5 Steps to a Strong Business Foundation
Do you dream of starting your own business? You are not alone. According to a special report by the National Australian Bank: The Lure of Entrepreneurship – Australia’s Startup Culture, 1 in 3 Australians would like to own their own business with 1 in 2 ‘young’ Australians being the most aspirational.
Why such high stats? Because it is believed business owners have more freedom to follow their own passions, set their own schedule and ultimately achieve a healthier work-life balance.
Online businesses in particular offer low cost to entry, a global audience and potentially staggering growth. With the help of easy-to-use website templates and the power of social media, starting a new business has never been easier.
But it’s not all rainbows and unicorns. According to the Australian Bureau of Statistics, more than 60% of small businesses fail within the first 3 years of starting, which proves just how hard executing on a vision really is.
So how do you build a strong business foundation that lasts the distance? Here are 5 critical steps to include in your business startup strategy.
Step 1: Think of a great idea
The best business ideas involve solving a problem.
According to entrepreneur Aaron Patzer, founder of Mint.com, business ideas drawn from your own need or frustration are the best ones because you feel a personal connection to the business purpose which helps fuel motivation and effort levels during tough times.
So how do you identify a problem? Think about your own life – what do you wish could be made easier? Do you have any pain points you could solve and package up for selling?
If it bothers you chances are it bothers other people as well, even if they are not aware of it yet.
Spanx underwear came about because its inventor, Sara Blakeley, wanted to wear a pair of cream pants that had been hanging in her wardrobe for a while.
One day she decided to cut the feet out of control-top pantyhose to wear under them. She wore them to a party, felt amazing and realised ‘this should exist for women’. Her net worth is now valued at more than $1 billion.
Step 2: Know your business
One of the most commonly cited reasons for business failure is lack of strategic planning. If this is beyond your area of expertise or outside your comfort zone, outsource it.
There are many professionals such as accountants and business consultants offering valuable advice. They also provide the added benefit of objectivity, a trait hard to achieve when you’re excited about your own idea.
If you can’t afford to outsource just yet, it’s crucial you take your time to plan your business and decipher its feasibility yourself. Search Google for free business plan templates to get you started and then work on your business plan frequently, in fact, consider it a live document.
Some key areas you need to consider include:
- Vision and mission
- Core values
- USP (unique selling proposition)
- Business structure
- Business model and pricing structure
- Startup costs
- Funding startup costs
- Break-even point
- Launch strategy
- Exit strategy
- Target market
- Strengths, weaknesses, opportunities, and threats
Be sure to check out the Australian Taxation Office website for information on business structures and tax obligations as well as ASIC website for business registration information. Getting either of these wrong could prove costly down the track.
Step 3: Nail your brand
You have the heart and skeleton of your business assembled – now it’s time to give it some soul. The importance of strong branding cannot be overstated especially in a saturated marketplace.
An experienced graphic designer, whether freelance or agency-based, can help translate your vision for the business into a compelling brand that resonates with your target audience.
A good starting point is to look for the personality you want your brand to have. Are you highbrow, whimsical, highly technical? Is your average customer more likely to be a middle-aged office worker or a mobile young digital native?
Refer back to your vision, mission and core values to make sure your brand personality aligns with these. Then research your competitors to find a point of difference you can apply to your brand. You want to stand out, not blend in with the masses.
But you also want to be authentic so don’t subscribe to something that doesn’t feel natural and always keep your target audience in mind.
Consistency is absolutely critical here. All your brands’ touch points – from business cards to website to social media marketing, need to be flawlessly cohesive.
A brand guide can help you achieve that. Spend time with your designer to develop a guide that addresses all the key requirements of your business.
Step 4: Define your MVP (Minimum Viable Product)
Made by popular by Eric Ries in his book The Lean Start-Up, an MVP is a product with a basic set of features, released in order to test a new business idea.
The main benefit of creating an MVP is that you can determine your target markets’ level of interest in your product without developing it to its full extent, essentially reducing your startup risk.
If your MVP is poorly received, you can pivot – meaning change one or more components of your business model – in the hope your new revised product or service will do better.
So how do you define your MVP? You basically need to figure out what your minimal but most valuable set of features are.
To do this go back to the original problem your idea solves, the purpose behind your product or service. Now think like your target audience and ask yourself the following questions:
- What solution have I come here for?
- What steps do I need to do to reach that solution?
- If I don’t use that particular feature, will I still get a solution to my problem?
Balance these answers against implementation costs and the competitive advantages of your product, and you should be able to narrow down your features to define your MVP.
The sooner you do this, the sooner you can get into the market, collect feedback and validate your idea.
Step 5: Create killer content
There’s no point having a great product if no one knows about it.
A digital marketing strategy will help you build brand awareness and an essential ingredient in any digital marketing strategy is content: material that spreads your message, boosts your reputation and ranks highly in search engine results.
When creating content it’s important your copywriting is clear, concise and compelling. You only have seconds to get your message across so keep it easy-to-digest while also aiming to trigger an emotional response from your reader.
According to Eddie Shleyner from VeryGoodCopy.com, emotional reactions are key to inciting action as most people buy with their heart, not with their brain.
The best way to trigger an emotional response is through storytelling – a pleasant story is filled with optimism and hope while a painful one evokes sadness or fear. Both will pull the reader into the experience, create a feeling of empathy and spark action.
There are of course many other digital marketing factors to consider, far too many to mention here. Outsourcing to a digital marketing specialist will give you time to focus on creating killer content. And if creating content is really not your forte, you can outsource that as well.
In summary, starting a new business venture is one of the most rewarding things you can do in life. Just make sure your business foundation is strong and reach out to the experts if you need help.
As Peter Drucker, management consultant, educator and author famously said ‘Do what you do best and outsource the rest.’ You never know, you may even discover a unicorn along the way!