Entrepreneurial spirit is strong in universities. Some of the greatest business success stories come from students. This is an encouraging sign for the future of UK business. This is why Innovate UK have put together a few essential tips that’ll ensure your startup is given the best chance of success. So whether you’re bringing your idea to market while you study or simply building a plan for when you graduate, here’s some essential advice.
Evaluate Your Idea Objectively
You need to have at least one strong USP which you can leverage against the competition. If you can’t find a unique selling point, it’s time to re-think your business idea. When considering this, you can’t rely on friends or family. You need an entirely impartial and unbiased evaluation of your concept.
Track down some target consumers, tell them about your product or service and get some honest feedback. A free trial is a great way of enticing people to take part in this early stage market research. Be wary that people are generally nice so may want to ‘sugar coat’ their feedback. If you’re still struggling with this, ask yourself the following questions:
- Are you offering something useful?
- Does it satisfy a need?
- Are you solving a real problem?
- What’s in it for your customers?
- Will someone pay for it?
- Are you passionate about it?
- Why would anyone else care?
Research Your Opportunity
Doing full and thorough research is imperative. If you don’t you’re dooming your concept to failure. Market size, audience, competitors, costs and price points are all important areas that need covering. If you’re finding it tough to settle on what’s important, ask yourself these question:
- What’s the size of your niche market? Will it deliver a return?
- Is the sector in growth or decline?
- What are your competitors doing? What can you do better?
- Are there any indirect competitors you should consider?
- How much is it going to cost? What are the development, operation and go-to-market costs?
- What are your realistic price points? How does this compare to your costs?
- What is the demographic of your audience?
Assemble a Great Team
Everything starts with an idea but there comes a time when you need to take action. One of the most critical aspects of building a successful business is the team that’ll help implement your plan. You need to think about what employment structure to put into place. Are you looking for a co-founder, employees or freelance workers? Outsourcing jobs to an agency is another potential route.
It’s important to consider the passion and drive of employees as well as their qualifications and experience. You need to be able to rely on the people you bring in at such an early stage. Additionally, it’s worth remembering that investors normally buy into the team more than the concept so be sure to get this right.
Create a Financial Plan
Half of all startups fail within the first five years. The leading reason for this failure is a lack of money. Building a long term financial plan allows you to forecast the future of your business and avoid nasty surprises. Consider the following:
- How long will your initial cash last?
- When will you need your first round of investment?
- When are you going to start making revenue?
- Are there any gaps in your finances?
- Are your predictions realistic?
- What are your competitor’s finances like?
- What are your production and staffing costs?
- How much do you need to charge for your product/service?
- Is this price point competitive?
- What are your margins?
- Can you get customers to come back?
Remember, there’s a very clear difference between revenue and profit. Confusing the two is a lethal mistake. Don’t force a business to market if the finances simply don’t add up.
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