"In the midst of chaos there is always opportunity" Is starting a business is right for you?
Coming up with an idea and starting a business can seem overwhelming and complicated. The scope and opportunity is everything and nothing all at the same time. There are so many things you have to consider from coming up with an exceptional idea to registering a company, as well as research, business planning, fundraising and much more.
When you order a sandwich, the transaction is usually quite simple. You order, pay and wait until your order is ready. Simple! However, this is the end result of a process which is well beyond what the consumer encounters. It is only a fraction of the bigger picture.
That is why we have put together this guide to help you consider whether you’ve got what it takes to start a business.
You Have to Work on the Business before it Works For You
Starting your own business is a process that requires an enormous amount of thought and careful examination. It is important to understand why you are starting a business. Being your own boss can sound like ‘the dream’ and many people who take the plunge are glad they’ve done it but the majority also state it’s harder work than they thought.
Do you have the characteristics of an entrepreneur? Perseverance, a strong desire to take initiative, self-resilience, a success-driven mindset, self- confidence and the ability to lead? You will need to be a great communicator as running a business involves a lot of networking, negotiating and managing. You need to take a conscious look at your strengths, weaknesses, passions and skills. This allows you to start thinking about what you can and can’t do.
You need to consider what you want from the business so that you can focus on business ideas that will help you get to where you want to be. If your reason for starting a business is to spend more time with your family, then opening a restaurant is probably not going to help you achieve that. Ask yourself, “What do I want to achieve?”. It is essential to define your realistically attainable goals and objectives early on – then, return to them often - as they can help steady your balance if you begin to swerve off track.
Start by figuring out what business or areas of business you are or could be passionate about. Start by researching the things that interest you. What activities do you enjoy? What values motivate you? What do you have strong opinions on? Explore as many ideas as possible before deciding on the final one you will take forward.
You will be spending a lot of your time on this project, so make sure that it’s something you absolutely want and love to do. Often the only difference between an entrepreneur who starts a successful business and an entrepreneur who fails is passion. It is the passion for the concept that will get you through the darker times when it feels like you’re walking through treacle!
The last and possibly most important aspect to think about is, can you afford it? Have you made allowances for gaps in pay? Even if you plan to raise capital from a broker you will probably still invest a significant amount of your own money, which you may not get back if things don’t work out as expected.
Ideas Can Be Life Changing
Coming up with a business idea is the easy part, coming up with a great business idea can be challenging. Refine your initial idea by asking yourself these questions:
* What significant problems or pain point does your product or service solve?
* Is there something that could be life changing or highly useful for a given purpose?
* Is there a process that needs fixing or simplified?
* What will set you apart from your competitors? Will you offer savings or better value?
* Try to think into the future, what will the world look like in 5-10 years?
Once you have asked yourself these questions, do your market research. 42% of businesses fail because there is no market need. To prevent this, you will need to make sure that your idea has the potential to succeed by understanding where and how it fits in the market. An internet search is a good starting point, but you will also want to go more in depth and gather first hand feedback from focus groups and audience surveys. Take your time to understand if there is a gap, whether it’s already been filled, and if so, how can you do it better? You should have a clear idea of who your potential customers are. Having a good understanding of how you would reach your potential clients and grow your market is critical to success.
A Goal without a Plan is Just a Wish
After you have set your goals and visualised what it is you want to accomplish, devise a business plan to organise and streamline your ideas. This can be used to attract potential clients, investors and banks and also to help you realise that this is the start of something very real in order to keep you focused. Great planning from the start can be the difference between a business that is successful and well executed and a business that fails due to unforeseen issues and ‘winging’ it.
Your business plan should include key elements and follow a simple and clear structure. Always aim to create a business plan that anyone could pick up and understand what your business is, what the objectives are and how you are planning to get there. Use clear headers to map out your plan and be concise.
Introduction: An executive summary to introduce your plan, its content, and a clear, concise overview of what your business is and what you are trying to do.
Contents page: The reader of your plan may want to skip to specific parts that interest them.
Research - market, competition & audience: This needs to show a clear understanding of your ideal client, the market for your project, service or solution and an understanding of the competitive landscape. The more thorough your research the better informed your business model will be.
Business model: Here you need to outline your business model and what the products, services and solutions you provide. A popular model is known as the 4P’s; Product, Price, Placement & Promotion.
Marketing and sales: This section is about demonstrating a clear plan from marketing and sales perspective, as to how you intend to achieve your targets. Where can you find your target audience and how can you appeal to them?
Finances: You want to show your current finances and any projections you have for the business moving forward. Always be realistic with your figures!
Team: Include a sort section about your team , who they are, their qualifications and what they do. Staffing can be a huge expenditure so it is important that every person has value.
Summary: This section should summarise your entire business plan through key points in bullet point format.
Register your name and make it official
It is important to ensure all the legal and formal paperwork is complete before you take your business out into the world.
There are different types of legal structures you can choose from when setting up a business. Once you have a business name, you will need to decide the structure of your business & register for your business unique tax reference with companies house.
The most common structures for small businesses are:
Sole trader: Business type where one person owns and runs the entire business. It is the simplest structure you could adopt. Being a sole trader means the individual is entitled to all earnings, but also liable for any debt/damages.
Limited company: A structure that means a business is a separate entity from its owners. This means the owners are only liable for any business debts to the extent of the amount they have put into the business.
Private limited company (LTD): In a private limited company, the owners privately hold shares. This is the most common and preferred incorporation structure for small businesses.
Look after the Pennies
Your business plan should be supported by a clear budgetary proposal. How much money do you need? This is not something you can simply stick your finger in the air and hope for the best. The most successful businesses have clearly defined spending breakdowns and plan their budget, including a contingency, even before they spend a penny.
Open a dedicated business bank account. You will need to have a separate bank account to your personal one and business accounts offer specific support to business owners. If you need to raise finance there are a number of strategies available to you and your bank account manager will be a good place to start. Depending on your age and sector there are a number of options that may include crowdfunding, grants and loans.
You will need to regulate your finances through the business account, clear budgeting and by keeping track of your income and expenses against your budget so that you can reevaluate. This is both to understand how much money is coming in and out, and to be able to pay your obligatory taxes.
Something else to look into is small business insurance which can be a lifeline that provides much needed financial and legal support when the unexpected happens.
How do you Want the World to See You?
Your logo will be one of the most memorable parts of your business, so make sure you get it right. You will want to make sure that all of your other assets are aligned and fit in with your style of your brand. You should also consider where your logo is going to be seen (including digital platforms) and ensure that the design works. If you get a specialist to do this for you ensure that they present you with clear brand guidelines so that you can continue a ‘house’ style across all forms of communication.
Your promotion may start long before you begin trading. Depending on your product or service you may want to build the hype ready for a strong launch. Let people know about your brand and what you are going to provide. Let your audience share in your story. This can be done effectively through social media platforms and they are a great way to build relationships with your potential customers. Make sure that you pick platforms where your customers are likely to be and tailor the content to fit. Keep the tone friendly and upbeat - remember that when using social media people typically have a short attention span as they are filling moments in time. Save the details for your website.
Building a business website is an absolute must in this day and age. It is your digital shop front and a way of customers finding you even when you’re closed. Design should be clean and clear and fully optimised for mobile use. Whether you’re an online business or a physical store your website needs to have a clear SEO strategy to increase your position in search. Depending on your sector, search engine ads are a great way of reaching customers who are already looking for your services.
Your website is a great place for informing your customers about your brand, your values and what it is you do. This is where people come to find out more about your product or service and they need to know how to find you - so make sure you have done your digital business listings!
You should consider a professional email address where prospective customers and external parties can reach you. Having a business branded email address is critical to creating trust and is a general standard for most businesses in the UK.
People want businesses to be relatable, and these services allow you to do that so don’t try to blind them with science and formal business speak - just talk to your customers, keep it relevant and don’t forget to... listen.
Starting a business can be daunting, much like parenthood, it will put you under an awful lot of strain emotionally and financially but I couldn’t imagine living without them!