Building a Better Business

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With the effects of the global economic meltdown still being felt, budding entrepreneurs could be excused for thinking now is not the time to launch a new business initiative. But this isn't necessarily the case — it all depends on the type of business that you're launching.

A quick look across different industry sectors reveals that not everyone has suffered as a result of the recession. Chocolate sales are doing particularly well, for example, and video games are also enjoying an increase in sales. Greggs — a mass-market fresh bakery chain based in Europe — has been doing exceptionally well during the recession, as people are looking for cheap eats at lunch time rather than going for an expensive sit-down meal.

The point is, the state of the industry you plan to enter should dictate whether you actually set up shop there or not. So before starting your business, take a look at the main industries you'll be working in or with: How are they doing? Have sales been going from strength to strength? By putting in this initial groundwork, you can help minimize the chances of failing; market research should underpin all your decision-making.

The important thing to remember in the early days is that your startup funds are precious, so don't throw money at any old scheme in a vain attempt to drum up business. In fact, try and do as much as you can for free. You'd be surprised at how easy it is to save money by thinking just a little creatively.

Innocent Drinks is a UK-based company that specializes in smoothies. They have almost 75% of the UK smoothie market cornered and have a turnover of almost $200 million USD. So it's safe to say they're a big company now, but in 1999 they were just three guys with an idea to start a smoothie company. They hired a small stall at Glastonbury music festival in England and sold low-cost smoothies. All they asked from their customers was this: If you think we should start this up as a full-time business, throw your cup in the left bin, if you think we're wasting our time, throw it in the right-hand bin.

Needless to say, the left bin was full to the brim and the rest, as they say, is history. The beauty of this scheme was that they spent very little money and got valuable feedback from the very same people who would form their future client base. Any budding entrepreneur can learn a lot from this exercise. You need to engage with your potential customers before you spend a lot of money on a business.

Pay as you go

It's also important that you start small and follow a carefully-managed growth model. (Many businesses fail because they try to grow too much too quickly.) This may mean taking on a lot of the administrative tasks yourself in the early days, but that's a good thing as it means you learn a lot about what it takes to run a business and you can understand the inner workings of your own company.

Of course, you won't be able to do the job of a fully qualified accountant, for example. But that doesn't mean you should employ a full-time accountant, either. Outsourcing certain services is a good way of keeping your costs down so that you only pay for the services of an expert as and when required.

SEO

The internet is the first of call for many consumers, so you'll also need a website to help promote your product or services. However, there's little point launching a company website if nobody can find you on Google, Bing or Yahoo. You need to commit some resources to search engine optimization (SEO) — essentially, the process of ensuring you rank highly on search engines for key search terms that are relevant to your industry.

It's certainly worth getting to grips with the basics of SEO yourself before you consider paying for digital marketing experts. It'll help you understand the importance of online marketing and how much extra business it will secure for you. (For example, the difference between ranking number 1 and number 10 on Google.com for the search term 'car insurance' will be considerable, in terms of the number of visitors clicking through to your website.)

The social web

LinkedIn, Twitter, Facebook, YouTube are all social media platforms you should be embracing to their full capacity. And the beauty is, they're free to use.

The need to maximize your online presence can't be overstated. In fact, many businesses have social media strategies, distinct from other marketing strategies. If you have clients you're on particularly good terms with, connect with them on LinkedIn. Then other business acquaintances of your clients can connect easier with you; it can be a good way of generating new business for very little effort. Also, join group discussions that are relevant to your service offering. Offer advice, mentoring — whatever it takes to build your reputation and business relationships.

Twitter is also a fantastic forum for keeping your finger on the pulse of your industry. You can follow publications, read news, connect with people with similar interests and build your own following through offering insightful updates from your daily business experiences.

Life in cyberspace

It's also worth considering whether you actually need an office in the early days. You can save a lot of money on premises by working from a spare room in your house. These savings can then be passed on to customers, meaning you can undercut your competition and secure new business quickly.

If this is the route you go, you have to know what technology to use to help streamline your business. If you have a few people working from home in your business, you can use the likes of Google Docs to collaborate in real-time, so you can have joint access to the same documents and spreadsheets. And because they're all stored in "the Cloud" (Google's servers), they're safe from any internal system crashes at your end.

You can also use Skype for one-on-one video conferencing and for Skype-to-Skype phone calls — both of which are free.

Go forth and prosper…

By carrying out just a little market research, ensuring your costs are kept to a minimum and understanding the benefits technology can bring you, your chances of building a successful business are greatly increased. Now go forth…and prosper!