Over the years we've helped several businesses launch with great success. Here are our suggestions for a "best practice" list, but of course there are many more!
1. Start with a Business Plan
SCORE provides low-cost, high-value classes to help business start with a business plan. This is your financial and structural blueprint. The high rate of business failures are mostly due to folks skipping this step. At the very least, talk to the most skeptical person you know about your business idea and let them shoot holes in it.
2. Start with a Realistic Marketing Budget
With your business plan in place, be clear on how much marketing really costs. A small direct mailer can cost $5000. Decide what mediums are relevant to you, where your customers tune in, how you can get them to take action. Who will you hire, and how much time it will take? Many decisions to be made here.
3. Put Your Clothes On: Brand, Brand, Brand!
Branding your new business with professional quality graphics, stationery and website is the equivalent of being dressed up for your public. Too many small businesses skimp in this area and meet their best prospects dressed up in their bathrobe and slippers.
When a new business starts out, the first swell of business is referrals from friends and family who know you and care about your business succeeding. It's the worst possible moment to put your worst foot forward. These items are not luxuries, they are essentials.
4. Market Upstream and Downstream
Intuitively we always reach toward the audience for our business' growth; this is classic downstream marketing. This is a typical and traditional way to make sales. However, sometimes it's beneficial to look at who is upstream of your business and can with proper planning can make excellent long-term business partners. You can read more about upstream marketing from John Rodolff, President of Venture Builder, Inc. a consultant business growth development. We developed a customized program for Green Bird Media clients that costs $1000 which is a 20% less than their normal fee.
5. Wear the Hats that Make Sense
One of the hardest lessons to teach startups is the concept that their time is exceptionally valuable, worth about $200* an hour. Even in the early days of a new business, it's tempting to wear all the hats: accounting, website maintenance, legal, etc. What the new owners often don't recognize they are cannibalizing their time from true business growth to busy work.
For instance, if you own a restaurant, washing dishes is essential yet this task is often quickly farmed out because it's the cooking that earns the money and reputation. That's easy to see, less so with say accounting. A person might say that they are "saving money" because they can purchase TurboTax, purchase Quicken and with an investment of 5 hours a month, do their own accounting. Except that at $200 an hour that is $1000 a month AND there is the LOSS of 5 hours of marketing. There is a trade in time from true business growth to busy work. A good bookkeeper would have only cost about $100 since they are faster, more competent and knowledgeable.
*To earn $100k a year, a business owner can think about earning about $200 an hour.
Only about half an owners' time is billable, half go to taxes and 25% is overhead. Of course every business is different, this is just for an example. It's a good exercise to figure out what your time is really worth!