Starting a business takes a lot of time, thought and consideration, but once you have done your research, you have the potential to make a real success of your venture. Before taking the leap into entrepreneurship, however, here are some things you need to consider first.
Do you possess the right skills?
You might be a fantastic cake-maker, but you need to do more than this if you want to succeed at a wedding cake company. For any business, you cannot just rely on the quality of your product or service. Unfortunately, without these other talents, no-one will find you and you will not be able to achieve real success.
Therefore, ask yourself whether you possess sales, marketing, administrative, PR, IT and accounting skills. You can, of course, outsource some things, particularly as the company expands. However, to maximise profits in the early days, you may have to undertake all of these jobs yourself, so it is important to make sure you are knowledgeable about each area.
Knowing your USP
Your parents, friends and partner might love your idea, but it is not them you need to convince to buy it. Make sure you are confident your product or service will be saleable by really understanding your market.
You need your business to stand out, so spend time thinking about your unique selling point (USP) and ensure this is attractive to those you are trying to pitch to.
The best way to do this is to take part in focus groups, so you can gauge what members of the general public think and whether they ‘buy into’ your USP. Their feedback will be invaluable and can really help shape your business plan.
Create a solid business plan
Whether you need a business plan to get a loan from the bank or not, it is wise to have a comprehensive report on what your company intends to do, who it will market to, and what you predict it can achieve.
Support your plan with research, statistics and information, so it is as realistic as possible, and include estimations of what your outgoings, incomings, total returns and profits will be over the next few years. Do not forget expenses such as running costs, transport, rent, staff, utilities and your own salary, and discuss how you plan to invest money back into your business in the future.
Make important decisions
You cannot start your business without being 100% confident about important decisions, such as the name of your business. Pick one that really sums up what you offer, is catchy and can easily be remembered. Check it does not already exist by looking on www.companieshouse.gov.uk and make sure you can get a URL for it to create a website as well.
Decide whether you plan to be a sole trader, partnership, limited liability partnership, limited company or plc. Each have pros and cons, depending on your situation, so make the decision carefully.
Work out where you will work – whether from home, in an office, on the move or from a company car – and make sure your budget and lifestyle can fit in with this arrangement.
Get your finances in order
Aside from finding capital to set up your venture, you will need to sort out your accounts as soon as you begin trading. This means registering with HMRC, signing up for your tax return, and paying your National Insurance Contributions.
If your business will hold data on customers or clients, register with the Information Commissioner’s Office for £35 per year. It is wise to seek advice from a solicitor or accountant if you are unsure of how to handle business levies, expenses and profits, although it is wise to have an understanding of these yourself to save you money.
For more information about setting up your own business, visit https://www.gov.uk/topic/business-tax/self-employed, www.greatbusiness.gov.uk or take a look at our website where you can find advice on all aspects of running your own enterprise.