YOUR GUIDE TO STARTING A BUSINESS

If you’re thinking about starting a business for the first time, here is a helpful guide with some hints and tips to get you started.

  1. Decide if Running a Business is Really for You
    Know yourself, your true motivational level, the amount of money you can risk, and what you’re willing to do to be successful. Of course you want to make your business a success. But what are you willing to give up to reach that goal? How many hours a week will you work on an ongoing basis? How far out of your comfort zone are you willing to stretch? How far will your family stretch with you? To be successful, keep your business plans in line with your personal and family goals and resources.

    Running a business can often be a gruelling and lonely experience so it’s important that you look after your personal wellbeing and build support networks for you and your business.
  1. Do Your Research
    Before you seriously start to plan the setting up of your business, you should firstly conduct market research to establish whether there is a proper opportunity to turn your idea into a successful business.

    It may be useful to consider the following:
    • Is there a market and strong enough demand for your product/service?
    • Who is already selling your product/service and how are they doing it?
    • What is the cost to produce your product/service and what is the average selling price?
    • Are you selling an existing product or service or introducing a completely new one?
    • If you’re selling a new product/service could a competitor easily replicate it?
    • If you’re selling a product/service that already exists, how will you do things differently and stand out in the market?
    • This should lead you to consider what your USP – unique selling point is. This is the thing that sets your business apart from the competition and hopefully keeps customers returning. It may be great prices, high quality products, your expertise, excellent customer service and even you as an individual. You should aim to develop and do something unique and different, even if the products and services you sell are already available.

    Keep up to date with what is going on in your industry by signing up to relevant industry body newsletters and blogs and free business news sites wherever possible.

    Completing your research should ensure you know your industry, your customers, your competitors and a little about the wider business environment.
  1. Test the Market and Offer a Solution
    Don’t simply sell or do something because you want to. Take an ‘outside in’ approach to your product(s) – why would people purchase it? What issue are you solving for customers and how is your product helping them? Will people actually buy your product at the price you wish to sell it for?
  2. Draft a Business Plan
    This may feel like an intensive piece of admin to complete so early into your small business journey, but it will provide you with a solid foundation for running your business and will get you thinking about all the different elements required to run your business.

    A business plan is an evolving entity and should be reviewed and adapted on an ongoing basis. It doesn’t need to be overly detailed, 3-10 pages plus a financial plan should be sufficient. Your business plan should be a working and usable document that supports you in the running of the business, not a hugely onerous task that’s forgotten about as soon as it’s complete.

    You can find further advice and example business plan templates here but a typical business plan will usually contain:
    • An Executive Summary, outlining what your business sells and how this will be done.
    • A list of all products and services on offer, plus their production costs and selling costs.
    • A financial forecast for years 1, 2 and 3, showing all your business costs and your targets for how much revenue you aim to generate.
    • Market research and details on who your customer is.
    • A marketing plan with details on how you plan to promote your business and reach and engage with customers.
  1. Cost Your Start up and Plan How You Will Fund It
    Total up all the costs associated with launching and running your business. This includes premises, production, marketing, legal, IT, staffing and more.

    Don’t forget to factor in your personal living expenses too, listing your absolute must-pays like mortgage, rent, food and fuel and then the nice to haves such as entertainment and socialising.

    Whilst you should always aim to generate income for yourself and take a wage, be prepared for this taking a while to happen and ensure you can survive whilst building your business.

    This may mean fitting in your startup around an existing job and putting in additional hours, but at least it will ensure you have a regular income and can focus on growing the business steadily, without becoming desperate if the money doesn’t come straightaway.

    You might wait to start your business until you have saved up a financial reserve or borrow the necessary funds to pay expenses until your business becomes profitable.

    Small business loans or grants can also help you finance your startup and if you feel it will be profitable, you may also want to seek out some investors.

    Start Up Loans
    Government-backed Start Up Loans of £500 to £25,000 are available to start or grow your business.

    Unlike a business loan, this is an unsecured personal loan.

    You’ll also get free support and guidance to help write your business plan, and successful applicants get up to 12 months of free mentoring.

    To apply for the loan all of the following must apply:
    • you live in the UK.
    • you’re 18 or over.
    • you have (or plan to start) a UK-based business that’s been fully trading for less than 24 months.

    Start Up Loans charge a fixed interest rate of 6% per year.

    You can repay the loan over a period of 1 to 5 years. There’s no application fee and no early repayment fee.

    Find out more here

 

  1. Register your Business
    Most businesses register as a sole trader, limited company or partnership.

    Sole traders – It’s simpler to set up as a sole trader, but you’re personally responsible for your business’s debts. You also have some accounting responsibilities.

    Find out more about being a sole trader and how to register.

    Limited companies – If you form a limited company, its finances are separate from your personal finances, but there are more reporting and management responsibilities. They’re called limited companies as this means your personal liability in relation to the business is more limited than if you are a sole trader.

    Some people get help from a professional, for example an accountant, but you can set up a company yourself.

    Partnerships – A partnership is the simplest way for 2 or more people to run a business together.

    You share responsibility for your business’s debts. You also have accounting responsibilities. Find out more about being in a partnership and how to register.

 

  1. Understand Relevant Rules and Regulations
    You may have other responsibilities depending on what your business does.
    Check if you need:
    licences or permits, for example to play music, sell food or to trade in the street
    insurance

    There are also rules you must follow if you:
    sell goods online
    buy goods from abroador sell goods abroad
    store or use personal information

    Where you work
    Check what your responsibilities are if you:
    run your business from home
    rent somewhere to run your business from

    If you rent or buy a property, you may have to pay business rates. Small businesses can apply for a discount on business rates and some may pay nothing.

    Check if you can claim office, property and equipment as expenses.

    Taking on people to help
    If you take on agency workers or freelancers you have some responsibilities, for example their health and safety.
  1. Keep Things Simple at First
    Focus on a simple proposition and product range, then grow this gradually.

    Keep your communication simple too. You should be able to explain to someone what your business does in 30 seconds so that they understand who you are, what you do and how it benefits your customers.
  1. Believe in Yourself and Your Business
    And live and breathe it. In addition to being able to sum up your business really clearly and succinctly, you should speak and sell it with passion, getting others excited about it too.

    This is important when marketing your business to your customers and attracting investors should you need them.
  1. Two Ears, One Mouth
    Listen and learn from everyone around you. Friends, family, potential customers, other business owners, competitors, business leaders. Everyone has valuable experience and insights to share with you – use this to help shape your plans.

    You should also adopt this approach with your marketing and communications too. Listen to your customers and engage in meaningful, two-way conversations, which focus on the needs of your customers, not you and your business.
  1. Put Yourself Out There
    Whether you like it or not, you must be prepared to get out there and be the ‘face’ of your brand. People buy people and customers and peers like seeing the people behind small businesses.

    You need to be able to effectively sell your business and communicate with customers, peers and suppliers, both online and face to face. If you’re not as confident with this, start small and practice, practice, practice – it does get easier.

    Attend networking events wherever possible to build up your networks and use videos to showcase your brand and your story online. It can take some getting used to at first but it’s a free marketing and brand tool and will enable you to showcase your passion and expertise.
  1. Get Support
    Take the time to network, go to events and meet people in a similar situation.

    Business mentors can help you develop your ideas for growth by sharing their skills, expertise, experience and contacts.

    Find free and paid-for mentors in your area with knowledge and experience relevant to your business on the mentorsme website,

    Don’t be afraid to share your challenges with family and friends, running a business can often feel like a lonely experience and pressure can build up, but talking through any issues always helps.