The Challenges Of Starting A Business

The challenges of starting a business

 

Topics to be covered

• The challenges to start a business
• The positives to starting a business
• What does it take to start a business?
• Landing on an idea to create stand out for your brand
• Case study: Innocent
• Consider the logistics
• Doing your research

 

Setting up a business comes with challenges and potentials for failure but that shouldn’t discourage you

It’s important to consider the risks now so you know whether you would be able to handle them and so you can draw up a contingency plan

• Challenges you may face when starting up a business are
• -Hard work & long hours – never switching off
• Uncertainty and stress
• Financial Risk
• Lack of enough Knowledge or experience
• Political Economic sociological and technical changes over time which may require you to be responsive
• Difficulty creating marketing ‘stand out’
• Expanding the business
• Not receiving profitable income
• Legal pressure

 

Full preparation Is vital to success

According to research 100 million businesses launch every year with only have achieving success

Common reasons business fail includes

• Poor planning
• Bad management
• Lack of knowledge and research in industry
• Poor cash flow
• Not understanding turnover v’s profit
• Insufficient Capital
• Bad products or services
• No website or poor social media presence
• Starting a business for the wrong reasons
• Bad location for premises
• Partnering with the wrong people or taking bad advice
• Expanding to rapidly

 

The Positives of starting a business

We now live a world where becoming an entrepreneur has never been easier- the positives to starting a business are endless – here are a few:

• Freedom of making of decisions
• Increased income
• Financial independence
• Greater flexibility of working hours and of your role=- especially as the business grows
• Being a leader
• Job security
• Creating opportunities within your business for others
• The ability to recruit people for roles you enjoy less
• Being able to follow your passion
• Gaining a sense of achievement & accomplishment
• Being able to work to your strengths

 

What does it take to start a business?

Running a business in no simple task and getting started can be the most challenging aspect!

In the early days when your plan is just a thought you need to be certain that your business idea is viable before making it a reality. While it’s hard to predict the success off a business you can’t rush the planning process.

Landing on a workable idea is more than just deciding on what you will sell and what your branding will be. Your idea to start a retro themed coffee shop might be fantastic in theory but remember that your business won’t be the only one out there

Even if you have a good name for yourself thee expertise & know how, your business still needs a solid plain to sustain longevity in any industry!

 

So how do you develop a viable business idea? 

Every aspiring business owner needs to have the right mindset and resources to get their idea off the ground

Before starting a business, consider these questions

Why do you want to start the business?

What skills knowledge and experience will you use?

Are you willing and able to put in the extra hours and not always get paid for you effort?

What money do you have available to fund the start-up costs of your business and can you support yourself?

Do you have any other sources on income or are you solely relying on the new business to support your income?

Do you have a partner or family to support you if it doesn’t work out?

How will the business be funded? Do you have savings, or do you need financial support from an investor or bank?

 

Many Successful entrepreneurs share common characteristics!

Successful business owner is:

• Hardworking and committed
• Organised and focused
• Good at communication _ communications help you sell your business concept to clients & investors
• Flexible and Adaptable- Good business owners are willing to take advice and be reactive to change
• A risk taker – Be ready to seize and make the most of new opportunity
• Thick skinned – able to handle criticism & failure
• Sociable and good at leading people

 

Landing on an Idea!

As well as the financial means & the right attitude you need a robust business idea.

The ideal business idea should be based on meeting a demand that isn’t currently be services in the current market – or doing it better!

If you want to open an Aesthetics Clinic or Salon & haver chosen a location, you must investigate whether the location you intend to sell in an already has several established businesses with the same treatments.

If it does the chances are your business would directly compete & profits could be diluted. Therefore, your business is not be viable unless its offering something unique!

To determine wither your proposition can fill the gap in the market you must consider your:

• Location
• Competition
• Resources
• Intended Consumers

 

You are more likely to succeed if you

Set up in a suitable place– the premises should be well suited and accessible for your intended market. A clinic or salon near a train station will benefit from high footfall & would be able to directly market to thousands of people in the correct demographic – do not set up closely to established competitors!

Examine the competition – what does your business offer consumers that your competitors don’t. Can you sell you treatments and services more competitively than they do? if not will you prioritise high quality or unique services to make up for it?

Consider the necessary resources – you need to consider the costs of rent, equipment, staff, outsourcing, advertising and your time to ensure your business can profitably deliver the wants and needs of consumers – especially if you have competitors nearby!

Its great to have passion about setting up a business & a necessity to keep you motivated – but be mindful of competition in the vicinity and ensure you find a good, easy to access location, with parking in proximity!

 

What does your business offer that competitors don’t?  

look to add value to treatments, rewards for repeat customers, loyalty schemes and such like.

Have you considered the needs of your intended customers? You may be selling to people who are unfamiliar with the ins and outs of the treatments you offer so have explanation’s on hands by creating leaflets or fliers with FAQ’s.

What type of premises do you need? do you need a shop font to display your services?  Are there enough treatments rooms to cater for multiple therapists should you want to expand, or would you be better off with something smaller that just caters for you?

 

Make sure the rent reflects your position on the high street, as this will have a knock-on effect to exposure to clients. Make sure you know whether you the property is subject to business rates or is exempt. The Estate Agent showing you the property will be able to tell you this and you can also clarify it by contacting the Council the property falls under.

 

Case Study:

 

The smoothie company INNOCENT was started with a great idea by people with the right qualities to be entrepreneurs

The founders were 3 friends who came up with a n idea to sell smoothies. The 3 of them worked busy schedules that made healthy diet and lifestyle difficult. They wanted and easier way to get healthy food into their bodies and realised this must be a problem for other people. So, they started a business selling healthy all-natural smoothies.

To test the popularity of their products they set up a stand at a festival. They displayed a sign in front of their stand that said should we give up jobs to make these smoothies. In front of tow bins one with YES and one with NO & asked people to put their empty bottles in. the smoothie sold out and the yes bin was full! Despite the positive reception from test consumers it took the founders over 9 months to receive funding and get their idea off the ground, the business then gained momentum rapidly!

Innocent now sells over a million smoothies every day and distribute to 18 countries in the world and has over 200 employees.

Through the time they were trying to gain investment they were often presented with the option to change their ide from natural smoothies to ones made from concentrate or with much less health benefits, which they were against

When they started there were no smoothies commercially available that preserved the professional integrity, and this was their strength and gave them a unique identity in the drink’s marketplace. Despite their setbacks with getting the product off the ground they had a commitment to stick to their USP (unique selling point) and ultimately that resulted in their huge success – because they were different!

In their book about starting INNOCENT the co-founders say ‘to come up with an idea we looked for areas where we could identify a problem and then how we could solve it’’ this needed to be addressed prior to us launching the business so we left no stone unturned! The book goes on to advise entrepreneurs to look for the gap between what people want & what’s available & to think how you can do something better than an existing business.

 

Consider the logistics

Once you’ve got a good idea, it’s time to plan. At an early stage there are some basic logistics to think about.

Consider the following –Do you intend to run the business full or part time? will it be your main source of income or additional

Where will the business be – at home or a work premises. Often working from home whilst you establish your new business greatly reduces financial pressure and allows you to invest money back into the business which in turn promotes growth, quicker than if you had the out goings from a shop.

Are you buying an existing business or creating something new from scratch? If you are buying an existing business, you must insist on seeing the last 3 years of books. The previous owner must disclose any debt or finance agreements that have been taken out in the business name. Often this can be complicated and time consuming to establish so its sis recommended to appoint a solicitor to gain clarification.

If you are acquiring an existing business, then it is essential to understand whether business will suffer because of a change of the leading practitioner or management

Have you considered up the legal side of setting up your business? Ensure your premises meets legal requirements and contact your local council for them to clarify the licensing requirement for massage, injectables skin needling & micropigmentation as these all require a special treatments license.

Identify what the objective of your business will be.  Will your business be a ‘lifestyle’ business, or do you have big plans to create a brand and expand? Or will it be a scalable business that you hope to see a substantial crease in business levels & income over time.

 

Doing your research

When starting a business, the importance of doing your research at an early stage cannot be overstated. Your findings form the basis of your business plan and a strong business plan will ensuring a more promising start up and a more robust business.

If you cannot form rational objective responses to most questions asked through this module then you may not be ready to start a business yet.

It is essential to have a clear vision a financial and logistical plan and a workable idea from the start ensures your business offers something of value to customers and can handle the potential uncertainty and instability of the first few months or so.

It also helps you gain the trust if you ever need investment from others.

Don’t get bogged down in too much generic and internet research as there are always variables, ask real people, utilise your social media platform’s & friends & family – they will be the most honest with you and allow you to gauge your honest opinions

 

Exercise

When coming up with a business idea what should you focus on?

Basing your ideas on a gap in the market where needs are not being met?

Figuring out how to undercut your competitors?

On how easy the business will be to sell when you no longer want to run it?

 

In this section you have learnt that

 

• starting a business comes with many challenges to prepare for including financial risks, industry changes uncertainty & stress
• While there are challenges there are numerous benefits to starting a business such a s financial independence and freedom to structure your days how you like, make your own decisions and follow your passion.
• Being organised hard working a sociable good leader who is good at communicating & reactive to change will give you the underpinning knowledge to create a good business.
• Your business idea should be based on delivering a need or delivering better than what is put there in the current marketplace. How can you do it better?
• A good business idea will look to the most cost-effective place to trade from – at home or the right shop premises, research & analyse the competition and consider necessary resources