Tips when starting a new business
If you're planning to start a business for the first time here are some of the key issues for business success that you need to consider:
Find a professional business adviser
Whatever the size of your new small business venture it’s always a good idea to get professional advice at the earliest possible stage – preferably way before you startup or begin trading. For tax advice and bookkeeping you could use the HMRC’s Business Support teams (they run free workshops to help you with a variety of tax and national insurance issues). You should also use a qualified accountant or a solicitor for advice on your new small business idea. Most accountants and solicitors will provide a free half hour consultation to cover the basics of starting a small business with you. As well as receiving qualified advice, you can also use these sessions to evaluate the range of services they provide, and what their charges are. It's false economy to skip getting proper legal and financial advice at this stage of your startup business.
Where to find business start-up funding, grants and loans
If you’ve got no savings you’ll inevitably need some money to start a business – even if it’s just to cover your living expenses until you start earning an income and making a profit. If you need cash it’s easy and quick just to rely on an overdraft or credit card, but these are not the cheapest or most efficient ways of borrowing. Family and friends are other alternatives, as are grants, venture capitalists, business angels, your bank manager, the government's small firms loan guarantee scheme, or, if you’re aged between 18 and 30 you could approach the Prince’s Trust. If you need to find startup business finance you will definitely need to create a business plan. You could also look at j4b.co.uk website for information on grants, loans, venture capital and awards to support your organsiation.
Remember, if you need equipment for your startup business you don't necessarily have to buy it - why not reduce your capital outlay by leasing it. You can lease almost anything: from office furniture and IT equipment, to tools and factory equipment, to vehicles.
Where will you operate your small business from?
Where you operate your startup business from will depend to a large extent on what you plan to do. If you’re not planning to take on staff, you don’t need to provide an area for customers or suppliers to visit and you’re not manufacturing or mending anything, it may be quite feasible start a business from your spare bedroom at home (provided you tell your landlord/mortgage company and your insurance company). If, however, you need space for staff or customers, or you’re holding stock or manufacturing things it’s unlikely you’ll have adequate space or facilities at home so you need to find suitable small business premises to lease, rent or buy. If you choose to run a small business from home, consider having a virtual office address to create a more professional image.
Check there's a market for what you're planning to offer
However good you think your product or service is, and however useful you think your customers will find it, unless they are prepared to pay money for it your new business will never survive. Remember - what you think people need is sometimes very different to what they are prepared to pay for. So, whatever your small business idea is you’ll need to do some research and run some trials to make sure there’s a market for it AND you can make a profit from it.
For more information see our article on free resources for researching your market or why not see if online market research will work for your business idea.
Be better than your competitors
To start a business and be successful you need to be better than your competitors. So you need to know who they are, what their products are, and what their strengths and weaknesses are. Only then will you know what your unique selling point is and therefore how and where to promote your own small business to its best advantage. For example, if you know your competitor takes 5 days to deliver and you can do it in 2, make sure you mention despatch and delivery time in all your sales materials.
Outsource things you can't do yourself
You’re unlikely to have all the skills you need to run your startup business alone. Stick to what you’re good at and what is a sensible use of your time. If you’re a highly skilled technician it’s a waste of your potential earning time to be sat in an office logging your sales invoices and reconciling your delivery notes. It’s important not to under-estimate the amount of time it takes to run a small business so you should consider whether you’re better off employing someone to do some of the work for you. There are several ways to achieve this: employing staff, using freelancers, or outsourcing to a services company.
If you need to employ people make sure you do it legally – all the informationyou need is on the HMRC website or call 0845 60 70 143 and ask for the New Employers Starter Pack. There are lots of legal obligations on you as an employer including payroll, tax and National Insurance contributions, as well as health and safety regulations.
If you don’t think you startup business is ready to take on full-time staff just yet consider part-time or freelance workers until your small business is established and you know exactly what skills you need and what you can afford to pay.
Have a business plan
When you’ve considered all of the above you’re well on the way to creating a business plan for your new startup business. It doesn’t have to be a formal document (unless you're looking for funding), but it should capture the ideas of what you want to do, how you want to do it, and where your income and costs are coming from. There are usually two reasons why you would create a business plan: the first is to present to potential investors, the second is as a tool to help with running your business.
Do not under-estimate how useful this thinking and planning stage can be: even if you don’t need a business plan for investment purposes now, you may need it at some point in the future. Above all a plan will help you clarify your ideas and reasons for stating a business, and will help you focus on your goals. It should be reviewed and updated regularly as your business and the market develops.
Don't delay
You want to get started quickly but make sure you’ve got all bases covered first. Make a list of everything you need to do before your small business can start trading, and have a target launch date in mind. Then work backwards from your target launch date and set a start and finish date for everything that needs to be done. This is basic project management and if your start date for your first task is two months ago you know you’ll either need to move your launch date or get some help!
Don’t be tempted to cut corners at this stage or you could find yourself with problems such as a fully staffed office and no IT system, or an exhibition stand with no brochures on it!
Don’t make the mistake of waiting for everything to be perfect though, some things CAN wait and as long as you’ve weighed up the risks and worked out how to manage them, the sooner you actually get started the better.
Personal reasons for starting your own business
Establish what your personal motives are for wanting to start a business or become self-employed. People start a business for a variety of reasons; to make more money, to have more control over what you do, to make your own decisions and develop your own ideas, to work less hours, to spend less time travelling, to develop and market an invention, or one of a hundred or so other reasons.
There is no right or wrong reason for starting a small business, but you need to think about this in order to keep focussed on achieving your end goal.
Enjoy it!
Whatever you do in your startup business it’s important that you get enjoyment from it. Make no mistake – working for yourself is hard work: it takes long hours, dedication, self-belief and tenacity. If it’s something you don’t like doing or can’t do well you’re more likely to fail, and make yourself very miserable in the process.
Tips when starting a new business
If you're planning to start a business for the first time here are some of the key issues for business success that you need to consider:
Find a professional business adviser
Whatever the size of your new small business venture it’s always a good idea to get professional advice at the earliest possible stage – preferably way before you startup or begin trading. For tax advice and bookkeeping you could use the HMRC’s Business Support teams (they run free workshops to help you with a variety of tax and national insurance issues). You should also use a qualified accountant or a solicitor for advice on your new small business idea. Most accountants and solicitors will provide a free half hour consultation to cover the basics of starting a small business with you. As well as receiving qualified advice, you can also use these sessions to evaluate the range of services they provide, and what their charges are. It's false economy to skip getting proper legal and financial advice at this stage of your startup business.
Where to find business start-up funding, grants and loans
If you’ve got no savings you’ll inevitably need some money to start a business – even if it’s just to cover your living expenses until you start earning an income and making a profit. If you need cash it’s easy and quick just to rely on an overdraft or credit card, but these are not the cheapest or most efficient ways of borrowing. Family and friends are other alternatives, as are grants, venture capitalists, business angels, your bank manager, the government's small firms loan guarantee scheme, or, if you’re aged between 18 and 30 you could approach the Prince’s Trust. If you need to find startup business finance you will definitely need to create a business plan. You could also look at j4b.co.uk website for information on grants, loans, venture capital and awards to support your organsiation.
Remember, if you need equipment for your startup business you don't necessarily have to buy it - why not reduce your capital outlay by leasing it. You can lease almost anything: from office furniture and IT equipment, to tools and factory equipment, to vehicles.
Where will you operate your small business from?
Where you operate your startup business from will depend to a large extent on what you plan to do. If you’re not planning to take on staff, you don’t need to provide an area for customers or suppliers to visit and you’re not manufacturing or mending anything, it may be quite feasible start a business from your spare bedroom at home (provided you tell your landlord/mortgage company and your insurance company). If, however, you need space for staff or customers, or you’re holding stock or manufacturing things it’s unlikely you’ll have adequate space or facilities at home so you need to find suitable small business premises to lease, rent or buy. If you choose to run a small business from home, consider having a virtual office address to create a more professional image.
Check there's a market for what you're planning to offer
However good you think your product or service is, and however useful you think your customers will find it, unless they are prepared to pay money for it your new business will never survive. Remember - what you think people need is sometimes very different to what they are prepared to pay for. So, whatever your small business idea is you’ll need to do some research and run some trials to make sure there’s a market for it AND you can make a profit from it.
For more information see our article on free resources for researching your market or why not see if online market research will work for your business idea.
Be better than your competitors
To start a business and be successful you need to be better than your competitors. So you need to know who they are, what their products are, and what their strengths and weaknesses are. Only then will you know what your unique selling point is and therefore how and where to promote your own small business to its best advantage. For example, if you know your competitor takes 5 days to deliver and you can do it in 2, make sure you mention despatch and delivery time in all your sales materials.
Outsource things you can't do yourself
You’re unlikely to have all the skills you need to run your startup business alone. Stick to what you’re good at and what is a sensible use of your time. If you’re a highly skilled technician it’s a waste of your potential earning time to be sat in an office logging your sales invoices and reconciling your delivery notes. It’s important not to under-estimate the amount of time it takes to run a small business so you should consider whether you’re better off employing someone to do some of the work for you. There are several ways to achieve this: employing staff, using freelancers, or outsourcing to a services company.
If you need to employ people make sure you do it legally – all the informationyou need is on the HMRC website or call 0845 60 70 143 and ask for the New Employers Starter Pack. There are lots of legal obligations on you as an employer including payroll, tax and National Insurance contributions, as well as health and safety regulations.
If you don’t think you startup business is ready to take on full-time staff just yet consider part-time or freelance workers until your small business is established and you know exactly what skills you need and what you can afford to pay.
Have a business plan
When you’ve considered all of the above you’re well on the way to creating a business plan for your new startup business. It doesn’t have to be a formal document (unless you're looking for funding), but it should capture the ideas of what you want to do, how you want to do it, and where your income and costs are coming from. There are usually two reasons why you would create a business plan: the first is to present to potential investors, the second is as a tool to help with running your business.
Do not under-estimate how useful this thinking and planning stage can be: even if you don’t need a business plan for investment purposes now, you may need it at some point in the future. Above all a plan will help you clarify your ideas and reasons for stating a business, and will help you focus on your goals. It should be reviewed and updated regularly as your business and the market develops.
Don't delay
You want to get started quickly but make sure you’ve got all bases covered first. Make a list of everything you need to do before your small business can start trading, and have a target launch date in mind. Then work backwards from your target launch date and set a start and finish date for everything that needs to be done. This is basic project management and if your start date for your first task is two months ago you know you’ll either need to move your launch date or get some help!
Don’t be tempted to cut corners at this stage or you could find yourself with problems such as a fully staffed office and no IT system, or an exhibition stand with no brochures on it!
Don’t make the mistake of waiting for everything to be perfect though, some things CAN wait and as long as you’ve weighed up the risks and worked out how to manage them, the sooner you actually get started the better.
Personal reasons for starting your own business
Establish what your personal motives are for wanting to start a business or become self-employed. People start a business for a variety of reasons; to make more money, to have more control over what you do, to make your own decisions and develop your own ideas, to work less hours, to spend less time travelling, to develop and market an invention, or one of a hundred or so other reasons.
There is no right or wrong reason for starting a small business, but you need to think about this in order to keep focussed on achieving your end goal.
Enjoy it!
Whatever you do in your startup business it’s important that you get enjoyment from it. Make no mistake – working for yourself is hard work: it takes long hours, dedication, self-belief and tenacity. If it’s something you don’t like doing or can’t do well you’re more likely to fail, and make yourself very miserable in the process.