27 February 2017
How to successfully start your own business. Practical advice and information
Have you been considering starting up in business, but the crisis and market uncertainties are holding you back? Do your research, take your time and set yourself objectives… Here is some sensible advice to give you the confidence to take the plunge
It takes more than a good idea to set up a business
You should remember that a good idea is not enough to guarantee business success – you need to find the right way to develop it. Critical thinking, realism and a sound dossier absolutely must provide a firm foundation before you take the plunge. Bear in mind: setting up a business is mostly a matter of common sense.
Experts, suppliers, banks… Do your research!"Use the experience of those around you – it may prove very constructive."
Find out from the people who will be using your business activity: your future customers. Question suppliers, experts (and not just those in the sector you are interested in), your bank and professionals specialised in the field. An in-depth analysis is essential, take into account the pros and cons, the positives and the negatives. The experience of those around you may prove very constructive.
Talk with other entrepreneurs
Talk about your ideas with people who have already taken the plunge before you. You will gather a great deal of good advice and sensible information for a good start. Most importantly, take the time to do your market research and prepare your business plan.
Set yourself specific objectives
You will need to try, refocus, rework and adjust accordingly before realising your objectives. In setting up your business, you need to be a marathon runner rather than a sprinter. Do not give up. You need to set a course for yourself with specific targets, for instance achieving a specific turnover over time or a number of customers. You may need to change direction and explore other avenues.
Set your survival threshold
In any event, your survival threshold should be top of the list, in other words the minimum sales required to achieve a healthy financial balance. Your survival threshold must be determined on the basis of your costs. See a professional specialised in this area.
Set up your business: strength in numbers"Many successes are down to team effort. But do not partner with others without careful consideration."
It is possible to start out on your own, but it is even better if there are two of you. Many successes are down to team effort. However, do not partner with just anyone or with your best friend without careful consideration and without having examined the key questions. Partnering or even being part of a network with other self-employed people may prove to be a winning formula.
Surround yourself with experts
An astute accountant, a banker who understands you, a pragmatic marketing and communication consultant… In every region of Belgium, you can also claim consultancy subsidies and grants and draw on a number of support structures free of charge.
Target your customers
Target your potential customers carefully, work on a specific segment. Offer your customers a straightforward range of products/services. This will enable you to meet your prospective customers' expectations more precisely and establish yourself as a preferential partner in this market segment. Avoid expensive over-diversification.
Be different from your rivals"Always listen to your customers and communicate with them simply and continuously."
Be different from your competitors in terms of deadlines, services and location. You need to be able to answer the following question very precisely. Why should someone buy from you rather than from anyone else? Listen to your customers – they are the ones who will tell you the criteria and expectations which define the offer which differentiates you from your competitors. Continuous and repeated straightforward and transparent communication is required to that end.
Do not underestimate your marketing and communication budget. How do you intend to communicate? Many channels are available, for example the internet, social media and audio-visual media. Your messages must be creative, clear and concise. You should ensure a dynamic presence vis-a-vis your prospective clients.
Organise recurrent messages. To curb costs, you can surround yourself with partners and combine your activities. Word of mouth is an excellent way of passing on information.
Bear in mind your basic costs
Never lose sight of your basic costs. The meter may spin round fast and you risk being faced with a cash shortfall. For example, consider sharing a property or equipment. This will enable you to adjust quickly from the start of your plan. Good budget management will enable you to cope with any unexpected situations. Bear in mind that decision-making and administration may take longer than you think.
When it comes to finance, remember one single keyword: margins! You need to make a profit, in other words margins, to ensure the long-term viability of your business. The margin is the difference between the sale price of the product/service and its cost price. Selling with a small margin is risky – you will need to be certain that you can rely on large volumes. You need to find the right balance between costs and income, limit discounts and optimise the sale price.
Take out insurance
The risk level of your project is mainly related to the initial investments, sectoral trends, the volatility of your customer base (are your future customers channel hoppers or stable?) and the openness of the market in general. Good protection can save you a lot of worries. That is what insurance is for.
What needs to be insured depends on each business. Pinpoint the main dangers, then imagine and anticipate solutions and determine what insurance you need. For example, consider the ING insurance package for the self-employed and businesses, the ING pension plan for business owners or the self-employed or even ING fixed capital life insurance. Nothing beats good prevention which will cut any risks considerably.
The five mistakes which entrepreneurs should avoid
- Not wanting to talk about their project for fear that the idea will be stolen: the risk is smaller than starting out on your own without any advice beforehand.
- Selling cut-price or setting prices too low: wanting to undersell competition will not do you any favours. Offer competitive and fair prices. You will be able to review your rates as soon as volumes allow.
- Wanting to sell to the whole world: the more focused you are, the simpler and more profitable your business will be.
- Setting up a pointlessly complex structure before you have your first customer: do not build too big, start within your means.
- Underestimating market response times: there may be several months between making your first sales and collecting the first payments. Plan sufficient financial reserves.
Be open-minded: all good projects find the financial resources they need. Contact your ING advisor to discuss it or visit our website for starters.