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How to start a business: people, customers and competitors

In part 3 of our series on how to start a business, we explore why you need the right people working for you, how to find customers, and why competitor research matters.

Fl428 Blog How To Start A Business 3

So far in our series on how to start a business, we’ve mainly focused on some of the processes and structures behind setting up a company. These practical considerations are essential, but they’ll only get you so far. To run a successful business, you need people, whether it’s staff, customers, or industry connections.

In this third part of our series, we explore why people matter, and how you can identify the right people for business. As well as exploring networking, we also look at how to find the right customers, as well as how to analyse competitors. You can also check out part 1 on evaluating and planning, and part 2 on business structure and registration.


The importance of people and teams

People matter to businesses, whether it’s the partner or partners who help to found it or the staff members responsible for the day-to-day running. Even if you strike out on your own, you’ll still need your network to rely on as you get up and running. 

A good team can drive success, connect with customers, and help market your products or services. Yet finding the right people for your business isn’t always easy. You often need a diverse and reliable team of professionals, as well as the right skills and knowledge to manage them. But where to start?

Finding the right people

The first thing you need to do is find the right person or people to help get your idea off the ground. Of course, this might not apply if you’re just starting as a freelancer or sole-trader. However, as your business grows, you may need to bring more people in. So how do you find the right people for your company? 

The process varies greatly depending on the size, aims, funding, and structure of your business. We could write an entire guide on finding and interviewing people for all kinds of companies, whether partners or staff members. However, to keep things concise, we’ve highlighted some of the main factors to consider when searching for people: 

  • Outline your vision. What is it your company wants to achieve? Having a mission statement can not only help you define what you’re looking for but also make your business a more appealing prospect to potential partners or employees. 
  • Define the skills gaps. What areas do you need help in? There are likely some gaps in your skills and knowledge, and identifying these can help you find the right people to fill them. As we explore in our post on the skills gap, hiring people who can develop with change can help your company grow. 
  • Consider the experience you need. Are you looking for experts in their field? Or is an enthusiastic graduate the right fit? Consider the level of training and experience you need to complement your own.
  • Think about cultural fit. Ideally, you want to find people who share similar values to your company ethos. Qualities like emotional intelligence are useful here, as are collaboration and the right motivation.

Leading a team

When it comes to running a business or startup, having the right team is important. According to some research, having the wrong team is one of the top reasons why startups fail. Yet the right team also needs the right leaders. If you’re learning how to start a business, it’s likely that you will need to fill this leadership role. 

There are many traits that combine to make a good leader. It’s more than just people management, although that certainly helps. To lead a successful team, you’ll often need skills such as: 

  • Communication. You need to be able to explain your ideas, goals, and specific tasks. Whether it’s communicating to an entire team of people or on a one-to-one basis, you need effective communication
  • Decision making. When it comes to leading a team and solving problems, one of the most useful skills is decision making. You’ll need to evaluate situations, assess the resources available, and plan out a solution that works for your business. 
  • Vision. In part 1 of our series, we explored the vision you need to be able to spot an opportunity and make it a reality. This same vision is needed to rally a team around an idea or goal. 
  • Delegation. You can’t do everything by yourself. The ability to effectively delegate work and give feedback on performance is essential. It’s also one of the fundamentals of good project management

You can find out more about leading a team in our free online course, developed by The Open University Business School.

 

Business Networking 

Whatever profession or stage of your career you’re in, networking is essential. It’s so important that we’ve written an entire piece on how to network to improve your career. What’s more, according to some 2016 research from The Economist, 78% of startups said that networking is key to success. 

When you’re learning how to start a business, some strong connections can be invaluable. Your contacts can help give your advice, support, and direction. What’s more, you might find that they’re able to offer referrals, mentorship, and other positive influences.

Basics of how to network

As we’ve already explored the topic in greater detail, we’ll keep things brief here. When starting a business, networking is vital. Here are some of the basics of how to make the most of it: 

  • Prepare. Work in things like your elevator pitch, online profile, business card and listening skills. You want to make a good impression no matter what medium you meet people in. 
  • Know who to meet. You want to network with people who are interested in your current circumstances as well as your potential. Decision-makers, those willing to share experiences, and role models in your industry are great places to start. 
  • Start with your existing network. You probably already have plenty of connections, whether they’re co-workers, friends, or family members. Get the word out that you’re starting a business, and see where your existing network takes you. 
  • Go to the right events. To meet new business connections, you’ll need to go to industry events. COVID-19 is making this difficult right now, but not impossible. Online conferences, networking events, and social media communities are still thriving. 

Ultimately, you want to start building connections with all kinds of people. Make sure you’re prepared to listen and try to form genuine friendships rather than simply convenient contacts.

 

Identifying your target customers

The other important people in your business venture are the customers or clients that you’ll be serving. We already mentioned the research stating that the wrong teams can make a startup fail. At the top of that list of reasons for failure is when there is no market need. It’s therefore vital that you know whether there is a potential customer base for your product or service, as well as whom they are. 

The process of finding the types of people who might be interested in your business can take a lot of refining. And, as your business grows, so might your target audience. However, when you’re working on how to start a business, you need to have at least some ideas. Here are some ways you can do exactly that:

Start broad

Although you eventually want to end up with a relatively narrow audience, you don’t want to start with one. Instead, try and set your focus wider and gradually refine it down. Ideally, you want to start with a few assumptions across a variety of segments. For example, you could base it on a combination of: 

  • Age group
  • Gender 
  • Location
  • Occupation 
  • Income 
  • Education 

Of course, you don’t have to permanently exclude people from any category. However, it helps to eventually have a narrow focus. After all, your marketing budget and scope are likely to be limited when you’re first starting out.

Solve problems

Problem-solving links back to part 1 of our series on how to start a business. When defining your business idea, you should have come up with a creative solution to a problem. You now need to think about the types of people who would benefit from your solution. 

Part of this process is identifying why your product or service is unique. Why would a customer choose your business over another? Again, defining your unique selling point should be part of your planning phase, meaning you now need to apply that to your potential customers.

Use the data

The only way to find out whether your assumptions thus far are correct is to talk to consumers and gather data. Although you might not have access to the vast marketing analytics of an established brand, there are still options available to you. 

Whether it’s one-on-one interviews, broader surveys, or focus groups, you need to find out if and how your target customers are going to respond to your business idea. Doing so also helps you further narrow down who your key demographics are. The more people you’re able to talk to, the more detailed and useful your data is going to be. 

If you already have a website set up, you can use web analytics tools like Google Analytics to gain more detail about your potential customers. Check out our article on an introduction to Google Analytics to find out more.

Create a persona

Before you start planning your marketing activity (covered in the next article on how to start a business), it’s a useful exercise to start creating some customer personas. The segmentation, problem-solving, and customer data activity you carry out should help you fill these out. 

Essentially, these personas work as a template for determining your ideal customers. As well as looking at practical considerations of age, gender, etc., you can also explore the psychological and behavioural reasons why they might choose your business. Consider their motivations, goals, and frustrations. You can then tailor your marketing efforts directly to these ideal customers.

Check out the competition

The chances are, there is already at least one company that’s at least somewhat in competition with you. After all, it’s rare to come up with a totally new product or service. Although your idea is unique, it’ll likely join a wider, established industry. Checking out the competition comes with a variety of benefits: 

  • Unique positioning. Knowing what your competitors do and who their target customers are allows you to spot gaps and opportunities. 
  • Customer insight. You can learn about which types of people tend to use a particular company. With this information, you can keep building your customer personas. 
  • Marketing strategy. By checking out how rival companies market, you can get inspiration on what does and doesn’t work well. This can help you develop your own marketing campaigns. 

You should be able to find out a fair amount of information about your competitors. Explore their product/service range, check out their marketing and content strategy, and see whether they’ve posted any promising results. All of this helps you to find your own niche.

Final thoughts

People are the heart and soul of any business, whether it’s the directors, staff, or customers. No matter how big or small your business is, you need to bear them in mind. It’s likely that you already have a professional network to call on, and this can also play a significant part in your early success. 

When you’re working out how to start a business, focusing on building a team, identifying your customers, and checking out your competitors are all essential. In our next article in the series, we check out how you can effectively market your company.

 


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