6 Commonly Missed Considerations for New Entrepreneurs
With many factors to consider, it’s easy for budding entrepreneurs to overlook certain key considerations that could impact the success of their venture. Being aware of these commonly missed factors from the outset can help entrepreneurs avoid potential pitfalls and get their business off to a strong start. Below, we will outline six key considerations that new entrepreneurs in the UK often overlook.
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1. Hiring Employees
One of the first major challenges for new businesses is recruiting suitable employees. It’s tempting to rush hiring just to get up and running quickly. However, taking time to find candidates with the right skills, experience, and cultural fit is key. Don’t compromise on hiring just to fill an urgent vacancy, as unsuitable employees can create bigger problems later if they lack the necessary abilities. Thoroughly vet each candidate through their CV, interviews and references. Be cautious of applicants who have not presented their experience properly in their CV, even though free CV templates are available online. This could indicate a lack of effort or care in preparation. Finding the right hires takes patience and effort, especially for early-stage companies lacking brand recognition. Leverage your networks, contacts and online platforms to source promising applicants. Stay selective throughout to build a strong team that will set your new venture up for success.
2. Managing Cash Flow
Careful cash flow management is critical for any new business. Having sufficient working capital is essential in the early stages to cover ongoing operating costs and expenses. Many entrepreneurs fail to estimate their cash flow needs accurately and are caught short. Create detailed financial projections, allow for contingencies and have a cash reserve to tap into. Avoid splashing out on unnecessary large purchases in the first year. Consider lease or finance options for any required equipment/vehicles rather than buying outright. With income unpredictable in the early days, diligent cash flow control and access to working capital give your business the best chance of survival.
3. Pricing Strategies
Setting optimal prices is tricky for new businesses. If too low, profit margins get squeezed unsustainably. If too high, new companies can price themselves out of contention. Extensive competitor research is vital to finding the sweet spot between affordability and viability. Don’t assume undercutting established players on price is the best approach. Consider offering value through other means, e.g. superior product/service quality or user experience. Dynamic pricing and targeted promotions may help acquire customers initially. However, ensure this is part of a sustainable long-term pricing strategy optimised for when your new business hits its stride.
4. Legal Compliance
Keeping on top of legal and regulatory compliance matters may not be glamorous, but it’s vital. New businesses often underestimate the complexity of the legal landscape. Key areas include health and safety policies, employment law, premise leases, insurance, contracts, intellectual property, data protection and financial/tax obligations. Failure to comply could have serious consequences, such as lawsuits or fines down the line. Allocating sufficient time and budget to get the right legal foundations in place from the start avoids much pain later. Make use of professional advisors to ensure you meet all compliance responsibilities relevant to your industry and location.
5. Marketing Strategy
Having an effective marketing strategy is essential for any new business to gain traction. But often budget constraints lead entrepreneurs to take a scattergun approach without clear goals. Prioritise building your brand and raising awareness through low-cost channels first e.g. social media, SEO, networking events. Don’t forget to set up a professional-looking website to anchor your online presence. Where possible, leverage your own networks and contacts for referrals and introductions. As capabilities grow, carefully select higher cost/impact marketing like targeted online/offline ads, sponsorships and resellers. Avoid overextending limited resources on untargeted marketing. Focus on channels that reach potential customers cost-efficiently and build engagement.
6. Business Partnerships
Deciding whether to start your business alone or with partners is an important choice. Having co-founders can spread the workload and combine complementary skills. However, business partnerships also bring the potential for disagreements and complicate decision-making if not structured correctly. If pursuing a partnership, ensure you partner with people you trust deeply and share core values with. Define clear roles and responsibilities between founders in a partnership agreement. Also, agree on processes upfront for conflict resolution, major decisions, profit/loss sharing, exits, etc. Map out a shared long-term vision and measurable milestones. Formalising the partnership early provides a strong foundation. Going solo means full autonomy but also total accountability. Evaluate your own abilities realistically before deciding. Starting a business with partners can accelerate success but requires rapport, alignment and clear structures to enable it.
Starting a new business is a tough yet rewarding experience if done right. Avoiding common pitfalls such as the ones outlined here will help budding UK entrepreneurs set their new ventures up for success.