Have you ever wondered what it would be like to have your own business? Which product or service would you offer? It may be that you, the reader, have gone one step further and outlined your brand’s name, identity and what would make it unique. But how do you go from there?
This is a far too common question for many new entrepreneurs, as the amount of information and areas of focus surrounding creating a business can be overwhelming and difficult to unravel. If you always wanted to create your own business, but you’re not sure where to begin, this guide is for you.
What is my first task?
Research your idea!
So you had a business idea, but you’re not sure where to take it. In this early stage, it’s important to be sure your idea has potential. After all, there might already be a similar product on the market, or the competition might be too fierce. There can be many obstacles between your idea and success, which is why you shouldn’t rush in this stage. When you are convinced that you have not only a product or a service in your hands, but a solution, then you are ready to write a business plan.
What is a business plan?
A business plan has a company’s objectives and provides guidelines for how to achieve each of its goals. Having a business plan is fundamental for businesses at every stage, but also for new businesses, as it is a good way to keep your business on track while going forward. Ideally, a business plan should be updated regularly to confirm if objectives were met, or it can provide the reasoning for a business to go in another direction. Make sure to include all the basic elements of a traditional business plan:
- An executive summary: a vision & mission statement of the business, along with information about the location, employees, and its operations. When you write this, remember that you will need a broader spectrum of advisors than employees at a later stage. This includes a lawyer, an accountant and an insurance agent.
- An outline of the products and services the company will offer, which may or may not include pricing, product lifespan and benefits to consumers.
- A market analysis and a marketing strategy: an in-depth analysis of the industry the business will be inserted in, along with information on the target customer base. As a part of the strategy, an advertising campaign needs to be outlined.
- Financial planning and budget: new businesses should include here the financial targets, potential investors and the estimated numbers for the first 3-5 years of business. A budget description should include all costs related to keeping the business, such as staff, manufacturing and development. A detailed, step-by-step plan on how to construct your budget and a financial plan will be included in our next guide.
- Another element that is sometimes present in a business plan is the choice of a business structure, or type of company, you wish to have. There are many types of companies you can register for in Denmark, with each having its own tax implications. Read our article “How to Register a Business in Denmark” for all the information you will need to choose the best business structure for you.
In this guide to the new entrepreneur, we will go through the essential elements of a business plan and more, as it is our goal to help you build your successful business.
In which industry is my
It is not only important to know how your product is different from your competitors, but it should also solve a problem or a deficiency in the market. You can verify this by first identifying which industry your company will be inserted in.
You can use social media as a tool for this, as platforms such as LinkedIn allow users to search within the name of an industry you’re pursuing. It is important to remember that there can be other industry terms that you might need to include in your list, as many businesses define themselves in pluralistic ways. A bakery, for instance, might consider itself a vendor of “baked goods” or conduct “cake catering”, or use even other terms.
After you identify your industry, the next step is to identify the specific competitors whose products or services correspond to yours. Market forecast reports can be useful while building your list of competitors, since they identify the leading vendors in their industries.
When you have a list of the main competitors within your industry, it is prudent to know the size of your industry and how the market responds to it. That will provide you with a very good idea if your business plan can flourish.
How is the market
responding to my
A market analysis is the process of examining a particular sector, industry or market through current data in order to project a forecast for your own business. Companies conduct market analyses to understand how their products or services can exist within a particular industry. So, what does this mean?
A market analysis is in essence, a great tool for understanding what you can achieve from your business. It not only helps you understand the size and interplay of your market, but it also gives you insight on new trends and challenges you might face. It can also give you an idea of profits to expect and how to adjust your budget accordingly. There are several ways an in-depth market analysis can be beneficial to your business, and the more regularly you conduct them, the more you can benefit and adapt your business.
The first step in a market analysis is to know your purpose for having one, as this will prescribe the amount of research you will need to do. The next step is to research the state of your industry. Include as much data as possible, such as the projected growth and emerging trends. Next, you need to understand your customers, which we will go in depth in the following section. Finally, the last step is to conduct a SWOT analysis of your biggest competition. This will help you understand why a customer would choose your business over your competitor’s.
How do I identify my
Several marketers conduct a market research to identify the target audience for your business. Market research, in fact, many times involves outlining and asking a specific group for questions that provide valuable insight for your business, such as how well your product or service will do with this audience. Surveys and interviews can inform you on how your product or service will do against your main competitors, and can even provide you knowledge of which challenges you might face.
Though there are in fact two types of market research, not all marketers will need to identify which is the correct one for you, as certain elements in market research can be seen elsewhere. But this is nonetheless an essential tool for the new entrepreneur, and it should be conducted thoroughly.
How do I know my target audience? Start by building your buyer persona. This is a fictionalized representation of your ideal customer, and it often guides the entrepreneur in planning content and campaigns. A buyer persona should include a standard amount of characteristics:
After you built your buying persona, it is important to identify a group of people with those characteristics to engage in your market research. This group should consist of people that recently made a purchase or decided not to make one, which will help you understand their buying habits.
You can find such a group of people by leveraging your own network, calling for participants on social media or even offering a reward. When you have your group of people, and you have already outlined what you want to gain from your market research, make sure to ask them effective open-ended questions, so you have every opportunity to gain from their answers.
How can I market my
Unless your startup has angel or venture capital, your budget is most likely limited towards marketing. However, there are many ways you can still market your business successfully while being on a tight budget, such as: guerrilla marketing, using social media, promoting contests and giveaways and being a reference to your audience.
Smart and small businesses often use guerrilla marketing to compete with bigger companies. This type of marketing can take many shapes or forms, such as creating an original art piece in front of your store or using undercover agents on the street to promote your product.
It is not an understatement that nowadays every company should reserve a portion of its budget for social media marketing, as social platforms become more and more popular every year. However, rather than making your company present in each platform at once, focus and try to master only a few first, as it’s not only important to have a profile, but to create valuable content in your online presence. There are many ways to share information, including your expertise and the value of your company, and this helps your business get free traffic.
There are also many advantages of promoting your product on social media and other online advertising platforms, such as Google Pay Per Click ads and on Facebook, since they can be cheaper than to do so on conventional media.
But remember that one of the most powerful marketing tools is to engage with your audience in a fun way, and that doesn’t need to be expensive. Promoting giveaways and contests is a way to build brand awareness and connect with larger audiences. Physical gifts with your logo are another popular method to do this.
Lastly, you can change the meaning of marketing to many of your customers by making it useful rather than annoying or intrusive. You can educate your audiences on issues your business tackles on a daily basis, and you can provide assistance while answering customer questions on forums or direct them to your website for further information. This has been an increasingly effective tool in increasing sales, as businesses show their audiences they are trustworthy and reliable.
Our guide for the new entrepreneur answered many of the most essential questions the new business owner should be aware of. However, questions on funding, budget, pricing, and how to boost your business during COVID-19 will be answered on our next guide: How to Grow your Business During a Crisis.