1. Clear Business Plan:
A well-thought-out business plan serves as the foundation for your small business. It outlines your goals, target market, competition, and strategies for growth. Without a solid plan, you risk operating blindly and making costly mistakes that could hamper your progress. REAL TALK: Sometimes the easiest way to make a business plan is to copy someone else's–and that's okay. For example, if you know you make the best lemonade in the world, you don't really need to lay out your target market, you just need to get selling. You should know in broad strokes what your growth strategy will be: start with a stand, offer to-go jugs, go to a farmers market, open an online store, get into retail, get acquired by Nestle and boom–you're a self-made lemonade scion! Don't get hung up on your plan. Point yourself in a direction and just start right now.
2. Legal and Regulatory Compliance:
Ensuring that your business complies with all applicable laws and regulations is important. Failure to comply can result in fines, penalties, or even legal action. This includes obtaining the necessary licenses, permits, and registrations specific to your industry and location. If you have a little bit of startup capital this is one place where you might want to spend it, but it's not why you might think. Yes, it makes sense to have a professional service like a lawyer or account help you set up the necessary paperwork. That's partly why they exist. The other reason to use them is because lots of other people use them, too, and they can make referrals to you for your new business. PRO TIP: Lawyers and accountants are some of the best-connected people on the planet. You should absolutely use them if you can.
3. Financial Management:
Effective financial management is key to the success of any business. You need to establish a system for tracking income and expenses, creating budgets, and projecting cash flow. Without proper financial management, you may encounter difficulties in meeting your financial obligations or identifying opportunities for growth. Make sure you know your unit economics. If you're selling physical products, know what they cost to make, ship, store and deliver. If you're a service provider selling time for money, make sure you know not just your hourly rate, but your cost of living per hour, too. Since you probably don't want to work 24 hours per day, you need to bring in well over three times your cost per hour to account for taxes and other hits to your net income if you want to work an eight hour day. (Good luck with that, but it'll be fun.)
4. Branding and Marketing Strategy:
Developing a strong brand identity and marketing strategy is essential for standing out in today's competitive marketplace. Failing to establish a recognizable brand and communicate your value proposition can make it challenging to attract customers and differentiate yourself from competitors. Not only do you need a strong brand, you also need to build trust. We touched on this in the Three Goliaths of Small Business Marketing
post which you should definitely go and read (after this one, of course). Trust is one of the hardest things to earn and convey as a small business and particularly as a new business. Small business branding is more than a logo, but it doesn't have to be hard. Consistency is better than complexity every time.
5. Online Presence:
In the digital age, having a robust online presence is non-negotiable. At a minimum, you'll probably want to set up social media profiles, and explore digital marketing channels to reach your target audience. Ignoring the online world will limit your visibility and hinder your growth potential, but you don't need to go all-in on a website when you're starting out. In fact, in many cases you probably don't need a website at all to grow your business. These days, your business can be up and running online in a few minutes with a free email address like Gmail, a few payment options like PayPal or Venmo, and a mobile phone. That's it. That's all you need. There's never been a more exciting time to be a small business owner.
By focusing on these five points, your startup or small business will be well on its way to success. It's also important to remember that these are foundational concepts that will evolve over time. You absolutely should NOT have your entire marketing strategy fleshed out by the time you're ready to sell your first dance session or land your first accounting client. There's plenty you don't know yet, so don't waste time on planning with insufficient data.