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On Friday I had the pleasure to attend business startup training from the NWES at their Grays office. A sobering thought is that 75% of new businesses fail in the first 3 years, however NWES has > 74% success of businesses surviving beyond 3 years; who they have helped an coached. This gave me at least 5 great tips which are around the following areas;

1) Develop a survival budget
2) Develop a startup costs document
3) Have the qualities of success, or develop them
4) Carry out market research on your idea, and if it’s not good pivot!
5) Think about whether self employment is right for you
6) Develop an action plan and next steps

And here are the tips in more detail;

1) Develop a survival budget

Personal survival budget

The form to fill in for you personal survival budget

You should look at your current outgoings or estimated expenditure (a) and subtract your estimated other income (b), and then do the calculation of (a) – (b) = Personal Survival Budget. This is the minimum your business needs to be making in net income to allow you to survive. The expenses should be written down on a yearly basis.

2) Develop a start up costs document

Startup costs

Calculating your startup costs

Look at your capital expenditure costs (a) this is for hardware, property, vehicles, printers, ovens i.e. big physical goods that you need (not stock). Then take the revenue costs (b) which are stock, advertising costs, flyers, website(s), packaging, and day to day running costs initially – for when you are starting up. You then can calculate the startup costs by doing (a) + (b) = startup costs. Capital Expenditure (a) + Revenue costs (b).

3) Have the qualities of success, or develop them

Having good communication is important, after-all you are your business. Attention to detail is very important. Have a business plan, and execute it with hard work and dedication. Be confident – confidence is important, as is believing in yourself and your product; confidence and passion. There is a phrase that says the ‘customer is always right’, but really it’s actually the ‘customer always thinks they are right’ – it is important to deliver customer service and also important to manage difficult clients, or not take on difficult clients. Which links to resilience, you have to be able to recover from knock backs, for example when dealing with a difficult customer or client.

NLP cycle

The mental cycle of NLP

NLP suggests that ones belief creates ones reality. In that our thoughts are linked to out feelings, actions and the consequences, and by thinking more positively, or turning negative thoughts into more rational positive thoughts, then we can feel better, make more positive steps forward, and have a better outcome. Having a positive mental attitude is very important, and an example is getting up in the morning and thinking the weather sucks and thinking you don’t feel great, and then you end up not going in; conversely you could turn this around and say yes the weather is bad, but I’m going to have a fantastic day, take the opportunity and I’m going to feel good, etc, etc.

Knowledge, experience and understanding of the business is important. And if you’ve never worked doing this kind of thing, find the opportunity to try it out, e.g. by volunteering, before you dive into it, to make sure it’s what you want to do.

“If it’s to be; it’s up to me” – you have to go out and market yourself. Don’t expect customers to just come to you, you have to work tirelessly to market yourself.

And the final quality here that is very important is to be able to learn by your mistakes; in starting up a new business you will make mistakes, and the important thing is to show resilience and learn from them, and not be negatively affected by them.

4) Carry out market research on your idea, and if it’s not good pivot!

You need to find out whether there is demand for you idea. You need to understand the competition, and if there is no competition, ask whether that means there is no demand for the idea. Compared to the competition perform a SWOT analysis and identify your unique selling point. The important thing here is carrying out market research, to determine whether others really want you idea.

Market research is so important, in fact it should be a cornerstone of you business / new project. It’s not about you it’s about your customers, and it’s not about what you want, but about what your customer wants. You need to find out about you customers; who they are, where they are, what they want, how much will they pay; and this is especially important if you are trying to sell a product. An example is a jewellery producer, who loved one bangle (and made lots) and didn’t like the cheaper earrings (she made fewer), on taking to market, her least favourite was the biggest seller (but she didn’t have enough), and she didn’t sell her favourite. Again, it’s finding out what the customer wants; not what you want.

Always think about the target audience, and keep the target audience in mind. And when defining the features of the product or service (what the product or service does), also think about the benefits for the customer for consuming the service; what does it allow the customer to do, and why would the customer buy it. Also think about what is you USP, Unique Selling Point, and market research can help you develop this. E.g. if you where to drive along and see a field of cows you might just keep on driving, but if one in the field was bright purple, you might stop and investigate. So what is you’re purple cow?

What is your purple cow?

Also market research can give you clarification as to what kind of business you are really in; for example Parker thought they were in the pen manufacturing business, only they discovered that the majority of their customers were buying their products to give to others as gifts. They pivoted, as they realised they were actually in the gift industry, and appropriately adjusted their product, packaging and marketing to fit in with their actual client basis.

There are two forms of market research;

1) Primary research – Research you do yourself
2) Secondary research – Research that you get ‘off the shelf’ – e.g. reports, journals, off-the-shelf reports

Primary research – For example, creating a survey on survey monkey https://www.surveymonkey.co.uk, this can be free of paid. You can also buy survey responses from surveys that have already been performed! You could also do door to door market research, for example a new gardener may wish to ask; ‘Have you got a garden?’ – with no garden they will not be interested in a gardener, ‘Do you enjoy gardening?’, if they do it’s unlikely they will need a gardener, ‘Have you used a gardening service before?’, past behaviour often influences future behaviour, ‘How much are you willing to pay’, this is really important because you can be the best gardener but if you are charging more than your customers can afford you will not get any work. Finally you have an ‘other’ field to capture any miscellaneous nuggets that you pick up that don’t fit into the questions you have planned.

Secondary research – For example Keynote https://www.keynote.co.uk, is a paid service, that allows you to get huge amounts of statistics and market insight into the area of business you are interested in. Even better, it is free in any Essex library to use. Another example is Cobweb http://cobra.cobwebinfo.com again it’s paid, but available in Essex libraries, and you can also get access via the library website into your home. These provide great secondary research market research insight into different businesses.

5) Think about whether self employment is right for you

This is very important, if you have been used to working for a large company and working with lot’s of people, with a regular income, you need to think about what you are getting into. You will be relying on yourself for income, and income may not be (at least to start with) regular. Not only that you will often be working from home initially for a lot of businesses, and this could potentially be quite lonely for some. However doing plenty of networking, and meeting suppliers and clients can help with this. It’s also important to evaluate your personal circumstances in terms of whether you have the financial fall back if it goes wrong, whether you have a personal support structure around you, whether you have dependents (e.g. if you have 3 children under the age of 5 you may not be able to dedicate as much time to the business as it may need). However to play devils advocate, all these challenges may actually mean it is in fact the best time to start for you. You need to be comfortable taking these risks and making the jump.

6) Develop an action plan of next steps

Based on the above, using either a pad of paper, a spreadsheet or maybe a checklist in something like Things, Priority Matrix or Trello, then create a action plan to perform some of the above steps.