So you have an idea, or maybe even a few, and you think you could make a legitimate business out of them. Rest assured, nowadays, it is easier and more accessible than ever before to start your own business. However, with the idea of starting a business comes an array of questions. What do I need to create a business? How do I brand a business? What is even the first step to starting all of this?
The truth is that there is quite a bit to figure out and to sort through, but it isn’t impossible, and thankfully, we have written this guide to help you through it.
Step 1 – Perfect your idea
Of course, every great business or company starts with a great idea. It is relatively easy to come up with a business idea per se, but it needs to be workable as well as inspiring for it to be a success. Naturally, you will want your business to last for as long as possible and to have the capacity to grow over time. This can only happen if the right foundations are there, i.e., if you have a feasible idea to start with.
If your idea isn’t something completely new and ground breaking, then it should be something that solves a problem. Ask yourself these questions: Why does my client need my product? What purpose does it serve? Will it make their lives easier and/or better in any way?
If you cannot answer any of these, then it may be time to revisit the drawing board! If, on the other hand, you think that your product is something valuable that could help a large number of people and that it truly is something that people would want to invest in, then you might just have a starter. It’s time to get moving.
Step 2 – Make a business plan
Now that you have a winning idea in motion, it’s time to make a business plan. For many of us, seeing the term ‘business plan’ can bring up a bit of anxiety and sometimes even panic. It can seem a little impossible, especially if you have no prior experience in running any kind of firm.
In actual fact, making a business plan is not that complicated. It will require you to sit down with a laptop, tablet, or even a pen and paper and just to answer a few simple questions, such as:
- Why have I started this business?
- Who is my target audience?
- What expenses will I need to pay to start the business?
- How can I finance these expenses?
- Where do I envisage my business going?
It is also essential to consider what will happen if the business hits hard times or even fails. No one likes thinking about their dream failing, but it is always wise to have a few backup plans, just in case. No successful company or business has ever made it big without failing a few times, and your business will likely go through its fair share of ups and downs. That is why it is essential to be prepared for these times to be able to ensure the longevity of the business.
Step 3 – Consider your financial situation
Whatever kind of business you are starting, it will need a budget. Even low-cost start-ups need to assess their finances in order to be able to declare what they are spending, how they are spending it, and how the revenue compares to the expenses.
The first thing that you will need to ask yourself regarding the money is whether or not you have the money to start the business. Do you need a loan? In that case, you need to properly assess how much exactly you will need to borrow and for how long.
If you need to go to a bank for a loan, then presenting them with a proper business plan and a detailed example of what exactly you will be spending the money on and how, will help you a great deal. No bank wants to deal with unprofessional people, and an unpolished presentation will not help your cause.
If, however, you think that you have enough money set aside of your own to start up your business, then you will have to take a hard look at your savings. Is there actually enough to start the business? Is there enough for you to live off of if the business takes a while to become profitable?
In many cases, the first year of business is not very profitable for the owner, as most of the income has to go into the start-up expenses and to repay loans. Therefore, it is important to remember yourself and your own daily costs in the thought process.
While you are considering the money that you will make in your first year, it would also be a good idea to check to see if the revenue that you envisage making with your business will actually bring you a substantial profit. It is all well and good being able to cover the costs of the business, but you do need to be able to make a living out of it. If the business cannot provide that, then you may need to start over.
Hopefully, you will gain more profit than you ever initially anticipated; however, it is always best to prepare for the worst in business. So, if your business does not go as well as you hope, what is the very least that you could gain back on it?
On the bright side, anything more that you make will be a welcome profit and a happy surprise!
You may also like: 7 ways to finance your business.
Step 4 – Research the tax that you will need to pay
Every business has accounting and tax information that needs to be handed over to the government, no matter how big or small they are.
In the UK, start-up businesses are entitled to a tax-free allowance; however, every business must register with HMRC or Companies House following receipt.
Knowing the amount of money that you will owe in tax, where it should be paid, and how, will depend on whether you are a sole trader, a limited company, and whether you are self-employed or not.
It can take some time to figure this all out, and if you can afford it, it can be beneficial to hire a tax advisor. If you can’t afford that kind of expense just yet, then you will simply need to take the time to look at relevant GOV UK website information and make the assessment for yourself.
Step 5 – Register your business
When it comes to registering your business, it is essential to identify what type of firm you are running. You must choose between:
- A sole trader: Sole traders own and run their own businesses by themselves. It is one person running the show at all times and has specific accounting requirements.
- A limited company: In a limited company, the owners’ finances are considered to be separate from that of the business’.
- A partnership: In a partnership, two or more partners share in the responsibility for the business’ expenses and debts.
Step 6 – Get business insurance
Many of us tend to forget this as an expense, but all entrepreneurs need to have business insurance. The type of insurance that you will need will depend on a few things:
- Is your business online, or does it have a shop, a warehouse, a factory, etc.?
- Do customers come to you, or do you go to them?
- Do you have any employees?
- Do you need healthcare coverage for just you or employees, too?
There is a wide range of business insurance policies to look into, all of which deserve to be fully considered before making any long-term agreements. It would also be beneficial to look into the costs of these insurances as you set up your finances.
Step 7 – Look at advertisement strategies
Now that your business is set up, it is time to start advertising and actively marketing your product.
There are so many ways to advertise yourself and your business today, some of which are free. For example, in order to keep the costs down, you could look into investing time to improve your SEO (Search Engine Optimisation).
Another (mostly) free method of advertisement is social media. This will also help you to reach your specific audience and will allow you to manage the image that your brand has online.
Of course, running a business is never as cut and dried as it may seem initially. You have a long but likely fruitful road ahead of you! It makes sense to reach out to a leading marketing team, too, who can help you get your brand out to the right people.