A Quick Guide to Starting your Own Business
There’s many things to consider when starting your own business. Luckily we have compiled a concise guide to explain just that. Take a look at our tips below and you’ll soon be on the right track to having a successful new company.
1. Evaluate yourself - Am I the right person to start a new business?
One of the first signs that you’re ready to start your own business is the nagging feeling that you’re not getting fulfilled in your current job and also the feeling that you wouldn’t be happy working for someone else, even at another company.
You get an overwhelming feeling that you have to work for yourself and that you won’t be truly happy until you do so. However, even if this is this case, there’s still a lot more questions to ask yourself before handing in your notice.
Are you a good multitasker? Are you happy to work long days and have very few holidays? Are you a self starter who doesn’t need pushing to get something done? These are all crucial questions to ask yourself.
You also need to be a good decision maker (and realise when the decision you have made is wrong), understand the huge risks of going it alone as well a good communicator as you are now the face of the company.
2. Research your product or service and the industry
Next up, you need to make sure you have done your research into the industry you’ll be in, economy, trends and the legal side of things to ensure starting a business will work for you.
Whether it’s a product or service you’re offering, you need to understand whether it’s going to increase in demand, decrease or remain stable in the coming years.
Launching your print media business in 2019 for example, might not be the wisest decision! But your research may unveil an opportunity that you hadn’t realised previously.
3. Make a New Business Plan
There’s a number of great business plan templates online that you can download and complete to give you a better understanding of your next steps.
A business plan helps you set realistic goals and strategies as well as clarifying your business idea, spotting any potential problems you may encounter along the way and measuring your progress.
4. How to finance your startup business
Firstly, you have to understand your start-up financing needs before applying for anything. Make sure to draw up a budget based on your current business plan and workout when you will need each bit of financing. Avoid unexpected issues by applying for some contingency funding.
Assess which funding is suitable for you by checking whether you qualify for any financial support. This way it makes it easier for you to know what short-term and longer term borrowing you need to do.
Sort out your investment finance to decide how much capital you can afford to invest. Things to consider:
- Outside investors
- Asking family & friends to invest
- Taking out a mortgage on your personal property
5. How to Choose your Business Structure
Another one of the initial steps to starting your own business you need to consider is choosing the right business structure. There’s pros and cons to each structure and once you understand what they each are, you’ll soon realise which structure is best for your company.
First up is the Sole Trader. This means that you are the complete owner of the business and you keep all profits made but also have to account for all losses. Whilst this is very easy to set up and maintain control of as you’re the exclusive owner, you have full debt liability and will also be paying more in tax.
A Partnership is exactly what it sounds like - an ownership between several people who share profits and losses. Whilst also easy to set up, you also have more potential to raise finances. However if you have to wind up it can become complicated and you’re also liable to most losses like a sole trader.
Limited Companies are private companies where owners are only responsible for its debts only dependent on the amount of capital they invested. Whilst you’re eligible for favorable tax regimes and have less personal financial exposure, a limited company means admin is much more complex.
Finally, a Limited Liability Partnership is where the partners have limited liabilities and have aspects of both corporations and partnerships. LLP’s are flexible but profixt is taxed as income and you can be struck off unless you start to trade within a year.
6. What to consider when Registering your new Business Name
To be compliant your new company name cannot be the same as another registered company’s name (or very similar) or an existing trade mark. Asides from that, you’re free to choose whatever you want. Make sure it’s relevant, inoffensive, simple and catchy.
Registering a business name can be a tricky decision and one that startup business owners get caught up on. Whilst there are some important considerations, don’t spend too much time on this as there’s plenty more important tasks you’ll need to focus your time on. Free Limited Company incorporation is included in all Byte accounting packages.
7. How important is Branding to your new business
Similar to registering a business name, many new business owners get hung up on the branding of the business when, in the very early stages of starting a company, this really shouldn’t be a top priority.
There’s no doubt that you want your branding to be on-brand, relevant, quality, modern, classy and reflect the values of your company but you shouldn’t focus a lot of your energy on this initially.
Hire a branding agency to make sure you’re not letting down your great product or service with cheap or amateur branding whilst simultaneously letting you get on with what you do best - running your small business.
8. How to get small business insurance cover
What insurance your business requires depends completely on its nature. A legal requirement for most businesses with staff is Employers’ Liability Cover.
If you’re in contact with members of the public you’ll need public liability insurance and if your business offers advice then professional indemnity insurance is crucial.
9. What to consider when you get an Accountant for you new business
An accountant is mandatory for your new business and the fundamental services you should be getting from yours include things such as - accounting, record-keeping, tax returns and payroll to keep you compliant.
A good accountant will also help with business advice, business auditing, tax advice and general money saving tips.
10. What to know when setting up a premises for your business
For a new business, the decision of choosing a premises to work from is huge and is many times the difference between a successful business and one that fails before it’s a year old.
A business premises is one of the biggest overheads that a company faces and you must consider whether the chosen is financially viable for you.
Do you need them at all? Can you not just work from home or is there certain facilities, amenities, transport links or locational factors you simply need to have?
11. How to build your startup team
Once you have become financially stable it’s usually a good idea to build your team by hiring staff to continue to grow the business. However, it’s not always a good time to do so and you need to make sure you’re not simply hiring someone for the sake of it.
Once you know it’s the right thing to do financially, then you should be looking to hire someone who will help the company make even more money. Whether that’s by freeing up time for you to focus on more important tasks, or by the new starter bringing with them a set of skills you never previously had.
12. Does my new business need a Marketing Plan?
Moving forward, a new business will need a Marketing plan to compete for attention with rivals in the same industry, attract new customers and retain current ones. Today there are more ways to market your new business than ever. Whether it’s traditional methods such as local press, radio or TV or modern methods such as online marketing and social media, you’ll be doing your business a misjustice if you’re not marketing them correctly.