After helping scores of start ups establish in business, we bring our 10 step guide to creating a successful business.
1. Get clear what you need from the business.
A business has a life of its own, but it needs to give you the business owner the life that you need. If it doesn’t, ultimately you will quit and without you, the business will fail. Too many businesses start without any planning into what the owner needs or wants from their business.
We recommend to think about what you need from the business in three areas: financially, time off and interest/ satisfaction. Another area that may be important could be how and when you exit the business.
2. Pick your market and work out what is important to them.
We have a saying at Crunchers – a business is founded in the mind of its customers. Note we say it is founded in the mind of the customers not the entrepreneur. In other words if you provide something that people want, that is a great foundation stone. If you provide something you are convinced is a brilliant idea without checking anyone else does, it probably won’t go well.
The question then becomes: what do your customers want. We therefore need to start with who our business is aimed at. Knowing who you are aiming to serve will inform everything you do in your business. This group will have ways they like to interact, expectations on service, branding they like and branding they distrust, products they can afford and ones they can’t. The more you can be clear on the kind of clients you are going to market to, the easier your business planning becomes.
This clarity will shape the way you present the business, the products you offer, the price you set, even the way you deliver your product or service.
As part of this process, we highly recommend to read Tim Williams book ‘Positioning for Professionals’
. It provides incredible insight the way people’s minds work in choosing the products and services that they consume and a step by step guide to establishing who your customers will be and the business you are going to offer them.
3. Create a menu of products and/or services you will offer.
Get clear what each on will take to deliver, both in terms of your time and money. Read up on pricing, especially value pricing as an alternative to ‘cost-plus’ pricing. Set prices for your products and services. Consider equipment and services that you will need to have in place.
4. Decide what marketing tactics you will be using.
Get clear what each on will take to put into effect and make your best estimate of the returns you might get in terms of new clients and sales. There are literally hundreds if not thousands of ways you could choose to market your business but we can’t do them all.
Some comparison of the cost/ benefit of the most likely to produce success will be useful.
5. Create your budget.
A budget is to a business owner what pen and paper is to a designer. Designers no that embarking on making something without first at least sketching it out is fraught with danger. The same is true of a business without a budget. Yet the majority of businesses owners start in business without any budget. At Crunchers we are recommending Liveplan
as the best budgeting tool we can find, but whatever the tool, time spent on a budget is time well spent. Use the building blocks of your product list and marketing tactics to create your budget.
6. Work out your staffing plan.
Although most new business owners start doing everything but we recommend from the start that you try and find ways of getting others to take work off you the business owner.
Successful businesses are a team game and from the start we need to be thinking how we are going to be creating a team around us.
Before starting this we highly recommend reading Michael Gerber’s E-Myth
and looking into Talent Dynamics
profiling to see where you are best suited putting your energy into the business.
7. Do a ‘time budget’.
Many business owners create businesses that rely on their owners contributing vast amounts of unpaid time.
Typically these businesses suffer a slow and lingering death as the goodwill of the business owner dwindles for the business they have brought into existence.
A ‘time budget’ starts to build up the amount time required from you in marketing and delivering your service, along with admin, IT, HR and whatever else will be required of you the business owner. Be sure that when you are making a profit in the ‘money budget’ you also have enough time to do everything. Check that the profit made is a fair recompense for your time. If it isn’t go back to the drawing board.
8. Do a cash-flow forecast.
We need to remember that profit and ‘money in the bank’ are two different things. If we run out of money in business we will be forced to close the business and therefore we need to check that we are not setting ourselves up to fail but forgetting to see that we have enough money at all times. Think about the timing of sales and money in the bank, when we will paying our suppliers, staff and ourselves. This is a process of trying to predict the future and making sure we don’t allow a profitable business to fail for the lack of working capital.
9. Get as many people as you can to review your plans.
Each review is like a stress-test. It is better that the plan fails at this point than a year in when months of work and thousands of pounds have been spent. Measure the plan against the personal goals you set at the beginning. Keep reworking it until it all hangs together in a coherent whole. Don’t be afraid to knock the whole project on the head if you realize that the plan won’t stand up.
10. Commit and get going.
No matter how good your planning, nothing works without action. In the end building a business is the cumulation of thousands if not millions of actions. This last step is probably the most important of all.
As W H Murray wrote about the Scottish Himalayas Expedition:
“Until one is committed, there is hesitancy, the chance to draw back– Concerning all acts of initiative (and creation), there is one elementary truth that ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then Providence moves too.
All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way.
Whatever you can do, or dream you can do, begin it. Boldness has genius, power, and magic in it. Begin it now.”