Starting a new business

No time like the present

So we are now into 2025 and there are a plethora of tools to help start, build and develop a new business.

There’s a saying when it comes to fruit trees (I know, but bear with me :) ). When planting a fruit tree it takes around 3 years for said tree to start bearing fruit. So the saying goes “The best time to plant a fruit tree is 10 years ago, the next best time is now”. The idea being that a well-established fruit tree will provide a bountiful crop, and if you don’t have a fruit tree then get on and plant one, the sooner you do the sooner you will get to a full crop. I consider this the same for business, or a new venture.

There are many things that impede an individual’s decision to start a business. Some of these include, but not limited to: Financial constraints (lack of funding), knowledge and skills gaps, psychological barriers (fear of failure, work/life balance, family obligations, etc.), competition and alternatives, and others, however these are generally the top categories of obstacles that impede potential entrepreneurs. Although there is a significant one!

The fear of failure and reducing threat

The greatest impediment to starting a business is fear: fear of failure, fear of looking foolish, fear of failing to support our families if things go south, etc.

Some businesses require a lot of resources to start, some require very little money but significant time and effort. The business you start will be dependent on the resources you have available, or can gain access to.

The fear comes from spending all these resources only for the enterprise to fail and lose all those resources for nothing.

So the question then becomes, how do we reduce the threat of losing valuable resources while still validating an idea?

Well, good news. There are industry standard practices that are used by well-established entrepreneurs and business developer we can co-opt and follow these for our own needs.

The purpose of validation

Depending on the context of your business idea there a numerous way to validate the idea as a viable business, viable business being the operative term.

It is important to, not only, consider the product/service that will be offered, but consider how we intend to implement the business model to support the delivery of the develop idea and if the business can generate the required cash in order to support the goals of the business.

Let’s apply this a baseness idea: a fast food franchise.

The long-term goals of the fast food franchise business is to make the prospects of running a franchise financially attractive to potential franchisees and to grow the operation to dozens, if not hundreds or thousands of locations. To validate we could locate a suitable property lease and negotiate terms, fit out the premises with expensive equipment, train staff and advertise like a mofo and hope people will come.

This would be expensive and we would still have not validated customer demand, refined product/service offering, or identified the optimal price point.

Alternatively we could first experiment with recipes in our own or rented facilities and gain feedback from friends, family and any acquaintances you are willing to approach, which is much cheaper. Then, once we are happy with the recipes we could continue on to the next stage, maybe rent a stall at an event or rent out a food truck. This would allow us to identify possible price point to customer fit issues. Once we are happy at this stage then we establish and formalise a company structure to run the administration of the company and use the evidence we have acquired in the previous validation stages to generate funding in the form of bank loans and investments into the company and thereby reducing our own personal financial rick while also providing a level of confidence to our investors that show a demand and future potential of the endeavour.

From here we can refine the operational process and streamline production to a point where daily activities can be codified into operational process manuals. At his point we can develop the financial results into a proposal brief for potential franchisees to showcase how our solution can help then generate an income and other attractive components of our offering. Here we change the focus of our product/service offering from a product to customer, as in fast food to consumers, but to a business to business offering as a business service as a package to other business owners and operators. This would require an additional validation, price point analysis and also different methods to showcase and market our offerings: business listings, showcase/franchise events, etc.

Each stage is relatively inexpensive, from a risk perspective, allows our offering and processes to be refined and optimised as well as providing the opportunity to exit at the end of each stage while minimising financial loss. Once we get to the food truck stage we have something that shows potential as a valid possibility to re-sell to a competitor for recuperation of any funding we have already invested, we could also make a profit at this point.

There are many reasons why we may decide to exit at any stage: the financial return is not enough, we could find that there is more competition in the area than we had anticipated, we don’t have the resources to fully capitalize on the opportunity, or we may decide that this is just not for us or there may be conflict between the founders and those managing and working on the daily operations.

All these reasons are valid and it is up to you to decide whether an idea is worth pursuing. What is important is that we need not jump straight in without foundational information and can take a staged approach, which can help with validation, refinement and evidence for justifying funding.

What if we have a business where we can sell non-perishable products or jewlery, watches, baseball caps, art supplies, etc. etc. etc.

Depending on the context or nature of the product we want to sell we can validate in a number of ways.

Validating with user buy-in

Method #1         -              The email newsletter

Validating with user buy-in means we ask our potential customers for something of low or minimal value. There are a number of ways to do this, by far, my favourite is the old email capture and weekly/monthly newsletter. This might seem simple but if done right it is a multifaceted technique for building a community around your brand and easy access to willing buyers. By providing an email signup component on your website you provide your site visitors the opportunity to hand over something of small but meaningful value, personal access.

They take the time to give YOU personal access to them.

They are willingly becoming part of your community so they can interact and learn more about what you do. In doing so, they are giving something of value and showing interest in what you do and what you stand for. Great, by signing up it shows a level or respect and trust which you can then capitalise on to provide further value and bring them further into your community fold.

Having an email list does two things: makes people feel part of your community, we are all tribal in some form or fashion and the feeling of belonging is powerful, and gives direct access for further delivery of your brand message (via newsletters) and to sell directly. Newsletters and other messaging reinforce your brand message by providing insight into what you’re doing, your story, and the value you provide, or will provide, and keep your email subscribers interested.

The email list, in my opinion, is one of the most tremendously powerful tools available, a massive number of businesses offer email subscriptions of some form or another, as it has been tried and tested. There are a couple of things that can make your email subscriber list more effective:

·         Make the subscription component as prominent as possible on your website, place it in multiple places and promote it as a main feature of your business.

·         Stick to your scheduled delivery frequency: be it monthly, weekly, daily or hourly (some finance updates are done on a notification basis, so can be in the minutes range). Whatever you commit to stick to it. Lack of consistency puts people off, we humans are nothing more than a combination of habits, use this to your advantage and let them know that even with something as inconsequential and non-life-critical as a newsletter, you can maintain professionalism and stand by your commitments. Doing so shows you can be relied upon consistently.

·         Provide value. Your newsletter should provide value, it could be to tell your story and update your users as to what you have been doing behind the scenes, or it could be an update on upcoming products/ranges, it could be special offers or discounts, just make it something of value. Take your time and think about what you’re providing in every email you send.

There are tools out there that allow you to manage your email lists and automate the newsletter process. Website providers, like Wix, offer built-in tools as part of an add-on, but there are other third-party tools out there, just web search “email newsletter platforms” and you will see a list you providers you can research for yourself.

                An example of a newsletter in action is right here. As part of my efforts to provide insight into modern business practices, I have my own newsletter just for this purpose. In this newsletter, I provide updates on my latest articles and practical guides on implementing these practices in the real world. One such guide is in the use of Email Newsletter Platforms, how to evaluate what you need and compare against the features each provider offers. If this is something you would be interested I would be delighted to welcome you into our community:

Subscribe to my newsletter

Pro tip: Always ensure that your subscribers can unsubscribe. There are many reasons a user may not want any more newsletters or communications. It’s not for you to decide to just keep mailing them regardless. Whatever email management provider you chose, please ensure they have the ability to allow your users to unsubscribe as they see fit. Also, using a provider that automatically provides this makes things easier.

Method #2         -              Pre-orders

Sourcing or manufacturing a product can be costly and putting down the upfront cost may cost more in resources than we actually have or be more risky than we would like to lose if we can’t generate enough interest. If the idea is good it would be a terrible tragedy to deprive customer of the potential benefits they would gain if the product was available.

The good news is that many customers are happy to wait for a period of time for the arrival of a product, even after they have paid for the item or service. This means that we can generate an idea, offer it for sale, then source, acquire and deliver the product or service once we have all the money we require to do so. If we don’t generate enough cash resources to proceed, we simply refund each customer who have already paid, resulting in no loss to us.

There are a couple of things we need to do here to make this effective:

We need to explain to our customer that this is what we are doing and be transparent about what we plan if things are successful in raising all revenue required and the plan if we are not successful.

We need to keep customers informed of developments. If there is a delay at customer then we need to let our customers know so they don’t feel they are in the dark. Pro tip, we are building a community with every stage of the process, by informing our customers and keeping them informed they will feel more included in our community than if we exclude them from updates and status.

There are other individual things we can do, like: providing a FAQ to the website, responding to and implementing feedback, and others.

To finalise this blog post I would like to offer two final pieces for you to act upon and start doing now:

Think about your idea, get used to this process, consider the customers you will be doing business with, what are their interests in your products or service, how can you prove there is a demand for your idea, without spending more than you need, how can you implement stages to reduce rick and grow interest and demand, think about the resources you have at hand and what resources will you need to push through to the next stage and also to capture evidence at every stage, how do you prove to financial institutes and lenders/investors that this is a viable and ongoing concept.

The other is to think of value. How do you provide value to your customers, how do you ensure that value is being provided over others and what your competitors offer. Value can be broken down in a number of ways, think about and clarify via validation what are the values your customers care about.