your financial model and avoid spending money on unnecessary expenses. For example, in the first few months, do you need to rent an office space or will a quick renovation to your spare bedroom suffice?
By focusing on the absolute essentials that deliver value to your customers, you can ensure that you are reaching your business goals in the most cost-effective way.
Especially in the early days of your operation, you’ll likely wear a variety of hats – from marketing to accounts and even sales.
And while you may be comfortable learning ‘on the fly’, it might be useful to know that there is an army of (often free) resources that can help you as you become a master of all trades.
Hit the books
The internet plays host to a selection of high-quality online learning providers – and the best news? Lots of content is free-to-access, meaning you can refresh or update your skillset at no additional cost to you or your business.
The Open University have hundreds of courses, with a dedicated section on ‘Money and Business’. Subjects range from ‘Developing career resilience’ to ‘The Fundamentals of Accounting’ and ‘Speech Making’, prepping you for all aspects of establishing and running a business. Other recommended providers include FutureLearn, HubSpot, Coursera and edX.
And for those short of time, Youtube has a huge library of content to quickly answer your questions. With over 300 hours of content uploaded to Youtube every minute, you can find top tips and advice on money management, advertising on LinkedIn and how to improve your business pitch, as well as topics specific to your industry.
Learn from the best
Sometimes, you need a little advice from someone who has been there before. Luckily, there is lots of support available, especially for Welsh-based start-ups.
Business Wales offer a free mentorship programme specifically aimed at business owners and sole traders. The mentor you’re assigned will have specific experience of working with your industry and will often have been in your position just a few years earlier, meaning they have a holistic understanding of the challenges you’re up against.
To take part, you just need to register with Business Wales. After signing up, a local mentoring agent will reach out to discuss your needs and match you appropriately. You can find out more about the scheme here and view the mentors offering their skills and expertise.
If you’re a young person looking to start your own business, The Prince’s Trust work specifically with 18-30 year olds looking to ‘turn big ideas into a reality’. Under the banner of their Enterprise Programme, young people can access a range of resources including business plan templates, specific advice on securing funding and interactive workshops to help you flesh out your multi-million pound idea.
Over 50? There’s also dedicated support for those with a little more life experience under their belts, with Prime Cymru offering dedicated support to those wanting to ‘become and remain economically active’. They have a dedicated mentorship programme offering one-to-one advice on finance, recruitment and developing self-confidence amid a rapidly changing working environment.
The coronavirus pandemic prompted a huge shift in operations for thousands of businesses, regardless of industry. Many ‘brick-and-mortar’ stores were forced to trade exclusively online, restaurants switched to takeaway services and management consultancies conducted their audits via Zoom.
This digital revolution could have a knock-on impact for your business. Customers may expect you to offer a seamless digital experience, delivery to their doorstep or an online customer service system. Make sure to dedicate some time to thinking about how you’ll operate – both in the current climate and beyond. As a start-up, the ability to react quickly to a changing market could also give you a competitive edge.
Make sure you also think about the ‘hardware’ behind your business – including the technology you’ll need. If you’re working from your spare room, you may also want to consider implementing a phone system (such as an 0800 number) and perhaps renting a ‘PO Box’ address, to give your start-up a professional touch.
That’s all for Part One – keep your eyes peeled for our second instalment later this week!