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Top tips to starting your own business in London

31st Oct 16 10:01 am

Want to know how to run your very own business?

Running your own business may seem like a far-fetched dream, but the difference between a great business idea and running a profitable start-up lies in having a clear and realistic strategy and business plan. And with the right support and encouragement it might not be as daunting as it first seems. Teaming this with drive and ambition to boot is the real secret to launching a successful venture, and more importantly, making it last.

Since we launched in 2012, we’ve lent over £65 million to businesses in London. Our Government-backed programme has helped support more than 40,000 business ideas across the country, which has helped over 17,000 people who were formerly unemployed or economically inactive in the UK.

1. Go with your gut

Starting out alone is going to be daunting. Often the security of employed work makes the prospect of starting without that safety net seem almost impossible. It’s completely natural for prospective business owners to experience self-doubt, especially in the initial stages of starting up.

If you begin to question your motives and intentions, remind yourself of the reasons you decided to take the leap in the first place. Perhaps you’re passionate about a potential product, or maybe you want greater control over your work-life balance. Whatever the reason, reminding yourself of it will help when the going gets tough.

2. Ask for help

Support is the key to any successful business – you’ll need plenty of it at the start. And it can come in many different forms. Ensure you have a close-knit network of friends and family you trust to not only bounce ideas off, but to give you sound, honest advice.

3. Network, network, network

Make sure you do what you can to network with the right people from day one. Whether it’s building a good relationship with a lender, or even asking for a second opinion on your market strategy – help is out there, use it.

Online event search engines are a fantastic tool to find out what is going on in London – Event Brite has a list of categories to choose from, and many of the events are free.

4. Know your market

Background research is an essential part of breaking into any market. For any prospective business, regardless of sector, it’s essential to get ahead of the game by knowing the market you plan to operate in inside out. That’s means rigorously researching.

Luckily, thanks to the power of the internet much of what you’ll need is at your fingertips, but don’t be afraid to go out and speak to potential customers your local area. If you’re setting up a hair salon for example, canvass the local area and find out what Londoners would like to see from a new hairdresser. Don’t forget to keep doing this once the business has launched either. As you start to grow, you should constantly revaluate the market to help direct your future plans – it’s a constant work-in-progress.

The importance of social media should not be underestimated either, as for many, it’s the gateway to what your customers are saying. You can observe trends and get instant feedback on issues relevant to your market in real time 24/7.

5. Learn from the competition

Part of understanding your market is knowing what you’re up against It’s important to be aware of what your competitors are doing, whether that’s price point, promotional activity, new products or innovation. This is particularly true in London, since the sheer volume of businesses within any given sector is likely to create more competition.

Test out what your soon-to-be competitors are offering, and decide what you think does and doesn’t work – and where there might be a gap in the market. Then, take that insight and use it to inform your strategy – it can really help make sure you are pitching your business above the current benchmark.

6. Ensure your finances are in order

Cash is king in any business. Without detailed financial planning your business will fall at the first hurdle. Ensure you have a healthy cash flow and plenty provisions for any unforeseen setbacks. This is paramount in the early stages.

There are many resources available to provide initial cash injections for start-up businesses. Exploring your options means you can find a funding source which is best tailored to your business needs, whether it’s a bank loan, support from friends and family, or tapping into alternative finance providers like the Start Up Loans Company, who offer low-interest finance alongside mentoring support for would-be business owners.

7. Get clued up on marketing

You can have the best product or service in the world, but if nobody knows about it then you aren’t going to make any money – you need to market your business effectively. You should consider the different marketing channels and establish which one work best for your business, or perhaps use a combination of marketing tools – whether it’s holding promotional events, public relations activity or advertising campaigns.

If you know somebody who works in this field get them to help you out at the start, or speak to London-based colleges and universities about offering a marketing internship to a student studying this subject. If you’re not an expert, get help from someone who is. The Capital is abound with a range of experts who can help, so make the most of it.

8. Listen to your customers

Understanding your client-base is essential to the success of any business. To understand how to market a product or service, you need to understand the client-base for it to be well-received.

At the very early stages listen to your customers closely, ask lots of questions, and adapt your products and services accordingly. Review your customer feedback and build on it. And most importantly, challenge yourself to go beyond customer’s expectations. You will start with zero brand loyalty, and it’s your responsibility to build this up from scratch.

9. Be resilient

Of course, there will be occasions where your ideas will face criticism, especially in the early stages. Use these moments to your advantage to develop and improve.

10. And finally, don’t give up…

Tim Sawyer is the CEO of the Start Up Loans Company

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