Local entrepreneurs form the backbone of British small business. Their companies have a local sphere of influence and draw a customer base from a relatively small geographical area, usually within a distance- or journey-based catchment zone. Whether it’s a locally-owned enterprise or a franchise in a much bigger chain, the men and women running these businesses put in a lot of work to make the business successful.
Many of our most famous brands started as small businesses. In 1939, when Dave Packard and Bill Hewlett invested $538 into their newly-formed company (a coin-toss decided whether it was to be called Packard-Hewlett or Hewlett-Packard), they were using a garage in Palo Alto. Now, the company has assets of well over $100 billion and ships products around the globe.
Identify and Understand Your USP
A USP is a Unique Selling Point. It’s what brings people to your business specifically, and it’s what a huge amount of your trade hinges on. This is true of all businesses, whether it’s a multi-million pound chain, a branch within that chain or a small family-owned shop.
What’s most important to remember is that the business owner doesn’t get to simply “choose” the USP. It’s largely driven by what your customers think of the business and can often only really be influenced by what you do, rather than actually controlled. In the case of a hotel, for example, you could decorate the rooms in a funky and modern way, but that doesn’t become your USP overnight. Nor will any number of technological gimmicks, or the fact that somebody famous once stayed in room 36.
Your customers will be interested in how comfortable the hotel is in terms of accommodation, where it is and how much it costs. How much of the hypothetical pie chart is taken up by each of these factors will vary, but they’re all important parts of working out a hotel’s USP. It’s a similar theme in almost every business, with how “good” the businesses is at doing what it does (how well-stocked the bar is, how tasty the burgers are, how fast the service is) playing off against how convenient the business is and how much it costs to go there. Customer perception counts for more than a blanket comparison to similar businesses in the area.
That’s why learning about the USP of a business relies upon good-quality research, invariably involving customers and clients who will be able to tell you what your USP is. In order to build on your USP, you need to fully understand it.
Produce a Sound Business Plan
Making a business plan is a relatively straightforward stage in the planning of a business. It essentially involves producing a roadmap for your business, incorporating what you want to do, how you’re going to achieve it and how much money you’ll make.
The executive summary should address what need you’re meeting or which problem you’re solving. For a local entrepreneur, this will probably be a simple mission statement (“To provide reliable, short-notice fuel oil deliveries in the villages surrounding Townsville”) followed by an objective or list of objectives (“Reach 75% of the district’s oil-heated homes and 90% of the district’s oil-fired businesses” or “make three 100-gallon deliveries each weekday”).
This should be followed by a description of your USP (see above) and an analysis of your customer base, which will break down your target market in terms of demographic, geographic, economic and social factors.
You will also need to understand your competition before working on your strategic plan (which encompasses marketing and revenue management) and operations plan (which will set out how the business will actually be run). In the case of a local taxi firm, the strategic plan will lay out how much you spend on adverts, where these adverts go and what sort of returns you expect to gain from these adverts. The operations plan, meanwhile, will address how many drivers you need, how many employees will run the phones, where the employees will be recruited from and other practical issues to do with the operation of the business.
Specialist companies such as Christie + Co have experience in setting out financial plans, which are a key part of a business plan whether you’re looking for investors or not. Start-up costs, in-going costs, running costs and projections all go into this category, as well as how much money needs to be raised if the capital is still being sought. This is your opportunity to demonstrate how and when investors will start seeing returns.
Part of the ‘roadmap’ of the business plan is the set of milestones you make for yourself. In the case of the local taxi company, you might set a list of milestones such as these:
Obtain hackney carriage licence
Buy two Ford Mondeos
Hire and train drivers and staff
Select a location
Break even
These milestones will be very different for other businesses, but it’s important to be able to track progress against initial expectations. Each time one of these achievements is attained, or a milestone is ticked off, your business is more likely to succeed.
One important thing to note about the business plan is that it’s allowed to change. If you get new information or fresh ideas, update your business plan to accommodate this progress.
Select Premises Carefully
This is truer for local businesses than for any other type of business, because a lot of trade will depend on the physical presence of the business within a community. A shabby shop front gives a bad impression, while an over-the-top display of neon signs may also deter customers. Furthermore, the geographically-limited nature of a local business means that choosing premises is more dependent on precise and strategic location selection.
It’s a large commitment and will almost always require a lease, purchase or tenancy, so the use of experienced specialist companies can be very helpful. Choosing business premises is a process that requires in-depth knowledge of your customers’ needs and the nature of your products or services, along with your financial manoeuvrability and your geographical commitments.
It’s impossible to future-proof the decision, but your choice needs to be forward-thinking. If you plan to expand in the next 18 months, signing a long tenancy agreement for a small place is unwise. You mustn’t be restricted by your business premises if you can help it. The use of specialist business planners is extremely useful here.
How you obtain business premises leaves a lot of choices, some of which will depend on your finances. Leasehold properties are common, as are tenanted ones, although some very small or very large businesses may choose to purchase property instead. There’s often a huge crossover between business and personal life here, as certain types of commercial premises – such as newsagents and pubs – have living space ‘above the shop’.
Cultivate Support
Everybody knows that businesses need some sort of marketing strategy, but few local entrepreneurs understand that this has to start well before the launch date. Getting your customers interested is a long process, and by ensuring that they’re ready to start making purchases as soon as you open, you’re giving your business the best chance of succeeding from the early stages.
The grand opening should be an event that encompasses as much of the community as possible, even if the business seems small. An event will bring prominence to your brand and is more likely to be remembered than the vague idea of a new business starting up.
Target your customer base with the opening and the pre-launch build up. If you’re starting a fish and chips van, the whole village needs to know that you’re selling a large cod for a special price on the opening Friday night. If your new business is that taxi service mentioned earlier, get local drinkers interested by having a small event at the pub you expect most of your customers to use.
Keep Up Appearances
Having a successful local business comes with a unique set of privileges and responsibilities. You’ll need to maintain an active presence within the community, putting in effort after-hours and building your profile relentlessly.
Connect your business with other positive organizations and events in the area. Sponsor the football team, talk to the local newspaper about unconventional advert strategies, and put a logo on your car.
Maintaining a personal presence within the community can help build trust and accountability. If you provide an excellent product or service, talk about and be proud of your business. In local enterprise, socializing is tantamount to networking – everybody you meet at the pub is a potential customer.
Are You Ready?
If you’ve found a great business idea for your area and want to get it off the ground, professional and experienced organizations can help. By building up a picture of what you want to do, how you want to do it and where you want to go, you strengthen your business case and give others – whether it’s investors, stakeholders or key clients – a reason to believe in your company as much as you do.
Making a business work is easier than it sounds. Essentially, it’s about dissecting one daunting task into hundreds of very small but manageable ones. The planning process lays down the foundations for robust, sustainable and successful local enterprise.
About The Author: Michael Palmer is an Oxford based, business graduate and writer. His writing covers many subjects, including business, marketing, HR, fitness, and football. He works as a business broker for Christie + Co.
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