An unprecedented number of start-up law firms have emerged in the wake of perpetual mergers and acquisitions, shift of market conditions and rapid advancement of technology-based solutions, writes Anthony Hersch.
The challenge that many start- ups face, independently of industry, is being a specialist in their respective field versus necessarily being adept at running a business.
Here are few areas for consideration before taking the plunge as an entrepreneur:
- Identify your point of difference
Prioritising your point of difference is often trumped by doing business – particularly in the SME space.
However, in a time of ever-increasing competition and a marketplace where being exceptional is becoming the norm, it’s never been more critical to articulate what you do specifically that differentiates you from your competitors. When determining your point of difference, be aware of some rookie mistakes: service is not a point of difference. Being trustworthy, personable and accessible are not points of difference. These are all expectations.
Conversely, an area of specialisation, concentration on a particular client profile or region are a good point of differences. When defining your point of difference, review:
o Product/ service offering: What is your offering and corresponding user benefits?
o Define your market: Who are they, what do they want and what demand does your product/ service fulfil?
o Identify your core customer: Who is your core customer profile (age, sex, postcode, circumstance, income, etc)?
The proof of the pudding is whether you can summarise your point of difference in a 20 second ‘elevator pitch’.'This could be along the lines of ‘We’re commercial law specialists for boutique construction firms in NSW’.
- Create a powerful brand
A strong brand instills trust and helps facilitate sales. Invest in developing your brand identity, to include a distinctive, professionally-developed logo, complementary image suite and messaging that reinforces your specialty.
- Tell your story
A powerful brand is a toothless tiger in the absence of a communication plan that connects you to your market. Consistent, and relevant, communications encourage engagement and confidence. To achieve maximum traction, keep your messaging simple and regularly connect with your target audience with high-quality, relevant content.
An integrated approach that dovetails multiple channels into each other will always be far more effective than relying on a single tool (i.e. just doing a social media campaign, vs backing it with regular emails, advertising, etc).
At a minimum, consider a professional website and a mix of lead-generating and educational posts on LinkedIn, Facebook and Twitter on a weekly basis as a starting point.
- A network is not a distribution pipeline
Keep in mind that an industry presence and established network is not a distribution pipeline: meaning the contacts you have won’t automatically jump ship the minute you start shop. As appropriate, be sure to gauge key stakeholders’ risk appetite for change prior to assuming their support.
Make the effort to stay in touch with those you already know, attend industry events to keep your finger on the pulse and across market movements (a.k.a. opportunities). In addition, use social media to further your network and engage with your target market.
- Challenge traditional resourcing
Be open to alternate sourcing models to maximise operational efficiencies and alleviate time being spent on non-billable tasks.
As an alternative to appointing a permanent or part-time role in-house, it’s becoming more commonplace to outsource areas such as administration, book-keeping and/ or marketing.
Should you decide to appoint an internal resource, be sure the placement has the skills to fulfil the business requirement (as opposed to who’s available, or who you know).
- Keep your cashflow in check
Growth is rarely achieved without smart cash-flow management. Best practice measures include keeping your books accurate and up to date, making sure your business and personal finances are separated and building a 3-6-month cash reserve as a buffer. It’s wise to engage with an accountant to assist with business, cash-flow and rolling tax plans, along with corresponding growth strategies from the outset.
Anthony Hersch is the chief operating officer of JustKapital.