This year around half a million people in the UK will set up their own businesses. If you’re tempted to join their ranks, these ten tips will help make sure your new business goes with a bang, not with a whimper.
Napoleon famously described us as a “nation of shopkeepers” – and he wasn’t being rude, apparently. He actually admired our commercial instincts, and it was trade (backed by a hefty navy) that built the Britain he knew then and we know today.
Those commercial instincts are still there for all to see: according to the campaign group StartUp Britain, the number of new businesses started in 2012 reached 484,224 – a massive 10 per cent up on 2011.
And it seems that even more of us hanker to follow their example. Figures released last year by the Global Entrepreneurship Monitor reveal that a staggering 20 per cent of the working age population “either expected to start a business in the next three years, were actively trying to start a business, or were running their own business.”
Of course, there could be factors driving your desire to plough your own furrow – not least a turgid economy and high unemployment – and you might think you have nothing to lose by going it alone. But in reality this is unlikely – unless you are fully prepared, there’s always something to lose.
So if you’re one of those looking to make a go of it, what are the key things to consider? The overarching piece of advice is to do something you enjoy, but combine that with a hard-headed business approach.
1. Your heart needs to be in it
Sounds obvious, but the (not so) secret of success is passion. If you really care about gardening, plastering, auditing, making pasties… whatever floats your boat… all the hard miles you put in getting your business off the ground won’t seem quite so tiresome.
2. Offer a quality product or service
It also helps being good at what you want to do – whatever field you go into it’s likely to be very crowded, so stand out from that crowd. A “USP” or “Unique Selling Proposition” helps, while many people are prepared to pay for quality.
3. Do your research
Look at your potential rivals and assess their “offer” and how they make it work. Learn from what they do well – and badly. Try out your idea, product or service with friends and family and ask them what they’d be prepared to pay for it. Then ask yourself: could I actually make a living out of this?
4. Write your business plan
Start writing, planning and calculating. Will you need premises, transport, support staff? What will your cash flow look like? This might be the time to get financial and business advice, and there’s plenty out there – not least from local organisations there to help people like you. Google “starting a business in (your town)” and you’ll be surprised what comes up. A solid accountant or small business advisor might prove their weight in gold.
5. Make sure you have all the skills you need
You might be the world’s best electrician or florist, but your business may need supplementary skills that you haven’t got – those of a bookkeeper, marketer or sales person for instance. These might be bought in on a part time or results basis.
6. Get your finance in place
If you need capital to get off the ground and grow, there are options apart from the bank – although if you have a good relationship with them, it’s a very good place to start. If you’ve got something really interesting, there are sources of investment finance (think “Dragon’s Den”, but not so scary) where people buy into your business in return for a stake or a share in future profits. Whichever direction you go in, you’ll need a credible business plan.Other options include grants (hard to get but nothing to pay back). If your venture has an element of helping others, or if you prefer to go down the ‘not for profit’ route (so you take out a reasonable salary but plough back any profits) consider being a Community Interest Company. This model will certainly help you win grants and support from different directions, even if you’ll never become a millionaire!
7. Sort out your marketing
This is absolutely vital. At the very least you’ll need a website where you can set out your stall and possibly even sell on line. If you don’t have a big budget, consider the cheapest options: harnessing social media (Linked In, Twitter, Facebook); sending out press releases (remember journalists want a news angle, not just a ‘puff’); passing round well designed business cards and leaflets through friends and family.
8. Make sure you’re legal!
Certain businesses must be registered with appropriate authorities (food vendors, care providers for example) and for some trades you will need to be appropriately qualified or part of a trade association. Depending on whether you’re going to be a sole trader or limited company, you’ll also need to register with Companies House and HMRC.
9. Get insured
You might overlook it, but failing to have business insurance in place could see you fall at the very first hurdle if someone gets hurt as a result of your work (it could be the products you supply or your services) and heavy damages are awarded against you. It might seem like an unnecessary cost in the early stages of setting up, but in some instances business insurance is a legal requirement – you wouldn’t drive without insurance, so make sure your business insurance is in place right from the start.
10. Join local networks
If you have a product, skill or service that complements others, think of joining a local business or traders network… people who might refer you to their customers in return for you doing the same with yours.
Still interested? Good. Our country needs enthusiastic entrepreneurs like you!
Two references if needed:
Start Up Britain:
Global Entrepreneurship Monitor: