Do you like your business to run or do you keep running yourself?
Phase 2: You have created a job.
In phase 1, the focus is on your mission, vision and strategic targets; this includes a business plan and you have taken care of a ready customer base.
Now you make choices about your legal business entity and the constitution. Your lawyer and / or accountant have to inform you about the legal / financial implications of all potential possibilities of your business structure and you’ll go through all the formalities. The best advice is to choose for a company that suits you needs at this moment. In a later stage you can always change for a more professional and more complicated model. Keep in mind that you make your constitution as widely as possible, with many business options, even if this activity is not on your scope right now.
In Phase 2 your specialization should get all your attention. The quality of your product or service plays a crucial role. It is time to think about branding and becoming the expert. The answers to the following questions are important:
• Who is your targeted client and how do you approach them?
• What channels can you use?
• Is your logo in the style of your client?
• What colors do you choose to present your company?
• Which music goes with it?
• What is your slogan going to be?
• How are you going to decide the price of your product?
• How do you get free publicity?
• What is the purpose of your website / Internet channels? (Brochure / to generate customers / or Online Shop)
• How to create the most out of your available budget?
The key element in this stage is to define your uniqueness, so nobody can copy you. This gives you the basis of your existence and makes that you can ask a higher price for your product or service. There are many companies that linger in this phase. To be unique is crucial for a one-(wo)mans business. Your revenues are limited and determined by the time and hours that YOU can spend on your business. That does not implicate you’re not achieving great sales and income. Think of soccer players, lawyers, singers, cardiac surgeons, etc. etc. You must be the best in your profession. And keep in mind that you do NOT have a sustainable business that can survive independently without you. If you stop working your business is finished and has no value. There are companies who can sell their clientele. But it is the decision of the customer to remain faithful in changing circumstances.
In this phase(group) you also find the many small business e-shops. In my opinion these are hobbyists. Fine, no problem; only be aware of your contingency strategy.
The last couple of years we see that the European Union has strongly put entrepreneurship on their agenda. Startup SMEs, in the recent years, have been favorably encouraged with the support of grants. Europe has a high unemployment rate and the idea is that if you set up a business, at least you create your create your own job. If you do it well you also help other people to employment.
85% of new jobs and 67% of all jobs in Europe are established by SMEs (2002-2010). In short, SME is a group to be proud of !!
What usually is not known is that more than 99% of all European businesses are SMEs. They provide two out of three of the private sector jobs and contribute to more than half of the total value-added created by businesses in the EU. Moreover, SMEs are the true back-bone of the European economy, being primarily responsible for wealth and economic growth, next to their key role in innovation and R&D.
What is even more intriguing is that nine out of ten SMEs are actually micro enterprises with less than 10 employees. Hence, the mainstream of Europe’s economy is micro firms, each providing work for two persons, in average. This is probably one of the EU’s best kept secrets!