What to consider when starting a business post-COVID
With many industries struggling as a result of the lockdowns and the changes in spending habits of customers during the course of the pandemic, many people are looking at the option of going it alone. Whether taking an existing skill and going freelance, upskilling for a change in direction, or branching out from employment because you have found a new niche market, there are a whole new generation of business start-ups in the making. We explore what to consider when starting a business to give you the best chance at success.
Is there a demand?
It sounds like an obvious question, but even many large businesses fall into this trap. Having a great idea is one thing, but if nobody outside of your immediate circle wants to buy your product or service, it will be a short-lived enterprise.
One of the first things to consider when starting a business is what kind of demand there will be for your offering. Do some market research; choose the right channel for your prospective customers and ask questions. If you’re looking at a B2C online business, get on Facebook, Instagram and Twitter, or If it’s a B2B business, use LinkedIn, join a networking group and start making connections. Now, more than ever before, there is a sense of community among small businesses and you will find that people are honest, and will be generous with their advice and their time if you find the right group.
What is your niche?
If you are planning to start a puppuccino van in your local dog park where there is a flow of cash-rich dog owners passing through all day looking for a treat for their pampered pooch, well then you can probably say you’ve found your niche. If you’re looking to become one of many providing a service like graphic design, marketing or accountancy, you probably need to think more carefully.
What makes you stand out from the others? What expertise do you have that they don’t? The smaller your target market and the more specific your expertise, the more likely you are to gain traction.
How will you market your business?
When we think about what to consider when starting a business post-COVID, we need to carefully consider what that means in terms of timescale. General consensus is that COVID will not disappear overnight. Instead it is more likely that restrictions will be gradually lifted and the virus may well be with us for a long time to come. This means that digital marketing will remain critical.
If you have time available to you whilst we’re still in lockdown, use it to learn about marketing. Find out which channels your customers use, where they hang out both virtually and physically – and learn how to use the tools to advertise to them within that sphere. Think about the type of business name, communication style and adverts that might appeal to them. Get right under their skin so that when you are ready to launch, you know how to attract the right people to buy your product.
Do you have the right skills and resources?
Find out what skills you need that you don’t currently have; anything from food hygiene qualifications to health and safety, website design, sales skills and accounting are all things you might have to touch on at some point. You don’t have to become an expert in everything – you can outsource all of the above to other experts who will help you, but keep in mind that their expertise comes at a cost. One of the great things that COVID has produced is a huge amount of online information and learning, much of which is free to access.
Will you need to employ someone? Depending on the type of business you start, you might be able to partner up with other freelancers, who may be more expensive by the hour than an employee but you can afford to use them only as and when you need them. If you do need to employ, start putting feelers out in the market to find the best talent so that interested parties are primed and ready when you need them.
How will you get paid?
Your customers will need to pay you for your time or products. If you are providing a service to other businesses then you will need to invoice them in order to receive payment. With HMRC’s requirement for all businesses’ finances to be digital, you will need to use software for this, which means finding a software package within your budget and capabilities.
If you are planning to be a sole trader or a very small business, then one of the basic packages from a cloud-based accounting solution like Xero would be ideal. If your business needs are more complex, it may be worth consulting an accountancy services provider to help with the set up and ongoing demands.
Don’t leave this part of the business process until you need to bill someone – get yourself organised from the outset and it will make the whole process run smoothly, allowing you to really relish that joy at raising your first invoice.
If you will be working with the general public and selling goods or services in person, COVID has seen the development of some great contactless solutions for small businesses. Companies such as iZettle have released basic card readers that integrate with Xero for a seamless and user-friendly way to take payments safely.
Do you need capital?
If you need cashflow or investment from the outset then consider crowd funding schemes or investors. There is cash in the economy at the moment but one of the problems is that people with excess funds are limited on where they can spend it thanks to lockdown, meaning there is a huge opportunity for them to invest in you. Alternatively, there are a number of bank loans, grants and schemes in place to help new and small businesses.
What to consider when starting a business
When you start to think about what to consider when starting a business you may initially feel overwhelmed, but make a plan, set yourself small goals and start doing some research. If you approach your business in bite-sized chunks and you really believe in yourself you will make it happen just like every other business owner has done since trading began. If you need any help or advice with accounting options including cloud accounting software, why not talk to us on 01704 546000 or email [email protected].