‘The dream’ for many aspirational people is to be a director; an owner of their very own business which they have built from the ground up and is their pride and joy. Some people only dream, but others take action and start their own business. If you’re thinking about doing it, have you thought of everything? As with many things, a business starts with a plan.
Are you going to be quitting your job and renting an office or are you going to build your business in your spare time? What financial backing will you have? Are you expanding into your current industry or breaking into a new one?
Here are a few top tips on what you will need to think about before starting your own business.
- Research, Research, Research.
- Make a plan
- Start small
- Deal with the right people
Don’t make the mistake of thinking it will all be easy. It sounds easy enough on paper, but it’s worth asking yourself personal questions as well as business ones, such as how will this impact my life and family? If you feel you’re in a stable enough position in your personal life to start a business, you’re left with the business questions. It’s great to have aspirations but you also need to keep them realistic.
When thinking of doing something as big as starting your own business, research is the primary action. First things first, where is the money coming from? Do research into bank loans, funding and grants that may be available to you to help start your business, such as direct grants, soft loans, or equity finance. Once you have established a product, chosen an industry and developed your USPs, start to research your industry, your market and your competitors. Choose your target market and how you will target them. Don’t overlook marketing; it’s a powerful tool to get your customers through the door. The Creditsafe system offer a tool called Marketing Prospects, which allows you to search potential customers by SIC code based on industry, so you can group together relevant prospects to target in your marketing programme. Make sure you check the financials and check them again, the last thing you need is to run out of money when you’re in the first few stages of creating a company.
Make a plan
When creating a business plan, every single detail about your business should be in there and it should lean heavily on financials. Unless you are competing for a £250,000 business investment on ‘The Apprentice’, you need to think where your money is coming from, how are you going to spend it and how are you going to get it coming in. Financials are the key to any business and you need to see a return on your investment. How many people are you going to hire? What’s the cost to make and ship your product? Are you going to trade online? How are you going to get yourselves known?
There are a million questions you need to ask yourself and the answers should all be in your plan.
A top tip from us would be to not let your dreams run away with you and have realistic expectations. If you budget to bring in less money than you think you will, you will hopefully never get into trouble. Living out of your means in business is when your cash flow starts to get wobbly, so don’t splash out on all the best equipment and the most expensive accountant. Live below your means until you start to see a return on your investment. Also, start geographically small. Maybe start a small business online, build up your clients and slowly and comfortably take on more work. If you can’t afford to open your own shop, try to get your products into other shops; start local or with smaller independent shops. Pitching to bigger brands and getting your product out there is a favoured way amongst new designers of products, but it’s not easy to get through the door. Establish yourself as a business before aiming for the big guns. If you’re starting a business that offers a service, make sure you have the staff for the demand, a website and a landline. Do the old fashioned thing and get yourself in the yellow pages. Every little bit of promotion can help any new business. If your dream is to become a giant global footprint in your industry, you need to start with a small local footprint.
Deal with the right people
Deal with the right people to help you build your business, but also deal with the right people when you’re up and running. Talking to banks, advisors and other business owners will help you no end when you’re trying to get your business up and running, first hand advice is always best. When you are up and running and are looking to get customers through the door, don’t lower your standards in whom you deal with. A bad dealing with an uncreditworthy customer at the beginning when your company is fragile could finish your business within 6 months. If they don’t pay you, your cashflow will struggle- causing your business to struggle. A credit report can show you who is and isn’t creditworthy- giving you information on payment behaviour, financial records and director details. Get them and check every customer you deal with, and not only at the start as circumstances can quickly change.
So are you ready to start your own business? Enjoy our top tips and good luck!