Was “start a business” one of your New Year’s Resolutions? If so, you’re not alone; research shows that Britons are up to 10% more likely to start a business this month than in any other month of the year. If you’re using the start of 2017 to turn that business idea into a reality, here are some of the key things you should be thinking about to get it off to a great start.
1. Business Plan
Turning an idea into a real, functioning business starts by being clear about every aspect of how your business will run. To that end, it’s worth drawing up a formal business plan, whether you show it to anyone or not. Visit the Prince’s Trust website to download a free template business plan and work your way through each section with the help of the rest of the tips in this article.
2. Market Research
If you’ve ever watched The Apprentice, you’ll know the importance of market research. Before you take your business idea any further, you need to know that there is a market for it, so it’s vital to conduct thorough market research with your target audience. Of course, this means you’ll need to start with a clear idea of who you intend to market your business to. Your survey results should help give you an insight into what your intended audience thinks of your product or service, and may even give you some ideas to modify your plan slightly.
Alongside your market research, you should also conduct research into your competitors and assess their strengths and weaknesses to identify where your business could improve on their offering. If they’re selling a similar product or service to yours, what are they saying about it, and how much are they charging? How will yours be different, and why should a customer come to you and not a competitor? The answers to these questions will help you come up with your unique selling propositions – in other words, what your business has that others haven’t.
4. Premises and Equipment
Will you need office or retail space for your business, or will you be running it from home? If you need to rent space, you’ll need to think carefully about its location and local demand for your kind of business; if your business is likely to rely on passing trade, for example, location could make all the difference. If you don’t need passing trade but plan to employ people, you’ll need to choose somewhere that’s easy for employees to get to, with good transport links and somewhere for them to relax on their lunch break. Of course, business rents and rates will also be an important consideration when you’re choosing your premises.
You’ll need to work out how much your initial start-up costs will be, and how you will pay for these. You’ll also need to remember that your business may well take a while to start generating a profit, so you’ll need adequate funding to cover your running costs (and personal living expenses) during this period. Bank loans, investment and personal savings are all among your funding options, but bear in mind that the former two will need to see a well thought-out business plan setting out your plans for growth.
6. Business Name
Unless your business idea came as a result of a brainwave business name, dreaming up a name for your business can be one of the trickiest parts of setting up a company. It’s made trickier by the fact that you’ll be needing a website; finding an available domain name will be a key consideration in naming your business. For some inspiration, read what Moonpig founder Nick Jenkins has to say on naming your business.
Find a domain
Once you’ve secured your domain name, you’ll need to think about setting up a website for your new business. This is straightforward enough to do yourself using the innumerable free WordPress templates available online, but if writing isn’t your strong point, you might want to consider hiring a copywriter to write the words for you; they will be able to portray your business in the best possible light. Read more advice on planning your website here.
8. Business Type
There are several different business structures you can choose from in the UK, and you’ll need to decide which best suits your needs. If you’re going to be working by yourself or with a friend, you could set yourself up as a sole trader or partnership; if you have bigger plans, a limited company might work best. There are pros and cons to both, so find out more on the Government website.
9. Legislation and Insurance
As well as the legislation that applies to all businesses, it’s vital to make sure you’re aware of any special legislation relating to the industry you’ll be operating in. This could be anything from legislation governing the sale of alcohol to health and safety regulations. Remember to seek advice on what insurance you’ll need; if members of the public will be on your premises, for example, you’ll need public liability insurance. You should also consider how you will protect your intellectual property – for instance by filing a patent if you’ve invented something new.
10. Suppliers and Manufacturers
Where will your products come from? Finding an affordable manufacturer will be key to selling products of your own design, while a business that relies on products or services from outside suppliers will need a strong network of contacts to keep up with demand.
How much will you charge for your products or services? To work out your pricing strategy, you’ll need to know in detail what all your outgoings are and what the cost price is for producing your products or running your services. You may also want to consider what your competitors are charging for similar products or services so that you get a sense of the going rate.
Will you hire anybody to help you with running your business? If you lack experience in a crucial area, is it worth finding a business partner whose skills complement your own? You may start off running the business on your own, but you’ll need a plan in place for hiring employees if you plan to scale up your company. When you do, you’ll also need to decide how to structure your company, as well as learning about aspects such as human resources (HR), recruitment and payroll.
Accurate accounting is essential, so getting the right systems in place to support this from the outset will make life much easier when it comes to filing your tax return. A good accountant is worth their weight in gold, and engaging the services of one right from the start will ensure that you pay the correct amount of tax and keep the accurate financial records required by law.
Finally, how will you let your target audience know about your business? Before you launch, think about your marketing strategy and what you need to do to reach the right people. For example, it could be that your target audience are big users of social media, in which case social media marketing will be something you’ll need to investigate. More often than not, a combination of different approaches works best, so brainstorm a few methods to get yourself started.
It may feel as though there’s a lot to take in when you’re setting up a business, and there is; but the rewards of being your own boss will ultimately be more than worth the effort.