11 Essential Tips For Starting A Business In 2023
Alem Al-Khamiri, Mentor of the STEAMhouse Hatchery Program and Digital Director of Fuel Communications writes about the essentials for starting a new business in 2023.
Starting a new business is an exciting and daunting challenge, which is probably why you’re here looking at tips for starting a business of your own. Now you’re here, however, you might be wondering why you should pay any notice to anything said below. Well, while I obviously didn’t start a business in 2023, I did start my own business - Ruckus Marketing - in 2017 and ran it until 2019 when I sold it to another, more established company in the same industry. Now, I help to run that company - Fuel Communications - and have also worked with a number of start ups and SMEs to help ensure they get off on the right foot.
That’s enough about me, but before I begin sharing some tips for starting a new business, I’d like to be clear that I will not be covering any financial aspects within this article. There are simply too many considerations, and any advice would need to be tailored to both your business and personal situation to be of any real value. That said, I couldn’t put a list of essential tips for starting a new business together without at least mentioning the need to seek financial advice as it is, without a doubt, one of the most important things to think about.
Be Honest With Yourself
Owning your own company comes with many perks, but there are also a lot of pitfalls. For instance, you have flexibility in principle, but in practice, you’ll likely never work so many hours in a week. Moreover, employment comes with a level of certainty and financial security that ownership does not.
In short, the first thing you ought to do when thinking about starting a new business is asking whether doing so is genuinely right for you. If you are in a relationship or have dependents, then I strongly recommend you bring them into the conversation, as your choice to move forward will likely have an effect on them too. Even if you decide that it’s not suitable for you but still believe you have an idea that can be commercialised, there are other options to consider such as licensing.
Pick The Right Partner(s)
While it’s absolutely possible to go solo, a lot of us choose to go into business with a partner or partners. Being in business with the right partner is easily one of the most enjoyable and rewarding relationships you can have. You support each other, bounce ideas around, learn the other’s skills, and generally have someone that’s pulling in the exact same direction as you. Having a bad partner on the other hand can kill a company before it even begins.
Bad partners are not necessarily bad people or even bad friends, but simply people who aren’t right for you as a business partner. Your motivations and priorities might differ, your ethics may diverge, your communications styles could clash, and so on. Obviously, there is no way to really know what people are going to be like as business partners until you get stuck in, but that doesn’t mean you have to go in with blinkers on. Get to know any potential partner as well as possible if you don’t already and if you do, ask yourself whether they would complement you professionally.
Decide On The Best Legal Structure
Whilst it is tempting to start up as easily as possible, as sole trader for example, it is really worth researching the best legal structure for your business at the outset. A friendly lawyer or accountant (yes, they exist) can help you with this. In a best case scenario, it will mean you get your hard-earned profits in the most tax efficient way. In a worst-case it could make the difference between losing your assets and having a bad credit rating for years to come. In any event, your clients or customers will want the assurance they are working with a legit start up, so credibility is really important.
Get Working Capital Into The Business
Starting a business without putting any money in makes an already challenging situation that much more tenuous. In the end, businesses are all about money and not putting any in is like expecting to drive a car sans fuel. Putting money into your company not only provides working capital but also incentivises you and any partners to knuckle down and get working to recoup your investment. If you cannot self-fund, you may need to explore other funding avenues like a loan, commercial finance, or seed funding. Each comes with its own hurdles and assorted pros and cons, but in the end they are each a means to an end and ought to be considered if you’re in need.
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Assign & Agree On Roles
Most business owners, understandably, like to project the persona of being a “Founder”, Owner, CEO, Director, or Entrepreneur and while they may very well be these things, they are also the receptionist, bookkeeper, custodian, and all the rest. This is because when starting a new business, you have to be willing to do anything and everything (at least for a while).
When I first started my business, I had the skill set that I built my service offering around but I also had to be the credit controller, business development manager, and weekend support. My business partner, on the otherhand, was the bookkeeper, invoice administrator, and “admin monkey”. Naturally, there was crossover and we both did a bit of everything, but assigning roles meant that there was somebody ultimately responsible for those things getting done. Neither one of us could say “I thought you were doing that” when it came to our assigned roles. We proved time and time again that this system was by no means fool-proof, but it worked more often than not and always helped.
Decide What Direction The Business Is Going To Go
It may seem strange, but how you want your business journey to end is actually something you should think of pretty early on. Some companies are set up to grow at a steady pace, supporting their owners financially and growing over time (in’shallah). These are your traditional business models and while planning does go into them, there’s an element of responsivity. They aren’t rudderless ships and there’s a general course to follow, but the destination isn’t pre-determined (it’s all about the journey and friends made along the way). On the other hand, some businesses are made with the founder’s or founders’ exit in mind from day one. Timelines and performance targets can vary but this is the sort of model that that tends to be favoured by those intending to put a lot in and take relatively little out, in the hopes of a significant payout at the end.
On the extreme side of this, we have the businesses that are typically referred to as “Start Ups”, which require a great deal of planning and funding to get precisely where they want to go. What’s more, Start Ups need to grow quickly, meaning their founders have to be able to keep up with the workload while wooing potential investors and enticing funding. These are high risk-high reward propositions, with around 90% failing. Even the majority of those that are venture-backed fail, so choosing to go down this route is absolutely not for the faint of heart.
Whatever model you favour, it’s important to decide early on. If you’re not sure, I’d recommend you look at what’s recommended personally, professionally, financially, and legally before starting a business of each kind.
Make Sure You’re Covered
Money is generally tight when starting a new business, which is why young businesses have a tendency to forgo things like insurances and properly drawn up contracts. This is a mistake.
While you don’t need to build out your suite of documents on day one, it’s important to identify the areas in which you are most vulnerable and ensure those areas are protected from the outset. For instance, if you are offering services directly to clients, you will want to ensure a proper contract is in place that highlights your obligations and theirs. This will guarantee that both sides have a clear understanding of what’s expected from the other and protect you in the event that the client disputes an invoice or claims you’ve under-delivered.
Utilise Inexpensive Office Space
When you first start, chances are you’ll be working from your home or the home a business partner. You may lie to yourself and say you can work effectively from a cafe or pub, but you can’t and it’s a bad idea. Trust me, you will spend too much money and get too little done. Running a business from home is a great way to save time and money in the early days, but I cannot say that I’d recommend it full-time in the long term.
Nowadays, there are places where you can go to work alongside other motivated people in a similar situation to you. For instance, you have the BCU STEAMhouse Hatchery and Incubator in the city centre of Birmingham, where you can hot-desk or get a dedicated desk (for a surprisingly nominal fee). This isn’t to say that you can’t work from home several days a week or that working from home will necessarily hamper your success. Still, you will invariably benefit from spending some time in an office environment. At the very least, shared offices are a great place to find leads and pick up referrals.
Build A Brand
Building a brand is not something you can do overnight, but you can get the foundations in place pretty quickly. While it is tempting to jump straight to designing the brand logo, there are several key points you should really consider first to ensure you build a solid foundation for your brand.
- Research your target audience and your competitors - Where can you find your audience, and how are the competition talking to them?
- Decide on your focus and personality - If your brand was a person, how would it sound? How do you want to communicate with your audience?
- Choose your business name - This is a big one! Make sure you understand what names would resonate with your audience, and make sure it is not a name used by your competition!
- Write your slogan - What is your mission statement? How can this be summed up in a simple sentence or phrase?
When you have worked your way through all of the above, it is now time to start working on your brand logo! Think about the colours, fonts and symbols that represent your company and business sector.
Once you have designed your logo, you should use it consistently and clearly across all of your marketing and communication materials.
Be Clear About Your Offering
This may sound obvious, but you’d be surprised how many people are unable to articulate what their company provides. If your business is based around a product, you should be able to clearly explain what problem that product solves and who it solves that problem for. Likewise, if you offer a service, who’s in need of that service, and why should they come to you over other similar service providers?
Not every product or service needs to be unique and innovative. Most are not. The vast majority of new businesses hope to exploit failings that they themselves have experienced as customers or clients. For example, you might offer a similar product to everyone else but with enhanced post-purchase support or manufacture using higher quality materials for improved longevity and durability. In the end, however, it doesn’t matter how good your product or service is if you are unable to get across what makes it unique.
Market Yourself As Well As Your Business
When I was starting up, I foolishly didn’t read ‘tips for starting a business in 2017’ and so I missed out on something that I would only really come to appreciate years later. Marketing your business through social media, websites, branded print, and so on is common practice, but what’s often neglected is personal PR. Just as a great business idea can die on the vine due to a bad founder, a mediocre business can thrive off the back of an exceptional one. There are all sorts of ways to market yourself these days, with LinkedIn being a firm favourite. That said, nothing works quite as well as “pressing the flesh” so meeting people in person is practically a must.
Networking is a great way of growing both your business and personal profile, so make sure you attend local networking events to get your name out there. That said, networking, like any kind of marketing, isn’t a magic bullet or quick-fix. You will need to stick at it and will likely see many of the same faces from one event to the next. Cultivating these relationships can help you in many ways, from helping you acquire new customers to providing you with access to specialist support. Even those who operate in the same space as you can be worth getting to know and could become fantastic referral connections.
Digital Director of Fuel Communications