5 Frequently Forgotten Steps That Could Destroy Your New Startup
Everything’s in place to get your startup off the ground. Or is it? Take a look at these five often-overlooked issues that can leave your new business floundering if you fail to tackle them right from the get-go…
Backing Up Your Gut Feeling With Research
Even seasoned corporate insiders are guilty of failing to do their marketing homework from time to time. Take, for instance, a recent IBM study showing that more than 80% of chief marketers admit to relying mostly on “hunches and experience” rather than hard data to inform their marketing decisions. Your new idea isn’t disruptive if there isn’t a market to disrupt in the first place. Are you sure your proposed offering meets an actual need? Is the market large enough for you to turn a profit? Is there a clearly defined way to carve a niche against your competitors’ offerings?
There’s nothing wrong with intuition – so long as you remember to back it up with evidence in the form of market research. Industry body market research papers, trade association websites, interviews with members of your target group, competitors’ sites, social media: studying all of these will ensure you’re not relying solely on a hunch.
Protecting Your Business Name
Even if yours isn’t primarily an online business, assuming you want an online presence for your business, you’ve probably already registered a website domain name for it. You should also have checked that your proposed business name isn’t already in use by someone in the same (or similar) niche, appealing to the same geographical market.
At the same time, think about the future. For instance, even if you don’t intend to operate as a limited company just yet, it may still be worth registering a company with the same name as your business. You can keep this going as a dormant company without actually using it as a vehicle for your business. No two companies can have the same name. As such, registering a company with the same name as your business stops anyone else getting there first and potentially causing confusion and reputational problems.
Doing Thorough Costings On Your First Big Order
Out of the blue comes a huge order. You’ll need to draft in extra help to fulfil it – but you sign the contract without hesitation…
It’s easy to assume that ‘big is best’ without stopping to consider whether it’s worth your while to take on the job. For instance, if you need to bring extra resources on board, how much will this cost? Factoring this in, are you sure the contract is still profitable? Not doing your sums could mean rushing headlong into a loss-making situation.
Giving Your First Major Customer A Credit Health Check
In the very early days, it may be that your business is reliant on a single rolling contract to stay afloat. Your long term objective here is clear; to diversify your client base to prevent placing all your eggs in one basket. In the meantime, with so much invested in one place, you need to be as certain as you can about the financial stability of your client.
Does the business have a trail of country court judgments behind it? If it’s a limited company, are you able to view its accounts and do they look healthy? What are people saying about it across social platforms and industry forums? Don’t forget to do a little digging before you sign up.
Making Sure You’re Covered
So you’re not planning on taking on any employees just yet; you don’t have a company vehicle and you’re not inviting customers onto your premises. Why, you may ask, should you think about insurance?
Take a step back and consider the impact to your fledgling business of a big customer going bust and failing to pay an outstanding account. Also, think about the reputational and financial implications of a claim for professional negligence against you – even if that claim turns out to be unfounded. Speak to a specialist insurance broker such as Bluefin Professions to provide risk management advice and make sure your start-up isn’t critically exposed.