Amidst this challenging economic landscape, a new breed of everyday entrepreneur has emerged, expanding the UK’s vibrant microbusiness community. Our Venture Forward data found the percentage of start-up owners aged under 35 has more than doubled since March 2020, with increasing representation for women and ethnic minority groups. These businesses are the engine of the UK economy, particularly in providing value to disadvantaged communities, and their continued success will be vital in weathering a possible recession.
Having run my own small business, I know that the first year of business can often be the most difficult – but it’s important to get it right. For those just starting out, there are some simple steps you can take to maximise your chances of success. From having solid foundations, to keeping track of changing consumer demands, and seeking support from the business community, these tips should stand you in good stead.
Lay the foundations
Though it may sound obvious, a successful business is always started on solid foundations. Taking the time to develop a thorough business plan with a clear marketing strategy is essential for any new business. This entails having a comprehensive understanding of the target customer base, clarity on how to achieve profitability and validated proof of concept. In doing so, entrepreneurs put themselves in an advantageous position to capitalise on growth opportunities and respond to issues that inevitably arise in their business’s inception. Initial excitement can make it tempting to dive right into doing business, but taking some extra time to consolidate the foundations pays off in the long run.
Work towards clear targets
Setting clear targets is a powerful tool for assessing the extent to which these foundational elements are contributing to the business’s success. Additionally, well-defined goals enable business owners to ensure that they remain focussed on achieving these objectives and can more readily identify areas for improvement.
GoDaddy customer Cleo Morris, 28, from Birmingham, set up Mission Diverse in October 2020 to connect minority and under-represented communities with companies through entrepreneurship and employability training, education, and mentoring. So far it has trained 63 entrepreneurs, but Cleo has a clear aim of training 1,000 over the next five years. This has helped her to clearly communicate Mission Diverse’s goal to potential partners and investors, while also giving herself a sense of purpose and ambition.
Connect with consumers
With the foundations in place, developing a professional online presence is a must for any business. Consumer behaviour has shifted, and they no longer go online to simply place orders. They want to hear about the story behind a brand and learn more about the products they purchase, especially when choosing to shop with a small independent retailer.
As they become savvier to the risk of online scams and fraud, they’re becoming distrustful of businesses with a weak or no online presence. That’s why it’s vital to establish a professional, convenient website from the outset. Your online shop is your virtual shop window, and it needs to be as compelling as possible.
Another growing consideration for consumers is the environmental impact of the products they purchase. By having well-communicated green credentials in place, businesses put themself in an advantageous position for differentiating themselves from their often larger competitors. Consumers want to support businesses that are playing their part in the fight against climate change and can be willing to pay a premium to do so. Whilst more established businesses can be held back by their corporate structures, new microbusinesses can embed sustainable practices from their inception. In doing so, they open themselves up to a broader customer base and further streams of revenue.
Join the community
Finally, networking is an essential activity for any new business owner. Through forging connections with other local or like-minded businesses, entrepreneurs can open themselves up to new opportunities or collaboration with other brands. We’ve found the UK microbusiness community to be incredibly close-knit, with business owners often looking to support and share best practice tips with their peers. It’s also worth establishing ties with older, more established businesses.
Given the current economic climate, those who navigated the 2008 financial crash are well positioned to offer advice on how to navigate a possible recession. Crucially, whoever you’re meeting, make sure you’re easy to remember. A professional email address that includes your business or full name is a good place to start, as is a branded domain name.
The risks and challenges that businesses face in their first year will no doubt be exacerbated by a likely recession, but by adhering to these principles entrepreneurs put themselves in an advantageous position.