If you decide to start your business, starting a successful business will remain your biggest challenge. Nevertheless, this success will become a great reward for you. Know that ideas are not lacking in most people, but the successful realization of the project often remains the greatest difficulty. There are a few basic principles to achieve this.
Plan the stages of the project
Develop a business plan called a business plan. In a business plan you will detail each aspect of your project by drawing up a precise budget, section by section, in order to win customers according to your commercial strategy.
- Review your business plan regularly, because this support is a real preparation tool in your development strategy .
- Follow all posts. Thoroughly review each position planned in your company by monitoring the costs related to services, the cost per hour, the sales objectives. Use tables made on Excel for example, in order to better organize the information.
- The main function of a business plan is the detailed analysis of the different aspects of your business. It is a question of closely studying all the financial flows, your expenses as well as your projected income, including general expenses and the turnover of your sales. You will deduce your break-even point . How much revenue do you need to generate to at least cover your costs each month?
- If your break-even point seems too high, you need to revise your pricing or hiring.
Identify your customers representing the heart of your target. Analyze your products according to the needs of your customers and not according to what you want to sell. Carefully study the characteristics of this customer portfolio from a geographic and demographic perspective.
- If you have already marketed your products, look at the profile of these customers. If not, identify people who might be interested and match your offer to demand .
- Define your economic or business model. Highlighting its business model will allow you to better define your business objectives. For example, if your products are mainly sold on the internet, you will target your actions on a profile of customers potentially interested in online sales.
- Determine the core target of your competitors. However, it is not necessary to identify it precisely, especially if you are in a commercial niche .
- Target your potential clientele based on statistical data such as age, gender, socio-professional category, geographic area, income level or hobbies.
Study market trends. It’s about identifying new products or trends. You are not going to launch into a product that is already successful. Some trends require an offensive communication strategy. For example, Steve Jobs of Apple was a genius in this area. He revolutionized the world of music by promoting the downloading and distribution of songs .
- Rather, observe market trends and not just those of your own business, your vision will be longer term. For example, the emergence of social networks was a new mode of communication that had a significant impact on the business world .
- Visit colleges with students and talk to them about what interests them.
- Spend 20 minutes a day informing yourself about the market in which you operate. Read magazines, newspapers, books and surf the internet. Explore all possible sources of information to stay in the game and expand your knowledge in this area. This business intelligence will allow you to be more responsive and efficient .
- Start a business that will develop your talents. For example, if you have a background in the arts, don’t go into engineering. If you have some writing skills, search the popular social networks for leads that could tap into that skill.
Define your core values. Write them down. These values will be the foundation of your business. You will organize your structure around these and you will not derogate from them .
- Write down your company’s vision or mission. Ensure that this work is carried out both according to your own values, but also taking into account the approach of your collaborators .
- Be prepared to make small compromises as long as they are in the best interests of your business. Nevertheless, be uncompromising with the core values of the company.
Identify your competitors. Don’t ignore your competitors. Research these companies as much as possible. Don’t copy them, but take inspiration from what makes them successful.
- When you set your prices, you must know the prices of your competitors perfectly.
- Define a commercial strategy around your brand. Find the element that will distinguish you from your competitors such as the impeccable service offered. Some airlines, for example, reduce the service on board to the strict minimum, because they favor low prices. Other companies highlight their on-board services such as the quality of the meals served or the comfort of their seats. These trading strategies are opposite and differentiate them well from each other.
Innovate. A business must evolve so as not to stagnate or even decline. You need to spot market trends and adapt while staying true to your company’s values. You probably have in mind a few examples of innovations that were too hasty in relation to the market. The launch of the latest Coca-Cola did not meet with the expected success, unlike its previous products such as Coca-Cola Zero, which was able to meet the needs of certain consumers for a healthier diet.
- 80% of today’s products did not exist 5 years ago .
- Your product must have a certain lifespan before it is copied. Indeed, a good product will be copied by your competitors over time. In order to survive, you will have to seek to constantly innovate by improving your product or creating another concept .
Optimize your profit
Lower your expenses as much as possible. You need to seriously think about your costs in order to control or reduce them. You will manage to optimize your profit by simply applying the mathematical equation leading to increase the profit by the reduction of your expenses.
- Renegotiate your contracts each year based on your turnover. Do not lock yourself into multi-year contracts leaving you only a possible renegotiation at the end of the term. You must allow yourself the freedom to discuss price and performance conditions with your suppliers when necessary for the smooth running of the business .
- Consider purchasing destocked products. You will benefit from unbeatable prices and you can use them to carry out product tests for your new ranges.
- Monitor and analyze your structural costs, such as office supplies, communication costs. Also control your energy consumption such as the temperature in the offices.
- Be rigorous and demanding. Look at each of your loads and ask yourself how you could reduce it. For example, do you need all of your employees? Could you find cheaper rent? Is it really necessary to continue to conduct an offensive policy on potential customers resulting in significant advertising costs when you have not been getting any feedback for a few months already?
- Track your expenses. Do not be too optimistic in your projects and you will have more control over your expenses. Remember to be reasonable in your expenses, even if your expectations seem higher. If you don’t know exactly what you’re spending, you won’t be able to reduce your expenses.
Estimate your profit margin. To determine your margin rate, set the amount of money needed per deal. If your selling price is set at €100 and your profit is €25, then your margin rate will be 25%. You can use online calculators to help you determine this rate .
- The calculation of this margin rate or gross margin is obtained by the difference between the cost of production and the selling price, corresponding to what you will collect.
- Make sure you have enough cash to deal with a slower-than-expected ramp-up.
- Set aside a certain amount of money to cover expenses for several months when starting your business. Don’t expect to make a profit immediately.
Don’t borrow too much. If you rely on your future profits to repay your loans, your strategy will be very risky.
- Give priority to injecting financial resources from your savings in order to limit your debt.
- Look for one or more financial partners to share the risks.
Surround yourself with a team that adheres to the culture of your company. Even if it is obvious, choosing your collaborators remains one of the fundamental elements to guarantee the good functioning of a business. You must therefore clearly define the spirit in which you wish to work in order to have a team that is perfectly consistent with the culture of your company.
- Carefully study the references of each application. Don’t skimp on the time spent recruiting, especially when starting a business, because the goal is to build a cohesive team .
- Look for people who can invest. Surround yourself with a stable team ready to give the maximum to develop your business. If your employees change regularly, this turnover will affect the growth of the company .
Carefully analyze the different tasks of each workstation. Before starting the hiring process, review all aspects of the job you are going to offer. You will reflect in particular on the essential missions of the position, the skills to have and the objectives to be achieved.
- For this, you will have to write a file describing the position by briefly detailing the different points, as well as the positive elements to attract the best candidate . Be clear about what you expect of an employee for this function, by addressing the schedules or the missions to be accomplished, the skills you consider essential and those less fundamental .
- Even if a leader cannot do everything, recruitment remains an area in which he must invest .
- You could use umbrella companies like some companies do. This employee will not work full-time for you or count as part of the company’s workforce. Make sure that this type of company is up to date with tax and social security obligations .
Value your team. Many employees have had negative work experiences. A deleterious professional climate will necessarily slow down productivity and therefore your business. Show your employees that they are an essential link in the success of your company.
- Be flexible about family issues or emergencies affecting your employees. If an employee really needs to be absent for justified reasons, you will be that much more appreciated and the company will run more efficiently.
- Pay your employees fairly. If your employees feel that they are paid less than they should be, especially for low salaries, they will feel a certain uneasiness and they will show it. Clarify your compensation policy by establishing a clear salary grid.
- Surprise your employees with little attentions. Give flowers to your secretary, give all your employees a day off as a reward for hard work to land a big business contract.
Develop sales and marketing
Don’t overlook the importance of your leads. These prospects represent the number of people over the previous year, having contacted your structure or having been approached by your company .
- The idea is to determine the percentage representing the number of customers who complete their purchase following a first contact .
- You also need to determine the number of products purchased per customer, as well as the average budget spent by that same customer.
- In order to develop your leads, think about a solid communication plan based on social networks. Pinterest and Linkedln are examples of social networks where you should advertise your business. Do not hesitate to hire people specifically attached to this task.
- Focus your financial efforts on prospects rather than brand image. Schedule visits to salons to increase your contacts .
Your geographical location. The best placement is based on what you are selling. Nevertheless, be careful with the choice, because the location could be a real accelerator, but also the cause of the disappearance of your business.
- If your activity requires welcoming visitors to your premises, choose a lively and easily accessible place. If your products are sold mainly on the internet or by telephone, localization is less important. You will be able to make some savings on the premises depending on the location chosen.
- Prospect seriously to find your premises. Carefully consider the environment in which you want to establish yourself, especially if your potential customers are located in the same geographical area or if they need to access your business without difficulty. Does the neighborhood correspond to the defined criteria? Is it a real business district, a zone of dynamic commercial activity ?
- Pay attention to the signage. You obviously want to show your professionalism. Therefore, the image of your business is important. Take care of your advertising and identify suitable locations, then contact the manager of the location, which is often the municipality.