Many of us have faced work challenges due to the long-term restrictions implemented as a result of the ongoing Covid-19 pandemic, with unemployment estimated to be at its highest since 2016 at 4.9%.
However, 2020 is estimated to have seen a 12% growth in new businesses compared to the previous year and, according to a study from Growth Intelligence, the pandemic resulted in more than 85,000 online businesses being established during the height of national lockdown last year. The fashion and clothing sector saw the biggest uplift in new e-commerce businesses, with 8,665, followed by manufacturing (7,129) and food and drink retail (4,156).
With the demand for online business set to increase further during the current lockdown, leading business expert, Andres Perez, Director at The University of Law (ULaw) Business School, highlights the five best practices to help get your business venture off to a flying start:
- Identify your point of difference
For any business to be successful the product or service being offered needs to not only appeal to customers, but also offer something unique. Being in direct competition with other brands which may be much better established could prove challenging, so spend time defining what sets you apart from the competition from the start.
Perez adds: “Inspiration to find a gap in the market can often come from looking at your hobbies and passions, to identify if there is something you could provide that is better or varies from what is already available. It is also important to test your idea on potential customers. If you have a food product for example, ask your friends and family for honest feedback before rolling it out to market.”
- Do your consumer research
Once you have established where your business will meet consumer demand, Mr Perez advises it is vital to do your due diligence when analysing the industry you’ll be entering and the customer behaviour within it.
If you have a website, Google Analytics can provide invaluable data on how your audience and customers interact, including what content and products are of the most interest. Other free Google tools, such as Google Search Trends, can give you a good idea of what people are searching for online, which can help to inform content or product development. Making use of social media to discover trends of conversation within a sector will also help you tailor your product or service to have an impact.
- Do what you can on a low budget
The most likely scenario is you’ll be starting a new business project with little to no money, but you can achieve a lot through investing nothing but your own time. The logistics of setting up a business costs just £12iv, whilst designing a basic website in the first instance can be done for free on the likes of WordPress to establish a base of operations for your brand.
Making use of social media is a must in order to network and promote your service or ideas for free and get your brand known and start building your reputation, says Mr Perez. There are endless free learning resources available to help you develop an appropriate strategy, such as Google’s Digital Garage and Moz’s beginner’s guide to social media.
- Design a business plan
Establishing a business plan is invaluable as it will enable you to identify the business’ short- and long-term objectives as well as an outline of how to achieve them. This can include anything from how you intend to promote your product, to investment in growth, and will ensure that anyone who gets involved in the project is on the same page and striving towards the same goal.
Putting together a good business plan is relatively simple and should follow a simple structure. Start with an introduction outlining the key elements and goals of the business, before mapping out the official business model and structure. Once this is established, you should include a review of your product or service and a breakdown of the customer and market you are looking to target, followed by analysis of competitors. Finish off your plan with a clearly defined marketing and sales strategy, followed by a projection of finances to ensure your business is geared up to make a splash.
- Know your obligations
When starting out with your own business, as well as establishing a good product, brand and strategy, it is just as important to make sure all the admin and legal requirements are dealt with. Be sure to register your company on Companies House, provide an appropriate name and address and swat up on what type of business it’ll be, such as a limited company or sole trader.
Once the legalities of your business are finalised, you’ll be required to set up appropriate finances, such as a business account, and be aware of which taxes you’ll be eligible to pay. Calculating the tax you pay can be confusing so keeping a record of all transactions and paperwork will save you a lot of hassle come the end of the financial year.
Andres Perez at ULaw Business School further commented: “Although the pandemic has presented some real challenges, the restrictions have given people time to pursue their own business opportunities online, from the comfort of their homes.
“Establishing a business around a passion is important and we saw a lot of small ventures catering to the needs of those living in a pandemic begin to thrive in 2020, such as quirky food services or those selling hand crafted clothes and jewellery.
“Being able to provide a product or service easily at home is the cornerstone of any successful business set up in lockdown and we hope the advice we’ve provided will inspire many aspiring entrepreneurs to take on a new project whilst living in such tight restrictions.”