Do you want to start your own business but have limited funds and lack direction in knowing where to start? Then this article is perfect for you. We'll explore some steps you need to consider when starting your own business and then inspire and motivate you with some tips and guidance from thought leaders who started out the same way and have achieved success.
Table of Contents
Taking the First Steps
As scary as those first steps can feel, starting your own business and being your own boss can be a fantastic adventure to take. Yet, when starting out, you'll need to invest extra hours, and your work/life balance may take a hit. You'll also become reliant on yourself to bring in enough finances to support yourself and your family. However, you'll also gain the freedom to pursue your passions, discover your purpose, and set your own schedules.
For some, starting out part-time with a business as a side gig alongside another job can feel like a less scary step; knowing that they have something supporting them financially until their business takes off can feel like the more secure option.
How to Start a UK Small Business
When thinking about starting a small business, it's important to do your research on the viability of your ideas and have a clearly laid out plan to achieve them. For example, have you considered if it's a product or service you want to sell or if you want to sell remotely, running your business from home or in person from a business premise? If you sell products in person, you could have extra costs such as licenses, leases and rents as opposed to working from home.
Market Research
Once you know what product or service you're interested in selling, it's important to do your research. Start by clearly defining your target audience, where they are based, and who your direct and indirect competitors are. Once you have identified your target audience, you can further refine it by creating your customer avatars. Customer avatars are a representation of your ideal customer.
Direct Competitors are those who offer the same services for the same needs and have the same type of ideal customer.
Indirect Competitors are those who have a crossover and serve similar customer needs. For example, customers who are shopping for organic snacks could buy organic biscuits from you and organic cake from your competitor, as you both sell different types of organic snacks.
Consider your competitor's strengths and weaknesses. Can you improve upon what they do and offer something better? How much is your target audience willing to pay for your type of products or services? Can you undercut your competitor and still make a profit?
Business Plan
Your business plan sets out your objectives and strategies for reaching them. It typically includes things like:
An executive summary of the aims of your business.
Your elevator pitch about what your company does, your target audience and the value it gives.
Your background, training and qualifications.
The products and/or services you offer.
Your market research, including competitor analysis.
Marketing strategy of how to reach your customers.
Operations and logistics.
Explore Government Support and Grants
Once you have a clear strategic plan in place, you can start exploring what financial help is available for your small business. The Gov.UK has a list of available government grants that you might be eligible to apply for. Kate Capelli, the CEO of Adventuress in the Wild, says that she started her business with only £8000 that she inherited from her dad's passing:
"With this, I have managed to grow and sustain the business with little or no help. I have never taken out any loans, and I have no investors or wealthy family to support me. My advice would be to look into what is offered by the government and apply for low-pressure grants. I was awarded a £5,000 grant by the outdoor brand Arc'teryx, which didn't require any proof of how it was being spent, awarding me the time and freedom to excel in the business in the way I felt necessary. Start by offering free or extremely low-cost products. I built trust for one year by running Adventuress in the Wild as a hobby group before charging anything. I was so nervous to post the first paid hike, but the minute it was published, it filled up in minutes."
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Building Networks and Collaboration
Networking is essential regardless of whether you are employed or self-employed, and it's an important part of starting a business; not only will it help to spread the word about your products or services, but it will also create a support system that will support you through the low times and celebrate with you on your wins.
To succeed in creating meaningful connections, you need to have a well-defined plan that outlines the type of connections you want to make and a clear strategy for reaching them. Entrepreneurs use networks to build bridges across weak ties to broaden contacts and acquire, exchange knowledge and grow their businesses.
The key with networks is to remember that the more you give in networking, the more you gain. Focus on what you can do to help others. Building relationships and not just numbers is essential to growing your networks. That way, you can form strategic and collaborative partnerships. Perry Zheng, the founder and CEO of Pallas tells us that his top tip is:
"To harness the power of collaborative partnerships. Identify complementary businesses or individuals within your niche and explore mutually beneficial collaborations. Whether it's co-hosting events, sharing resources, or cross-promoting products or services, collaborative efforts can significantly amplify your reach without a hefty financial investment. This strategy not only expands your audience but also introduces your brand to potential customers organically. Leveraging collective strengths fosters innovation and resilience in a competitive landscape. By forming strategic alliances, you tap into a network that goes beyond monetary constraints, laying a foundation for sustained growth and establishing your business as a dynamic and resourceful player in the market."
You can also consider building a referral network. A referral network is a group of people who actively promote or recommend your company's products or services and bring you leads. By establishing a referral network, you can expand your reach and generate more customer leads. If you feel really bold, you could even start your own referral network, or there are B2B companies that host networking events online and help you make those essential connections. The majority allow you to attend once without paying, so even if it's not from you, you'll still walk away with a few new contacts who can spread the word about your brand.
Leverage Community-Driven Growth
Community-driven growth requires the active participation of community members whose feedback shapes the development of startups. In empowering a community to have control in shaping the development of a product or service, you can create a greater sense of ownership and accountability and a shared purpose that can help you overcome challenges and turn any crisis into growth learning opportunities. These stakeholder relationships and insights, when nurtured well, can be fundamental in helping a startup survive.
Bruno Gavino, Founder and CEO of CodeDesign says:
"For a small business, this translates into identifying and nurturing a community passionate about the niche your business is in. By involving your community in the development of your products or services, you can significantly reduce initial costs. This can be done through beta testing, crowdsourcing ideas, or incorporating user-generated content. Such engagement not only aids in refining your offering but also builds a dedicated customer base even before the official launch. This strategy turns limited funds into an opportunity to create a business that is deeply connected with its audience from the outset."
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Build Online Brand Awareness
Once your business is established, you'll need to build brand awareness and a strong online presence. Your social profiles on various platforms, such as Facebook, LinkedIn, and others, play a crucial role in building your brand identity, reputation, and authenticity. Therefore, take your time and curate strong social profiles that support your brand's voice and goals and are aimed at your targeted audience. Tools like Canva can help you easily create and design eye-catching posts that are aligned with brand voice and colours.
Alex Stasiak, the CEO and Founder of Startup House advises on outsourcing and tells us to leverage the power of social media.
"In today's tech-savvy era, there are countless opportunities to establish and grow a business without breaking the bank. Firstly, focus on building a strong online presence through social media platforms and a well-designed website. Engage with your target audience, share valuable content, and create a community around your brand. Secondly, tap into the gig economy by outsourcing tasks to freelancers or utilizing platforms like Fiverr and Upwork. This way, you can access affordable talent and only pay for what you need. Remember, creativity and resourcefulness are key when starting a business with limited funds, so think outside the box and embrace the digital revolution."
Position Yourself as an Expert
By positioning yourself as an expert in your field or niche, you can gain greater trust for yourself and your brand and increase your revenue. Ways to do this include getting press and media coverage, becoming a top voice on LinkedIn, tapping into other people's audiences by guest writing or contributing to articles, being a guest on podcasts, or even starting your own podcast!
Lastly, Consider Having an Exit Strategy
Having a business exit strategy may seem a little premature, but having one helps you define your long-term business goals and helps ensure a smoother transition when the time does come to expand or move on. When you set off on a car journey, you most likely have a final destination in mind, as opposed to driving around aimlessly, and that's exactly what an exit strategy is. It's not just about the exit. It's about establishing your broader long-term work and life objectives.
Are you seeking creative fulfilment or financial independence? Perhaps your goal is to sell your business to pay off a substantial mortgage and live rent-free. Having an exit strategy shows investors you have a long-term vision of financial growth and allows you to form a plan for selling the business at a time that's right for you, both personally and professionally.
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