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Test-Running A New Business Idea

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StrategyDriven Entrepreneurship Article
Photo courtesy of Max Pixel

Having a new business idea can be exciting, but before pouring all your time and money into it you should first test it out to see what it’s like in practice. A test run will establish any improvements that may need to be made to your business model, as well as providing essential audience research and feedback that you can then use to more effectively market your business. Here are just a few ways to give your product the best trial run possible.

Build a proto-type/test service

You don’t have to produce a full working business model just yet. Testing out the fundamentals is the most important part. If you’re thinking of starting a cake shop, try renting a stall out first for a day and sell your produce from there. If you’re selling a physical product, find a prototype manufacturer such as this sheet metal fabrication business that can produce a cheap and quick prototype. If you’re producing software, create a basic alpha version for testers to use.

Start marketing early

It’s okay to start marketing your product before it actually exists. By telling people that you’re ‘coming soon’ you can build up excitement that will help when you launch your business for real. Set up a website and social media pages and invite people to check them out. You should be able to get an idea of the demand for your product by how people react.

Use your close network

Family and friends can be useful to use when testing your business. They may be able to help you run a stall at a trade fair, preventing the need to think about hiring staff just yet. They may be able to act as a first client, allowing you to test your service out on them and get feedback. They can also help to spread news of your business idea via word of mouth.

Use a focus group of strangers

When it comes to constructive feedback, friends and family may not always offer the brutally honest criticism that you need. Organising a focus group of strangers and pitching your idea to them can be a way of seeing how your business idea will really get on in the market. Positive feedback can be used to help promote your business idea, whilst negative feedback can be used to tweak your business idea and make improvements.

Offer freebies

Don’t be too concerned about making money just yet – you’re still improving your business model. Right now you’re looking to simply test your business idea on as many people as possible, so entice them in by offering your services for free. If you’re hoping to start a restaurant, give people free tasters of your food. If you’re hoping to provide a fitness coaching service, offer people the chance of trial lessons. People are more likely to give constructive and friendly advice if you’re not asking money from them. Don’t be afraid to survey people after about how much they would pay for your service.

How to Prepare the Launch of Your First Ecommerce Company

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StrategyDriven Entrepreneurship Article
Photo courtesy of Pixabay

Branding & Company Name

Before you can even think about launching your business you will need to make sure that all your branding is air tight. You will need a solid business name, that makes your company recognisable and that effectively communicates who you are and what you do. You business name, logo and branding will need to be memorable and unique. So make sure you are researching online, beforehand, to make sure that your business name is not already in use and that your branding is not too similar to that of any of your competitors.

You will then need to register that company name and the domain of your site and if you are wanting to do business internationally, or even just outside of your local community, then you will certainly want to consider trademarking your logo and creating a copyright for your business.

Understand Logistics

Ensuring the success of an ecommerce site is not just knowing your website and your products. A huge chunk of your business is going to be logistics, so it’s essential that you get your head around how it all works and that you have all the logistics in place, prepared and ready to go for when the orders start rolling in.

You are going to need to to look into local warehouses and logistical partners. You will need to get all of your inventory sorted and organised and get all the necessary items in place, such as shipping labels, boxes and central Carolina scales. Making sure that everything is ready in the warehouse, that you have a logistics team in place and all your inventory and shipping materials are ready to go, means that you can really hit the ground running when the orders come in.

Employer Identification Number

Once your business and website are registered and you have researched how to properly trademark your new brand you will then need to think about how to get your employment identification number. You will need this number to open a bank account for your business and so that you are able to do all your paperwork, like invoicing and taxes. Every business need an employment identification number, whether you are employing staff or not, so this needs to be in place before you launch your ecommerce site.

Business Permits & Licenses

Another very important task for anyone launching their first ecommerce company is to ensure that all the correct business licenses and permits are properly organised and in place. These may differ depending on the location of your business, therefore you should check with your local city council in order to understand what sort of tax licenses, business licenses and permits you need in order to be legally trading from your home or office address.

Choose the Best Vendors

The bread and butter of any ecommerce site is the products. Therefore you are going to need to make sure that you are working with the best vendors and that your products are of the best possible quality. You will want to be negotiating for the best price and be building solid relationships with the best vendors that you want to go into business with.

Golden Rules for Maintaining a Healthy Cash Flow

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StrategyDriven Entrepreneurship Article
Photo courtesy of Nicholas Youngson of NYPhotographic (Title CC BY-SA 3.0 NY)

You have, no doubt, heard the saying ‘cash is king,’ and it may be cliché, but it is definitely the truth. No business can survive without any cash. It is the fuel that keeps the engine running. This is why all companies, especially SMEs, need to have a strategy in place for maintaining a healthy cash flow and dealing with any potential related problems that may arise.

Have a clear process in place…

Businesses run efficiently when they have clear procedures in place, and this is definitely the case when it comes to maintaining a healthy cash flow. You need to have a straightforward procedure for dealing with invoices and collecting payments. Don’t forget to practice what you preach; you need to send out invoices promptly if you are to be paid on time. How can you demand efficiency if you are not operating efficiently yourself? There are plenty of great tools available today to assist with sending invoices out and tracking them. By automating this part of your business, you can ensure everything runs more smoothly and quickly.

Don’t accept defeat…

One of the worst things you can do is simply assume that there is nothing you can do about late payments. Many business owners assume that it is out of their hands. After all, they cannot literally force the client to pay on time. You need to get rid of this defeatist attitude. No matter what frustrating business problem you are faced with, there is always a solution. Of course, you can improve your internal practices, but if this does not solve anything, there are other options. Working with a cash flow finance company is highly recommended. If you get an indication that a client is not going to pay on time, a finance firm will pay on their behalf. The client will then pay the lender instead.

Do your research beforehand…

It pays to do a bit of research about the customer beforehand. This is especially the case for any substantial orders. Begin by acquiring their credit report. This will give you a good indication as to whether the potential client is someone to trust. If they do not make payments on time, they will have a bad score, and this should be an immediate red flag. You should also find out about the payment practices of the customer. For example, do they pay on an ad-hoc basis? Do they only pay on a certain day per month? By knowing a customer’s payment habits, you can plan more efficiently. The more you know, the stronger your position.

Set an upper limit per customer…

Finally, make sure you set a bespoke upper credit limit for each of your customers. You can use the credit check you obtained to assist you with this. Also, obtain references from other businesses that have traded with them. You need to determine the risk you are exposing your firm to when arranging any type of credit agreement. Once you have set the limit, do not budge.

Leading Your Team One Step At A Time

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If you want to get far in business, one of the primary factors that you can’t afford to ignore is ensuring that your management team are as professional as possible. They are among your most important staff members, and it is vital that you hire people you think will succeed in leading your team in however they need to be led. Of course, there are always certain characteristics which you will need to look out for if you want your team to be led well, and it is worth looking into what those are. Let’s have a look at some of the more important qualities now, so that you can help to lead your teams as well as possible.

StrategyDriven Management and Leadership Article
Photo courtesy of Pexels

Confidence To Lead

People will generally have a much easier time following someone if they appear to have the confidence to lead. This is something that you can’t really overlook when you are thinking of who should lead your teams. You probably don’t want to put in charge someone who is unable to display confidence in front of groups of people. However, it is also true that sometimes less confident people have better ideas. It seems fair to try and draw a balance, and not to immediately dismiss those who might not be strongly confident in comparison to others. Confidence, after all, is something which can be learned, and it is good to give people the chance to prove themselves. Sometimes, you find real gems this way, and it favors your business massively in the long run.

Cool Head In Emergencies

Being prepared for the worst is a good idea in business generally and in leaders in particular. No matter what happens, you need to be able to know that your management team will be able to properly deal with it. It is therefore a good idea to choose managers who appear to have a cool head, and who would continue to do so in an emergency situation. There are all kinds of emergencies which can crop up in business, and preparing for as many of them as possible always puts you in a good stead. You’ll find that your managers are more adept at remaining calm particularly if you have a number of good emergency procedures in place – get business insurance online, have a risk assessment done, coincide with all safety laws. This all helps, and your management will probably appreciate it.

StrategyDriven Management and Leadership Article
Photo courtesy of Pexels

Easygoing Communication

The ability to communicate well with others is always going to be paramount for your management staff. When you can communicate strongly, it means that you are more likely to get things done properly and on time, and it also means that relationships in the working culture can be developed much more easily and fluently. Make sure your managers are all the kind of people that other can talk to easily – this really does make a world of difference when it comes to getting things done on a daily basis, and creating a positive working culture.

Spend Vs Splurge: Can You Afford Not To Invest In These Areas Of Your Business?

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In business, a company owner will often take steps to try and reduce spending, but there are certain areas where cutbacks should be discouraged. Often, it is possible to reduce overheads, but lowering spending could put you at risk. Before you make any budgeting decisions, consider whether you can afford not to invest in these key areas.

Legal advice

Even if you run a very small business, it’s beneficial to have legal experts in your corner. You never know when you may need to make that call and take advantage of expert advice. Running a business isn’t always as simple as sealing deals and selling wares. There are many legal aspects that you have to take into account as a company owner. If you employ people, the last thing you want is a personal injury case brought against you because your office doesn’t comply with health and safety regulations. If you’re launching a new product, you don’t want a rival firm to rip off your idea or customers contacting you complaining about the quality of the item. If issues arise, and you need to investigate insurance fraud, take action against a competitor or find out more about compensating a customer, it’s helpful to have people in the know at the end of the phone. It is sometimes possible to handle your own legal affairs, but cases can be very complex, and if you hire a professional, you’re much more likely to achieve a positive outcome.

StrategyDriven Entrpreneurship Article
Photo courtesy of Pixabay

Accounting

There are few things that are more important than getting to grips with the numbers when it comes to managing a company. If you own a business, you may not have the time or the expertise to manage the books, and if this is the case, it pays to join forces with an accounting firm. If you have no idea what’s going on in your accounts, you may encounter cash flow issues, and your balances may be much lower than anticipated, which could result in missed payments or failure to hit growth targets.

StrategyDriven Entrepreneurship Article
Photo courtesy of Ken Teegardin via flickr

Training

If you manage a team of people, investing in training can help you upskill your employees, promote health and safety and increase productivity. In the short-term, you’ll be parting with cash, but in the long-term, you’ll be adding value. Training enables your employees to develop new skills, which could prevent you from needing to hire additional workers and enable you to diversify the services you offer. Think carefully about the programs you choose for your team, and have a look around at the opportunities that are on offer. Ask your employees what kinds of courses they’d be interested in undertaking, and read some reviews to find the best training providers.

StrategyDriven Entrepreneurship Article
Photo courtesy of All In One Training via flickr

When you run a business, balancing the books is key. While there are some areas where you can save money, it’s wise to invest in legal advice, accounting services, and training. This will enable you to act swiftly if legal issues arise, keep an eye on your books, and upskill your workforce.