If lockdown, social distancing and isolation has given almost all of us, it’s more time. We probably never felt we would end up with as much time on our hands as we have.
With the rush to the internet to look for new hobbies and ways to fill our time, there are some right now using this time to find out how to start a business.
Many of us dreamed about that day we would get some spare time on our hands to look towards becoming self-sufficient, quit the rat race, hand in our notice and become an entrepreneur. It’s not too late to start.
If though you want to be your own boss and create a start-up business for yourself and your future, it’s essential to not just rush in, but plan ahead. You need to look at you as a person, as well as finances and your business idea.
Is your business idea possible, is there a demand and a market and more importantly can you make it profitable.
We’ve put together a checklist and a 7-step plan for you to follow:
Personal Assessment
Whenever anyone sets out to create their own business, they need to do their own personal assessment. It isn’t always possible to remain objectionable and impartial to do this for yourself, as the lean towards wanting to start your own business may be causing you to dismiss glaring obvious reasons why you should plan differently.
Asking a friend or family member who knows you well can help. You need a balance of positivity but with a dose of reality.
Almost everyone has the time to start their own business. Whether this waking at 5am instead of 7am and grabbing an hour or two early in the morning, or going to be at midnight rather than 10pm, and grabbing those two hours in the evening when family have gone to bed. It could be setting time for yourself and your future business at the weekend instead of going out.
You need to be regimented and possibly make personal sacrifices to things you enjoy in your day or week, but starting your own business will not be easy. Consider this your first challenge!
You need to take a look at you as a person to make sure you have the time (and if not what changes you need to make to gain more), the funds and capital and whether you are the type of person that can keep with a business start-up even when things become really challenging.
It’s not for the fainthearted but the benefits and rewards can be immense.
Research the Market and Write a Business Plan
Before starting any business, you must research, research, research and then, more research!
Starting your own business is not something you want to do on a hunch or a ‘gut feel’. You may think your new product is the best thing since sliced bread or salted caramel (sorry, personal favourite ? ) but if you are the only one to think so, and see your product or service through rose tinted glasses, it could be a costly assumption.
Trying to start a business selling something brand new, or provide a brand-new service, may seem ideal on paper but these are the most difficult businesses to start. You’re not just creating a business, but you also need to create a demand that may not be there already.
It’s much easier to start a business where the demand for the product or service is already there, and that there are one or two competitors in the market who have proven it’s possible to run a business in those niches or markets.
You need to be able to answer the following questions:
- Is there a current demand for the product or service I want to offer;
- Do I feel I could compete with my potential competitors and offer something they do not;
- Once I launched my business do I feel I could, quite efficiently, market or advertise to that market and audience;
If the answer is yes to all three questions, then it looks like the first hurdle has passed and this could be the making of a good business.
At this point you should start putting together a business plan. A business plan is pretty much as it sounds, it’s a concise plan of how you intend to go from idea to launch and how to grow when you do. It should cover the first 1-3 years of your startups launch.
If you’re unsure where to start the UK Government website has a number of free business plan templates for you to download as use as a guide.
There is a lot more to consider though, which we will talk about in the next steps.
Identify Ways to Fund Your Business
Even a business starting on a shoestring (i.e. as small an amount of money as possible) will still require some money to get started.
Even if you are offering a service that you can provide that costs you nothing to start – say a bookkeeping business – you will incur costs such as website design services, business name, business registration as a ltd company (if you are not going to trade as a sole-trader) and of course money to market and advertise your wares.
If you need some type of capital injection in order to get started on a bigger business, these are possible ways you could raise money for your business startup:
- Friends;
- Family;
- Investment from a venture capitalist or angel investor for a % of your business;
- Crowdfunding if you have something new to offer in the marketplace or a revolutionary way to do be a gamechanger in a big market and do things much better, with much lower costs or much more efficient;
- Government grant (if possible);
- Business loan (should be the last option to consider if you can’t raise the funds elsewhere);
Price Analysis
This is the part of the business plan that if not done right can end up causing you to lose a lot of money.
You need to do a thorough cost and price analysis. This sounds very technical but really it’s pretty straight forward.
You need to work out how much you can buy or manufacture a product for (your cost) – and how much you can sell your product for (your revenue).
Although you can then deduct your cost from your revenue to work out your profit – you need to also consider that your profit will reduce by all your extra costs like manufacturing, distribution, marketing, advertising, web design, overheads (rent, rates, utilities, fuel if driving etc…) and of course taxes.
This all needs to be factored in. You need to make sure you believe you can make enough profit from your sales to cover all your fixed and variable costs.
It’s worth create a spreadsheet using either Microsoft Excel or a free tool like Google Sheets to work this out.
Website, App and or Bricks and Mortar Store Considerations
In today’s digital world almost every business can positively benefit by being online. This could be by way of a simple social media presence which can be done for free – or having your own website, app or both.
Maybe your start-up business requires a business premises (bricks and mortar store as it’s known). If so, you’ll need to start looking at rent and rate fees.
Setting up a website, app or store is no small feat and takes careful preparation and meticulous planning.
It’s important to fully research all costs involved so you can factor this in to your business plan and price analysis. Underestimating any costs at this stage could be perilous.
It’s always best to edge towards the side of caution and overestimate costs, than underestimate.
Accounting, Tax and Legal Requirements
Unfortunately, we reach the boring section, but one of the most critical.
We all need to pay our taxes, and when running your own business you’re not an exception. If you decide to set up as a limited company there are rules and regulations to follow, especially when any costs (including your salary as you will be working for the business) – so it’s important to seek help from a qualified accountant.
If you are manufacturing and selling products there will be a range of standards and requirements to meet. These need to be thoroughly researched as any omissions now could be costly in the future.
Personal Growth
Throughout the process of launching a business many people forget about the most important element – themselves!
You need to grow and learn throughout the journey just like your business. If you are going to launch on a shoestring, it’s important to know you’re doing things right.
There are a number of courses available – such as the Start Your Own Online Business Course – which is available on Udemy, which can give you a great understanding or help you:
- Polish up on your skills on business name ideas, website considerations – and even a step by step guide on how to build your own website and save hundreds of pounds;
- Marketing online through social media like Facebook, Twitter, Pinterest and others;
- Advertising on Google through Google Ads;
- Get to the top of Google through search engine optimisation;
- Future business growth tools and ideas;
To get started check out the Start Your Own Business Online Course
