You have decided you want to start your own business. Be your own boss. Change career. Or simply try something new to get out of your comfort zone and drive your personal growth.
Starting a business can be an exciting venture as well as a challenging one.
Businesses come in all shapes and sizes but the approach to start your own includes 5 essential steps with some Marketing fundamentals are the heart of it.
1 – Be clear on your motivation
3 – Research and validate your idea
4 – Develop your Marketing strategy
5 – Build a solid business plan
1 – Be clear on your motivation
If you have decided to create your own business, it is likely you want to do this for several years.
This means sustaining your enthusiasm, hard work and motivation over time.
As running a business will be a journey, it is important for you to understand your motivation, so you sustain the energy needed to take actions and achieve your goal and desired outcomes.
There are different kinds of motivation, mainly classified into two types: intrinsic and extrinsic.
• Intrinsic: Your motivation comes from within. You are motivated by internal drivers such as personal values, beliefs, purpose, personal interests and passions or simply the sense of satisfaction from doing a task.
• Extrinsic: Your motivation comes from your environment. You are motivated by external rewards such as social approval, status, praise from others, money.
Motivation plays a crucial role in our behaviour, influencing the initiation, direction, intensity and persistence of our actions. So, it is important to understand our motivation better to enhance our performance and achieve our objectives.
As you start the journey of a business owner, ask yourself (and remember over time) WHY you want to do it in the first place. This will help you keep your fire going in the long run and if/when facing challenging times.
2 – Identify a business idea
So, you know why you want to run your own business. But do you know what you want to sell?
• Who is your target audience?
• What is your overall proposition?
• What does it look like in real life?
You might already have the answers to those questions but if you don’t, try the following exercise.
This is based on the IKIGAI concept that is often used to identify Purpose, for us as individuals.
But it can also be used to identity business ideas and overall Purpose for a business.
Drawing 4 intersecting circles, capture the following:
• Circle 1: Your key passions / interests in life (what you like spending your free time on)
• Circle 2: What you are good at (your natural strengths, specific knowledge, current skills)
• Circle 3: What the world needs (this can relate to human, animal, environmental needs)
• Circle 4: What you can monetise / do to earn money
At the intersection of the 4 circles, is your Purpose – as an individual and/or business (which will be closely linked if your run your own business).
You can start with any circle to do this exercise, but you might find it easier to start with circles 1 and 2 before moving to circles 3 and 4.
You may find Circle 3 challenging, but this is when you get to step back and look at the bigger picture. Circle 3 is here to help you identify a potential consumer target and the needs that you can satisfy in a unique way versus the competition. Or identify consumer needs that can be met for the first time through innovative thinking.
Don’t worry if you don’t complete this exercise in one go. Give yourself the time to reflect on each circle and see where the synergies are between the 4. You can also repeat the exercise and identify different business purposes and ideas and reflect on which one appeal to you the most and why.
When it comes to having a Purpose when running a business, there is a mix of views out there. Some people think it is critical. Some don’t. It is totally up to you if you want to reflect on this and set one for your business.
Personally, I think it helps to have a Purpose to identify specific business ideas and keep your motivation going as you navigate the ups and downs of running a business.
3 – Research and validate your business idea
Sadly, many new businesses, products and services fail shortly after being launched or within a few years in market.
So, before you rush into launching your new venture, take some time to research and stress test your business idea for a new product or service, working through the following questions:
• Who is your consumer target and what specific need are you trying to meet? (what are you essentially solving for?)
• How is your consumer target currently satisfying this need?
• Who is your direct and indirect competition?
• What are the market barriers and costs to entry for the product / service you want to launch?
• What is the knowledge, skills, expertise required to succeed in the industry / market you are targeting?
• What is the size of prize? How big is the business opportunity today and in the future?
Don’t let the answers to those questions discourage you. We live in a world filled with a multitude of products and services as well as constant innovation to better meet consumers’ needs across their lifetime.
But, as business failure can be costly, take the time to understand your target audience, industry trends, and potential competitors so you can create an effective Marketing strategy.
4 – Develop your Marketing strategy
Now that you have researched your business idea and decided to go ahead, it is time to work on your Marketing strategy.
Start with the Marketing Mix for your product / service, which consists of 4 P’s.
• Product:
o The first P is “Product.” This refers to the actual goods or services you are offering to your target market.
o Be clear on the features and benefits of your product / service.
o Keep in mind the problems you are solving for your consumer target.
• Price
o Determine how much your consumer target is willing to pay for your product / service.
o Consider factors such as production costs, competitor pricing and the perceived value of your product / service.
o Your pricing strategy should align with your overall business goals and brand positioning in the market.
o Also decide on your price promotion strategy if you are willing to discount your product / service at specific times in the year.
• Place
o “Place” refers to the distribution channels where your consumer target can find, try, buy your product / service. This can be online, in physical stores or both.
o You can sell directly to your target audience, through a 3rd party or both.
o Take the time to understand your consumers’ purchase decision journey and make sure that your distribution strategy reflects their key purchasing and consumption behaviours.
o Your distribution strategy can also enhance the perceived value of your product / service so decide where you want to be seen and available for sale or not.
• Promotion
o Promotion here doesn’t mean price promotions but the Marketing and Communication strategies you use to promote your product / service with your consumer target.
o This includes Advertising, Public Relations, Social Media, Experiential, Sampling and other promotional activities to drive consumer awareness and trial of your product / service.
o Define your Communication strategy: the brand messaging and the mix of communication channels (physical and digital) to reach your target audience.
o Identify the different communication touch points where you can reach your consumer target during their purchase decision journey.
Now, looking at your brand Marketing Mix, articulate what sets your business apart from competitors. That’s what is called your Unique Value Proposition (UVP). Think about:
o What makes your product / service different versus your direct & indirect competition?
o How do your features and benefits differ versus what is already in market?
o What is your product / service Unique Selling Point?
Once you have identified your Unique Value Proposition, make it clear to your consumer target by communicating the unique benefits your product / service provides, in a way that resonate with your audience.
To understand this UVP Marketing concept better, look at examples of brands you come across in your day to day life and try to assess their Unique Value Proposition.
5 – Build a solid business plan
This is a critical step not to be missed when launching any business.
A business plan is a comprehensive document that outlines the key elements and details of a business, providing a valuable roadmap for its success.
While the specific structure and components may vary, a comprehensive business plan outlines your business goals & financial projections, your Marketing strategy & Operational plan and is an active document to help you make informed decisions.
o Business goals and financial projections:
A critical part of your business plan will be your forecast for sales revenue, expenses and profitability over time.
Learn how to read and build basic P&L’s so you can capture key financial information for your business. You don’t need to do complicated financial spreadsheets, but a minimum is required to set your business goals and capture actual results versus targets.
As you work on your financial projections, try to do some basic financial modelling so you understand what levers you can pull to deliver your annual net profit targets.
Aim to quantify:
How many consumers do you need to recruit on average for the total year?
How many products / services do you need to sell per consumer?
What is the average selling price per transaction?
What are the expenses needed to start and operate your business on a 12 months basis (production, Sales, Marketing, staff, physical and/or online presence costs etc… and any other expenses)?
What is your net profit once you subtract all your operating costs from your estimated sales revenue?
By understanding all the components impacting your net profit, you can then see which ones you can increase / decrease to deliver your annual business targets.
As you work on your financial modelling, be realistic with your projections and capture your assumptions so you have them at hand if you need to revisit your numbers.
o Marketing strategy & Operational plan:
Recap on your consumer target, their key needs and your overall product / service proposition.
Summarise your Marketing strategy by outlining the key elements of your Marketing Mix, working across the 4 P’s.
Then capture your Operational plan to reach, attract and retain your consumer target.
What is happening when, where and how to drive consumers’ awareness and trial of your product / service?
What would a 12 months activity calendar look like? When are your key Marketing initiatives taking place?
Does your annual plan have a 360 approach or is it disjointed?
What is your annual Marketing budget? How are you phasing it across the year? What are your big Marketing spends?
What additional resources might you need?
You can be as topline or detailed as you want when capturing your Operational plan.
But make sure you are clear on your 12 months activity road map to get to your desired business targets.
Try to also include a risk analysis: Anticipate and evaluate the potential risks, challenges and uncertainties that could impact your business (as well as additional market opportunities).
Start thinking about contingency plans, risk mitigation strategies and how you might have to adapt your Marketing strategy and/or Operational plan to deliver your business goals.
o Make your business plan an active document:
Keep your business plan concise and focused, ensuring that every section adds value and supports your overall vision. While providing comprehensive information, avoid unnecessary details.
Review and revise your business plan regularly. A business plan is not a static document. Keep it up to date with actual results versus targets, key learnings and revised forecasts if market conditions are changing to your advantage or disadvantage.
This will help you to stay on track with your business goals and course correct your Marketing strategy and/or Operation plan when necessary.
Seek Feedback: Before finalizing your business plan, seek feedback from mentors, industry experts, or potential stakeholders. Constructive feedback can help you refine your financial targets, Marketing strategy, Operational plan and address potential blind spots.
Remember, a business plan is a roadmap for your business’s success. It should be a dynamic tool that helps guide your decisions and adapt to the ever-changing business landscape.
It can also help you secure funding from investors if you are pitching for investments.
A solid business plan helps to support an entrepreneur’s vision, demonstrates clarity of thinking and shows commitment to their business idea, which in turn can build excitement and trust with potential investors.
Additional resources
There are many sources of information and practical advice for you to benefit from when starting a business. From books, podcasts, blogs, videos, online and local communities to coaches and mentors, you won’t be short of support.
I will be adding some of my favourite below shortly.