1. Sole trader or limited company?
Which you choose will impact on the tax you pay and how much legal and financial responsibility is laid at your door. As a sole trader you take all the post-tax profits but you are also liable for all of your business’ financial dealings. For a guide on the pros and cons of each, click here.
2. Size up the competition
Who else is doing what you’re planning to do? How well do they do it? By studying the competition you can learn from others’ mistakes – or even what their customers appreciate. Learn how much people are willing to pay for your product or service and how you could enhance the current offerings.
If one big player dominates the market space, focus on what they don’t do well or who they don’t cater for, provide a superior service and you could grab a share of their space. Alternatively, if the market is fragmented, there could be an opportunity to launch a brand that becomes the de facto choice for consumers.
3.Define your target audience
Appealing to everyone appeals to no one. You need to focus on your target audience and style everything, from your website to your marketing campaigns, around them. Make sure you are targeting the right people by sending out questionnaires, speaking to your customers through social media and holding focus groups. The only way to provide a product or service people really want is to get inside their heads. Involve your target customer in the development of your business and continue to test, test, test. Consulting your customers will also make them feel like they have a voice, will breed loyalty and, if you’re lucky, will increase the likelihood of them recommending you to others.
4. Paying yourself
How will you pay yourself? You need to think about this up front. With the best intentions of ploughing profits straight back into the business, you’re going to have to eat, drink and put a roof over your head. Cut back on the luxuries, but figure out what you do need to live on and include it in your outgoings. The bank or any investors would much rather see this than you going back cap-in-hand six months after you told them your business plan made sense.
5. Your business name
Think long and hard about your name: you’re going to be stuck with it as rebrands are expensive and painful. It’ll need to work with an available web domain and will also often be the first thing prospective customers see. Consider what your name needs to say about your business. Should it simply be a case of ‘says what it does on the tin’ or communicate aspects of your brand identity, such as Innocent Drinks, or perhaps geography is important if you’re focused on serving or representing a local area – Manchester Landscaping Ltd or Premium Lincolnshire Sausages Ltd, for instance.