What does it take to run your own business? It’s the age old question that many budding entrepreneurs ask. The considered answer would be that you need to possess a good amount of business acumen and organisational skills, believe in your product or service and have great understanding of your target market. Don’t be discouraged or overwhelmed by what lies ahead, it’s easy to get flustered and swept away with the excitement of it all. Just remember to use your nous, stay grounded and work to your goal. What’s fundamental to the success of your business is the business idea itself – it’s the most important component of them all.
The entrepreneurial spirit is alive and well, with many people considering that their gem of an idea offers up the perfect opportunity to start their own business. For some the lure of being their own boss is tempting, with more and more people opting to leave the confines of employment to attempt their very own venture. There is a lot to consider if you head down this route. Knowing where to begin is perhaps the most difficult and daunting. “If you’re an entrepreneur and want to start a business, start small,” says Theo Paphitis (theopaphitis.com), successful businessman and panellist on the hit BBC show Dragon’s Den.
Commitment and motivation are two of the biggest drives to making a business work, as you’ve got to be prepared to put the time in and graft yourself. “...'what are you putting into this?' So many people say to me, 'I'll do this part time'. Well, I've never met a successful part-time entrepreneur,” says James Caan (blogs.iod.com/2012/08/17/start-your-business-james-caans-top-10-tips/), entrepreneur and former Dragon’s Den panellist who sat alongside Paphitis.
Starting your own small business requires good planning from the offset in order to fully achieve your objective. Take a look at our round-up of all the things you should consider to best prepare for the road ahead...
Be Clear About Your Business Idea
- Research, research, research! Seeking advice, from someone you trust or with organisations such as the Citizen Advice Bureau and the http://www.hmrc.gov.uk/startingup/ workshops, is a great way of evaluating and developing your idea further. Sometimes just one piece of valuable advice is all the momentum you need.
- Target market: who are you aiming to market to and why? Understanding your target market sounds like an obvious suggestion, but you’ll be surprised as to how many people just plough in there without a strong idea of their core market and before testing the water first. “The mistake that frustrates me most is people spending far too much time perfecting the idea and not enough testing it with the market,” says Caan.
- Select a suitable business name that is appropriate for your business model and offers something unique to the industry you’re stepping into. Whilst you might be entering into a competitive market, the way you present yourself will pay dividends.
Location, Location, Location
- Sourcing a good location to establish your business can be a struggle. For some, working from home or running an online business provides a simple solution, but finding an office or premises is no mean feat. Whilst finding the right location, with the right environment is important you needn’t let it overshadow your overall business plan and idea process.
- Register your company name by contacting the HMRC to inform them that you are either a sole trader, setting up a business partnership or that you wish to register as a limited company. If you’re setting-up an online business, don’t forget to check the domain availability of your chosen company name.
Solo Project or Team Effort?
- Are you going to do it alone? Would seeking a co-founder to share the responsibilities be beneficial to you? It may be worth finding someone who has a different skill-set to you, to help balance one another out.
- Are you prepared to manage a team of people? To successfully run your business you’ll require patience, order and control. Are these attributes you possess, or will you need to recruit someone for the role? Do you even require a team of people or is this a solo enterprise? ...just because you have a good business idea that looks like it’s going to work, it doesn’t mean you’ve suddenly acquired staff-management skills,” says Paphitis.
What are my financial targets?
- Are you able to fund the initial outlay of the business yourself or will you need to seek financial support? Why not consider the option of pitching to investors for funding? Business Angels, Dragon’s of the business world, offer investment opportunity for start-ups seeking financial aid. Business and Enterprise Minister Mark Prisk said: “Business angels play a crucial role in supporting new and growing businesses...”
- “The variety of businesses that are receiving this funding reveals the range of skills and exciting opportunities that are being created today. It is absolutely critical that ambitious small firms can access the finance that they need to expand and grow.” (http://news.bis.gov.uk/)
- Accounting and tax: make sure you have registered with the HMRC and are equipped to do your own accounts. If you are able to, financially, it might be beneficial for you to hire an accountant. By deciding on the legal structure of the business and who will be responsible for the money side, you can ensure that the business finances are correctly managed.
Preparation: From Paperwork to Planning
- In the initial period before your business launch you should work on your financial planning, write both a business and marketing plan along with a break-even analysis so you are aware of your profit/loss forecast and cash-flow.
- A business plan helps you better understand your business, brings clarity and order so that you can turn your seed of an idea into a viable business. “Your business plan journey should traverse the seven Cs: a good plan is clear, crisp, concise, consistent, coherent and credible. But above all it is convincing, particularly in its assessment of risk. Its raison d'être is to convince your backer. Remember all seven Cs but especially the last,” says Vaughan Evans, author of FT Essential Guide to Writing a Business Plan: How to Win Backing to Start Up or Grow Your Business.
- Prepare paperwork such as insurance, permits, and licenses for both your business and product/service. Does your idea need copyrighting? Do you need a patent for your product? Consider all the legality involved, as it is often forgotten about. Starting a business comes with a considerable amount of administration. Get a better perspective of all sides of the business – don’t put off what needs to be done. At the beginning, the prospect of all that paperwork, filling and administration might be somewhat daunting but once you get there, the hard work will pay off with the reward of a professional business.
- Contingency plan: obstacles and setbacks will rear their ugly heads, how you overcome them is fundamental to whether you ultimately succeed or not.