How to Start a Business
Starting a business might seem like a scary thought, especially when many new businesses fail within the first five years of trading.
However, it has never been easier to set up your business, and more and more people are deciding to become their own boss; there were a record 5.7 million private sectors businesses at the start of 2017!
If you are willing to take the plunge and become your own boss, here are four steps to help you get started:
Step 1: Carry out research
For you to be reading this, it is likely that you already have a business idea in mind. You may be looking to turn a hobby into a money-making business, or even provide consumers with a product they are crying out for to solve a simple day-to- day task. Either way, the idea is just the beginning.
If you want your small business to be successful, it will need to solve a problem, fulfil a need, or offer something that the market wants. Does your business idea achieve any of these? One of the best ways to find out is by carrying out market research.
Whilst you explore the market, these are some of the questions you should be asking yourself.
- Does anyone need my product?
- Are there other companies already offering a similar service?
- How strong is the competition?
- How will my business fit into the market?
Step 2: Make a business plan
You need a well-researched business plan to have the best possible chance of turning your business into a reality. The business plan will guide you from the moment your business enters the start-up phase, through to establishment and business growth.
Where investment is concerned, a well-written and detailed business plan has a major impact on securing the cash flow injection you are looking for. The business plan gives investors the information they need to validate your business idea and potential. If investors like the look of your idea, and can easily identify the opportunities, it is likely they will provide you with the capital you are looking for.
However, if a cash injection is not what you are after, then a simple business plan will serve you just fine. It will provide you with clarity about what you want to achieve and how you are going to do it, whilst providing you with a sense of direction. It is a much safer option than having no plan in place and provides you with a higher chance of success.
Step 3: Finances
As part of the business planning stage, it is important to consider the amount of start-up capital you need to get your idea off the ground. For small-scale businesses, a spreadsheet which estimates start-up costs and a 12-month forecast is vital to give you an idea on what investment is needed. Some of the one-time start-up costs may include: market research, branding and marketing costs, equipment, legal fees, insurance, inventory, and property leases. In your 12 month forecast you will include running costs such as rent, utilities, ongoing marketing and advertising, production, supplies, employee salaries, etc.
Step 4: Pick and Register your new Business Name
The type of name you will choose will reflect the type of business you are. When it comes to your business name, think carefully for both legal and marketing purposes.
A quick check with the Companies House and the Intellectual Property Office will tell you whether your company name is already in use. If it isn’t the next step would be to get it registered. You may also wish to register your company domain name at this stage.
These four steps will help you get started in turning your idea into a business. Our start-up accountants are here to help you through your start-up journey; from business plans to financial forecasts and registering your company. Contact us today for a free no obligation consultation.