Three golden rules for starting up a business

Authored by Hiscox Experts.
3 min read

It’s tough to start up a business and, though you’re never guaranteed success, having lots of passion, a few quid and a good idea is a great start. But that’s it – a start.

There’s no blueprint for what makes a company successful. From my experience in small businesses I have owned, worked in or admired there are three main areas that can be very helpful in achieving success.

Know your target market

You have to understand the type of customers you want. It doesn’t matter what you’re selling – computer software, shoes or cars. I’ve seen many new businesses that haven’t properly considered whether anybody actually needs what they’re offering. Often these struggle and may ultimately fail, whereas those businesses that have really done their homework normally manage to get off the ground.

This may seem very basic but it’s often the basic business principles that might be ignored because entrepreneurs are so enthusiastic about their big idea. But your potential customers need to share your excitement too otherwise no one’s going to buy from you.

Just because your idea or product isn’t available anywhere else that doesn’t mean there’s a gap in the market. It could just be that no one wants it. Although, in the words of Henry Ford: “If I had asked people what they wanted, they would have said faster horses!” Ford was one of a rare breed of inspirational entrepreneurs who created a need and then sold a product to meet that need. Steve Jobs was another. But most of us aren’t Ford or Jobs.

Know your competition

I have been up against tough competitors and they have really helped me to become better at what I do. However again when entrepreneurs become completely focused on their big idea they don’t stop to see and understand what their competitors are up to. But that’s a big mistake. It isn’t about fearing the opposition. It’s good to study them so you learn how to do better than them and to avoid some of their mistakes. A quick trawl on the Internet can give you so much useful information on what your rivals do, how they do it and how much they do it for.

And remember – someone else out there might be figuring out how to make your great product even better.

Serve your customers better than anyone else

This is crucial for any business. Saving costs by cutting corners on service is short sighted. Think about it: do you go back to stores where you have received poor service? Would you recommend it to your nearest or dearest? No. If you don’t tolerate poor service as a customer then why should your own customers? A bad reputation is hard to live down and you can bet your rivals will exploit it.

My Dad, who has owned businesses all his life, said to me: “Don’t run a business because you want to be your own boss, because you’ll have lots of bosses – your customers. And without them you’ll have no business.”

I’ve taken his advice and my own businesses have prospered because, even though we have sold products that are readily available elsewhere, my team has provided a great service.

These are not an exclusive list of tips, but if you follow them you won’t go too far wrong. I’m also really interested to hear your own views and experiences of what it takes to start up a good business if you would like to share them in the comments section.

At Hiscox, we want to help your small business thrive. Our blog has many articles you may find relevant and useful as your business grows. But these articles aren’t professional advice. So, to find out more on a subject we cover here, please seek professional assistance.

Hiscox Experts

The Hiscox Experts are leaders valued for their experience within the insurance industry. Their specialisms include areas such as professional indemnity and public liability, across industries including media, technology, and broader professional services. All content authored by the Hiscox Experts is in line with our editorial guidelines.