It can be a daunting task starting your own business, we know we have done it! But it is very rewarding and we hope our advice can help you think logically before taking the plunge!
Thinking of starting a business?
In the last four years 40% of new jobs have been in self-employment, and the self-employed now make up one seventh of the UK workforce. Being self-employed, at best, offers unparalleled freedom – your boss is reasonable at last! It’s nearly always very hard work and at worst it can be downright lonely. This article outlines five steps you can take in deciding whether to start your own business.
1 | Research your idea
Over 75% of businesses fail in the first year. It’s easy to let a great idea run away with you – of course you will love it, it’s your idea! But others will need to love it too, if your business is to be successful. Before you get carried away, do your homework. Research the market, get to understand your potential customers and what makes them tick, understand what excellent service looks like, who are the competition and how can you beat them?
2 | Choose a name and brand
You don’t need to spend money yet, but do some serious thinking. Chat through your ideas with friends or family. Google your chosen business name, see if you can buy the domain. Also check out the availability of the company name on the Companies House website and consider the scope for confusion with other local businesses and the risks of being sued (Easy Jet are well known for writing to anyone starting a business named “Easy…”).
Your brand is more than a name. What will your new business mean? What values will it embody? How will it help people? Thinking this through will give you a much clearer idea of what you plan to do before you do it.
3 | Think about your marketing mix
The marketing mix is your product, place, price and promotion.
What is your product? What are the options or versions? How does it meet your customer’s needs? These questions apply whether you will be selling a product or a service. Place defines where and how you will sell your product. Will you have premises or a website? Will you distribute your product through a third party?
Think about your price on both a cost-plus and a market-led basis. If you think you can sell below the market price you have probably missed something (like tax!).
Promotion options will include advertising, PR and using social media. It’s not enough to have a website. Facebook is starting to work really well for many local businesses and is excellent value compared to many more traditional methods. Of course, local businesses should always consider The Advertiser!
4 | Look at the finances
Download a business plan template and really analyse your numbers. Check you will have a healthy margin to cover both costs and taxes and still leave you a salary. Do a breakeven analysis and consider how you will achieve the required level of sales, how long it will take, and what you will live on in the meantime.
5 | Take advice
If you’ve got this far, it’s time for a reality check. Get as much free advice as you can. Most accountants will happily offer a free session if asked – it’s our investment in helping you get off on the right track. Talk to people who will ask you difficult questions. Hambleton District Council provides plenty of support including “Lunch and Learns” seminars at a reasonable price. Other organisations like Enterprise North Yorkshire offers mentoring and a wealth of advice on all aspects of business. Use the free resources around you; the Internet has many free tools to help you as well as High Street banks support. Our website has a free start-up checklist to get you going.
There’s no shame in delaying your decision or in postponing it till you have more experience. Starting your own business is not for the faint hearted and its best to take plenty of time to prepare before taking the plunge. But don’t feel you have to tackle it alone. Get some good advice and start your business with a positive mind, you will really enjoy it.
This guest blog was provided by Lydia Ebdon, Approachable Accountants
If we can help in any way wherever you are in your new business, please do contact us at hello@approachableaccountants.co.uk or checkout the free advice on our website.
Or visit our website: www.approachableaccountants.co.uk
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