This is my opinion on the most important things you need to know in order to start a business — it is important to note that this post won’t go into any of the details around the ‘why’ of starting a business, just the ‘how’. A lot of articles go into the mindset, age and financials of starting a business, but I’m going to avoid going into all of that and I’m going to tell you how to start a business in the most practical steps under the assumption that you have your mind set on it.
There are three ingredients you need to a solid and scalable business.
1. A great product.
2. A great brand.
3. Sales.
Your brand is the identity of the company that you use to sell the product, the product is the value offering that you give in return for money and the sales are the act of transferring value to the consumer. In theory it is very possible to not have the business/brand involved (such as an amazon store), however in my opinion this would impact scale and growth in the future.
1. A great product
A great product is something that has a solid value proposition and solves a real problem in the market. In order create a great product, there needs to be a strategy and then that strategy needs to be implemented well.
Let’s get into the strategy.
Product strategy
1. What makes your product different?
(In theory you can sell any product and if done correctly things can work out well. You don’t need to make a new product; it really is all about the execution. Plenty of companies pop up selling the exact same thing as other companies, however there are always things that you can do to maximize your chances for success).
By innovating in some manner, whether that is creating a completely new product, developing an existing product or simply changing the way the product is perceived, you are setting yourself up by giving the customer a new and unique offer.
2. Is there a market for the product?
Are there people out there willing to part with their disposable income in return for your product? If people aren’t willing to pay for your product, then there isn’t any chance of success.
The question you need to ask is either “what problem am I solving?” or “is this something that the customer needs, and will it make their life better?” One of the worst things that you can do is take the whole market as your potential customer base; by not knowing who your customer is you have no idea how to sell to them. I sell rowing kit to rowers, and someone once told me ‘you are so lucky, you know exactly who your customers are. I’m in high street fashion, I have no idea who mine are!’
3. Is there a viable business case to build a company to sell this product?
This is where you look into the financials to calculate whether you will be able to create a successful venture from the retailing of this product. There are a lot of calculations you can use to work out whether you can make a profit both in the short term with a small team or just you, and in the future with a larger team.
If the answers to all of the above are positive, then in theory you have a viable business.
Product creation and manufacture
The ways to create a product are almost unlimited, but if you keep these points in mind you will be on the right track:
1. Design the product.
An ideal starting point is a visual concept. This is a good place to start because once you
have a product visualized it simplifies the whole process now that you have an end goal. This process can be simple if you know exactly what it is that you want, however it may take some iterations to get it perfect. There are plenty of agencies that exist to help, I once contacted a concept artist that I saw on Instagram who designed products for games and asked whether he could make some concept ideas for masks. They came out incredibly well and were a great starting point for a product. My task was to then turn that concept into a reality.
2. Manufacture this product.
If you are unable to create a cost-effective and realistic supply chain, then the product will never get made and you will never be able to fulfil orders. There are many ways to do this, but the two that I see the most often are:
Get it manufactured in your own country — You will be able to have a lot more interaction in the process and it will be quicker, however it will cost more.
Get it manufactured in the East — This will be far cheaper, however you will need to fulfil large minimums and there may be scope for errors.
As you can see, both options have their pros and cons. It is up to you to decide which is better for you.
I always say the best way to get a company off the ground is find a manufacturer that offers a lower minimum order quantity (MOQ), that is usually a little more expensive and then use that to test the market. You can go all in and put in a much larger order, but I always think the first batch should be used for testing and growing the brand.
3. Ongoing manufacture.
This is far too complex to cover briefly. This all comes down to good procurement and ongoing relationship management with suppliers, or good management if it is done in house. There are a great deal of suppliers out there all over the world and will tell you that they can do anything and make it amazingly. As someone who manufactures clothing here in the UK, I know a great deal about what I do. I get a lot of people getting in contact telling me that they can make my products for me and do it perfectly, but then neglect to ask any questions at all before asking me to put an order with them. Seriously… at least ask me what the stitch types, sizing and colours are!!!
Once you have a great product with a defined userbase, you need to develop a brand to sell it.
A great brand
A brand is different from a company. A company is an entity that you can register on Companies House for next to nothing and will be registered in a week. A brand is the identity that you form around a business in order to communicate and build a relationship with your customers. It is the building of this brand that leads to scale.
A company can function without a brand (this can be seen in retailers on Amazon or Etsy for example) however in terms of scalability and directing customers directly to your website to avoid unwanted fees, a brand is key.
Building a brand is a complex thing which cannot be summarised quickly, however I would do it this way:
1. Decide the how you want your brand to be seen.
In the simplest scenario this can be whatever you want it to be. In the most complex scenario, you would do a 360 evaluation of how every stakeholder involved with your business views it, and then build from there, taking a strategic view of what the brand will look like. A method that simplifies things is to choose a brand archetype (google it) and then base the language around it. At the beginning of OFS we used the ‘Hero’ archetype and
2. Develop the brand image.
Once you have an idea of what the brand will look, like you will create the visuals and verbals to go with it. In order to create consistency across the brand, it is important to weave these into every interaction that a stake holder has with the company in order to build brand authority.
The visuals include the font, the colour scheme, the imagery, and the layout of all the visuals include the messaging. The verbals are the copy that is used in all writing — all of these can be summarised in a brand guideline.
(If you look at the Nike instagram account to the right there is a clear theme in post type and colouring)
3. Implement the brand image.
Your website is your online hub, and your social channels drive brand voice and image. Both of these need to be optimised to amplify your messaging and to really show off what you do.
Sales and Marketing.
There are numerous sales and marketing strategies for different products, however when broken down into simple stages, the aim of marketing is to…
1. Find out who your user is.
2. Find out where they spend their time.
3. Communicate your product.
What I mean by this is… don’t shoot off down the route of making a podcast because that’s what Google says, if your market doesn’t listen to podcasts then there is no point!
Marketing strategy
Find out who your user is & where they spend their time.
If you are a ‘going concern’ this is a lot easier to do as you have existing data to work from. By digging into the data, you can work out which individuals are interacting with your business, and whether that is viewing content or purchasing.
If you are starting from scratch, you would usually have a general idea who the customer is. You can then approach these individuals to start to ask them questions to gauge whether they truly are your customer and how your product can benefit them. By keeping the questions open and letting your customer talk about their interactions with the market, you can find out more about them in order to build a better profile.
Once you have a specific profile of your user, simply make a list of 20 of them and get in contact to ask them questions to work out who they are, what they do, where they spend their time and what drives/influences them. With all that data, you will be able to build a strong campaign to get in front of them.
Marketing implementation
Now that you know who your customer is and where they spend their time, communicate your product to them!
There are different stages of customer psychology that need to be taken into account when communicating. The best way to explain this is the concept of a sales funnel where there are different stages of thought that customers go through (google it); for example, they don’t know who you are, so you create marketing materials more focussed on brand and product awareness. Then once they know more about you, you can retarget those customers with materials specific to converting them into a sale.
Examples of marketing implementation include.
1. If your customers are on Facebook, run Pay Per Click ads on Facebook/Instagram based off a custom audience that was created from data taken from a Facebook pixel embedded into your website in order to sell products.
2. If your customers spend a lot of time on Instagram, reach out to influencers directly or via an agency to collaborate with you.
3. If you are a B2B product targeting professionals, create content on LinkedIn geared towards engagement with that specific market.
In summary
Overall, this is a high-level overview of what it takes to create a business. The focus should always be around the customer, whether its product creation, brand or marketing. To maximise your chances of success, it is very important to focus on your customer’s needs as they are the ones that will be purchasing your products.
Any questions please get in touch!