Whether you’re a busy mum or a budding entrepreneur, having the confidence to take the leap of faith and start your own business can be difficult. No matter where you are looking to compete, even if it is in the food, retail or business services sector, a little bit of advice is always handy.
This is even truer when you are starting up a business for the first time and just need that little helping hand, nudge or push in the right direction.
Research your niche
Firstly you need to test your new business idea with potential customers to check if there’s a real demand for what you’re planning to sell – otherwise you’re business idea may be a flop. By doing so, you are able to find out about any problems your product or service may have, allowing you to fix them before you’ve wasted too much time and money.
Develop and plan
You need to develop your idea based on your customers’ needs, found out from customer research including the above. By piloting your idea to them, you will be able to deal with any problems found with your product or service including; how are you going to produce, sell and promote it. Keep testing your ideas until you are completely confident in that there is a customer market for your product/service and that you are meeting the needs of those who you will be purchasing it.
Setting up your business
Something you need to consider is the legal structure of the market you wish to operate within, is it right for your business and before you start trading, do you need to register? You must be clear in understanding the risks and benefits before setting up your company as a sole trader limited company or partnership. You must do your research before you commit to signing any contracts.
Questions you should think about asking are; what is the amount of financial risk you’re taking on, how do you need to pay your tax and report to HM Revenue and Customs, is this different for different partnerships? How much control will you have over how you run your business?
Bear in mind that you will need extra help or people with specific skills to run your business; you might decide to take on employees. Discover all your legal responsibilities as an employer including paying tax and insurance before you start employing staff, as this could affect how many people you are able to employ and under what salary. Remember you will need to register as an employer with HMRC if you want to start employing people, even if you’re a sole trader. Whether you are starting off like me in my garden shed or you are in the financial position to go straight into an office, you need to keep in mind that you will need different skills for different roles and, if you decide to take on staff, you will need to be able to delegate responsibilities and manage your workers.
Sorting out your money
When you start a business there’ll usually be period when you’re investing lots of time, energy and cash before you start making a turnover. It’s imperative to examine your market to make sure your customers will really pay for your product or service before you take out a big bank loan or invest your life savings. Once you feel positive that they will, you should investigate sources of funding to help with the costs of starting up your business – from fundraisers to investors and selling shares there is always a way to get your business off the ground, you just have to find the right approach for you.
If you require some initial funding to test and develop your business idea you might be able to get help from a government-backed support scheme. Take a look at the government website for more information.
Get a bank loan
Another option for you in terms of finance, once you can show that there’s a marketplace for your idea, is getting a bank loan. You will need to be able to prove the following things in order to be considered:
- Provide the bank with realistic cash flow forecasts for the foreseeable future
- Prove you will be able to pay back the loan with interest within the set period of time that is offered
The bank might require you to supply security against your loan by using some of you own assets like your house or car, however this is just a formality and a precaution in case you don’t repay.
Before you start trading you ought to think cautiously about how much risk you’re willing to take on, whether you are setting up your own display company that sells feather flags and banners or you are going to offer a deep cleaning service to all commercial clients, whatever you choose you must have a strategic plan, realistic aims and funds as a back-up.
Bio: Karen is an entrepreneur and experience business woman with two highly successful businesses. When she is not running them from her office, she likes to spread her wealth of knowledge to others.