If you’re at the stage where you’re considering starting up your own business, it can feel a mixture of pure excitement and dreading the unknown. There can be many pitfalls that can catch you out, so here are some tips to think about before you spend a single penny of your hard earned cash or redundancy.
Do your research
You want to make sure you understand the industry you’ll be involved in so you can make an impact on the competition. No matter how unique you might think your business idea is, you should be aware of potential competitors. If you can’t offer something better and/or cheaper than your competitors, then you might want to rethink starting a business in that area that has already been commanded.
Consider your target demographic and whether your consumers are going to buy into your product. As obvious as it sounds, without them, your business will not be viable.
Compile a business plan
It goes without saying that every business worth its salt should start with a business plan being drawn up. It doesn’t matter if you are raising thousands of pounds or just taking a loan from your parents, you will still need to make sure no one is wasting their money on a bad idea to start with. Writing a business plan will help you determine how much cash flow you need to start and how much you can expect in the future.
Start up costs
First things first, you need to be realistic with how much your startup will cost to get off the ground. This will very much depend on the type of business that you are going into and in some cases, the costs can be minimal. You need to consider financing right away. It can be intimidating to focus on money, but going through the numbers at the start will literally pay dividends later. In some cases, you need very little overhead and can get by without taking a loan. If your business requires a bigger investment, be sure to create all legal documents necessary to protect investors and yourself.
If you already have a career and are branching out on your own, such as a consulting role, then you are already set up to go to a degree. However, if you’re heading up a new venture such as a shop or a restaurant, then your initial outlay costs of shop fittings and equipment will take a fair chunk of your money.
Develop your plans whilst still employed
If at all possible, then start up your new business while still in your current job. Try not to quit your job and then work on your business. If you want to start, ensure you have all your plans ready and a place in mind. Many people quit their jobs and then start to develop their plans. This can cost you about six months with no revenue because there is always something to slow you down whether it be the bank not lending to you or government red tape. If you can start earning whilst you already have a steady job then you can test your idea before losing that (almost) guaranteed income.
Understand compliance and legal documents
The next factor that needs to be considered is the completion of legal documents. For the sale of some specific products and services, there are some requirements for the preparation of legal documents. Make sure you have already done all the legal documentations for your business and that you understand compliance, regulation, data protection in order for your business to operate successfully. Your line of work is likely to be governed by laws, rules and regulations. Whether it’s requirements for indemnity or liability insurance, a licence to operate or professional standards to meet, you need to be fully prepared. It’s always a good idea to seek the services of professionals who can help, like a company such as Scott Robert.
Sort out your admin
When you start your own business, you go from being a cog in the machine to the master engineer that keeps it all running. Put systems in place from the start to deal with time-consuming admin tasks, so they don’t distract you from your objectives and where you want to be heading. You could consider a digital assistant or installing time management and invoicing software, so that you can keep on top of your invoices, as well as being able to keep everything in check for when you give all of your accounting details to your accountant once a year.
Find your premises
Every business needs a base and many home-based businesses can operate perfectly well out of a home office or even a garage. If this isn’t an option for your venture, then there are other options to consider as well. Many places offer virtual offices, which give you an official address, accept mail, provide printing, and offer rooms for to let.
Consider how you’ll manage people
Many first-time and new business owners have never had any experience managing people. Learning how to manage people is an art, and it is essential to the success of every business. Fortunately, there is plenty of great advice on management, you just need to know where to look.
Your local recruitment agencies can help you avoid basic mistakes and even connect you with employees who are a good fit for your vision. Read books by successful entrepreneurs and management specialists, and don’t forget to seek advice from others who are knowledgeable.
Understand the risks
When you’ve been through everything else, it goes without saying that there will always be a level of risk with a new business venture. Calculating, understanding and planning for risk is an important step to take before you start working on your business. This means assessing your industry’s risks before moving forward with your business plan. Once you’ve determined how your business could be affected by risk, consider how the new business will acquire funding once you’re up and running.
*this is a collaborative post