Essentials to Starting Your Business

Introduction

Setting up a business for the first time involves a number of important steps. Some are required and some are optional. However as the old saying goes... "you reap what you sow", so the more work and effort you put in at the beginning, the better chance you have of making a success of your venture.

An important point to remember is that there will always be an element of trial and error in starting up any business.

Also…you WILL make mistakes. Don’t worry about it! Learn from your mistakes and move on.

Before You Start

Setting up a business is a time consuming task - you need to be dedicated and focused, and able to manage your time in order to be successful. The rewards of starting up your own business can be huge, but you need to think carefully whether you have the attributes and right sort of personality to cope with going it alone.

For example, do you have the discipline to go to ‘work’ everyday, even though you have no boss? Discipline will be a key factor in the long term success of your business, and to what extent you are successful.

It is vital that you sit down and write a business plan (or have one written for you), before you do anything. In practice these are used when seeking new funding from the bank or investors and are a requirement in most cases.

However, even if you do not require any kind of outside loan or investment for your new venture, it is very important to get your thoughts & ideas down on paper. It will help you to focus on the short-term and long-term goals for your business.

Even if you never consult your business plan again, it's amazing how many thoughts and ideas can evolve if you put all your thoughts down on paper in a structured format

Business Start-Up Checklist

1) Why are you starting your business?

You need to have a clear idea about WHY you are starting your business. Write down WHY in as much detail as you can.

Don’t just write "to make some money" or "to earn a living". How much money do you want to make? By what date do you want to make this money? What will you do with the money? 

Write until you think you've get everything down. You cannot write too much here. The more detail you can put down the better!

Every reason you can come up with here as to why you want to start your business will give you the motivation to come through the tough times which lay ahead.

This is an important document so keep it safe and review it regularly, especially in the early days.

2) Skills

Identify your skills and particularly your weaknesses. Be as honest as you can with yourself and ask trusted friends and colleagues for input. Be careful of asking close family members about your weaknesses for obvious reasons.

If you are less hot in certain areas, hire people with the necessary skills or seek professional advice.

3) Marketplace

It seems obvious but you need to make sure there are buyers or users for the product or service you intend to sell.

It would be pointless setting up a business if there are no customers to serve or buy from you.

You can have the best premises, product, employees etc. but if there are no customers then you won’t be in business for very long

4) Competition

It goes without saying that you need to know who your competitors are, and you need to research the competitors in your chosen industry. As before the more research you can do & information you can get at this stage the better

For each competitor in your chosen industry you must at least look at the following basic characteristics:

• Strengths & Weaknesses
  
  
• Product lines
  
  
• Ability to source &/or develop New Products
  
  
• The customers they serve & the share of the market they have which you are trying to attract

It is also important to remember that competitors may not sell the exact same product or service as you. You need to think about competition more in terms of the customers they serve, and the income they are competing for.

For Example

A car manufacturer will consider other car manufacturers to be their competition. They may also consider their competition to be motorbike manufacturers, bicycle manufacturers and providers of public transport.

It is very important to differentiate yourself from the competition so that you appear to be offering something different. Try to focus on one aspect of your product or service and strive to do this one thing better than anyone else. This will be your 'Unique Selling Proposition' or USP. You can then market yourself on this basis.

One final thing – try not to use price only to differentiate yourself from your competition, unless you can offer exactly the same quality service/product at a lower price.

Trying to be the cheapest in the marketplace is not always the best idea, since it only takes one person or business to offer your product or service cheaper than you do, and you're out of business!

5) Company Structure

There are 3 basic options when deciding how to structure your business. Each structure brings with it administrative responsibilities and will throw up important tax and accounting issues.

For more information click the links below for further information on the basic structures:

Sole Trader

Partnership

Limited Company

We can provide you with more specific information related to your individual circumstances and advise you which route to take. Fill in our Instant Enquiry Form now.

6) Raising Funds

Even if you have the best idea in the world, you are unlikely to make a killing instantly.

Costs can be high when the business starts. Be conservative with your funding estimates and either save enough money to keep you going while the business goes through its early months, or present your bank manager with a well thought out business plan and ask for sufficient start-up funds.

7) Business Plan

It is vital that you sit down and write a business plan, before you do anything (or have one written for you). In practice these are used when seeking new funding from the bank or investors and are a requirement in these cases.

However, even if you do not require any kind of external loan or investment for your new venture, it is very important that you get your thoughts & ideas down on paper. It will help you to focus on the short-term and long-term goals for your business.

Even if you never consult your business plan again, it is amazing how many thoughts and ideas can evolve if you put all your thoughts down on paper in a structured format.

8) Staff

As your business grows, you may need to hire people to manage certain aspects of your operation. You need to ensure they have the right skills for the job and also that they compliment the skills you bring to the business.

Above all, you need to be able to "click" on a personal level with the people you work with.

9) Seek Professional Advice

When running your business, a short meeting with a trusted adviser (accountant, lawyer, business adviser) can make a huge difference to both your confidence & the overall success of your business

Before hiring any professional, you should visit several to compare the services they offer, and you should base your decision on all factors.

10) Biggest causes of failure

The biggest causes of failure for start ups are:

• Not researching your market thoroughly
  
  
• Not collecting monies owed to you on time
  
  
• Not having a back-up plan for hard times
  
  
• Large Overheads

Review your position in relation to these factors on a weekly or fortnightly basis for at least the first 2 years.