If you’re starting a new business for the first time, you should take every opportunity to give your new enterprise the best chance of success. Use these top business tips and advice to help your business succeed.
KEY TAKEAWAYS:
- The best way to start a business is to have passion for your project, preferably have customers identified and lined up for your business, and start when you have sufficient finance to tide you over until sales start coming in.
- Putting extra effort into the legal and tax issues upfront can save you headaches down the road.
- Writing a business plan backed by strong research to clarify your vision and attract bank finance or investors can be well worth the effort.
From our many years of experience, we have assisted and seen clients grow from very humble beginnings into successful businesses. We have put together our top six tips for setting up a business which we hope you find useful, especially if you have a great idea or product that you are thinking of turning into a business.
1. Be honest with Yourself
Deciding to start a business definitely isn’t for everyone. Before taking the leap, ask yourself a few simple questions: Are you prepared to work long hours? Do you want to manage a team of staff? Are you comfortable making difficult decisions? Are you able to motivate yourself? When the going gets tough, would you give up easily? If you’re willing to do the above and so much more, go for it!
2. Do Your Research
Before you invest your hard-earned money into any business you will need to research your product and its market. From this research you will develop a feasibility study that will outline the following:
The Product/Service
- Customer Base
- Suppliers
- The Competition
- Pricing Strategy
- Marketing Strategy
The above feasibility study will enable you to determine if you:
a) Have a viable product
b) Have a market that needs or wants your product
c) Can compete in the existing market
d) Can afford to go ahead with your plan
Your business doesn’t necessarily have to be an original idea, but you need to offer something that people will want in order to stand out from your competitors.
3. Write a Business Plan
You may have the best idea, but a business is nothing without a plan! Set aside time to establish your goals and ambitions and think about how you’ll drive them forward.
It would be advisable to seek professional advice when drafting your business plan as it will be the main document that you will present to potential investors or to obtain bank finance, so you will need it to stand out.
A good business plan will include cashflows and financial projections which will outline your projected sales, costs and financial requirements for the first three years. When completing your projections remember to be realistic, wishful thinking can be counterproductive.
4. Financing your New Business
Now that you have completed your business plan, along with your cash flow and financial projections, you will be able to determine at what level your new business will break even and eventually achieve profits.
Startups can fail for a variety of reasons, but one of them is simply running out of money. Cash flow management is key. You need to manage your finances with a fine-tooth comb from the initial concept.
Research what financing options are available to you, there are still many small business loans and business grants available.
If managing money isn’t your strong suit, get an experienced accountant on board from the start to help guide you in cash flow management. Limit your fixed expenses at the start – you don’t need a trendy but costly office – operate thinly so that you can put all your capital into growth.
5. What Legal Structure will you take?
There are three main legal structures that you can take when setting up your business. The structure you decide upon will depend on the size of your business and your growth plans. Professional advice from either your accountant or solicitor when you are making a decision on which legal formats you would like to establish is again advisable. The options available are:
Sole Trader
Sole proprietorship is the simplest and least expensive legal structure for businesses with single owners. As a sole proprietor, you’re officially self-employed. That means you assume all the risks of your business, and are fully responsible for its legal, financial, and tax obligations.
Partnership
The legal structure of businesses with two or more owners is known as a partnership. Partners share the partnership’s earnings and losses and make all business decisions together.
A Limited Company
A limited company is a separate legal entity to its owners. Whilst the most complex structure of the three, there can be tax advantages of operating under this structure. The is also the added benefit of limited liability, whereby the personal assets of the business owner(s) are protected, should the company incur losses.
A professional advisor will advise you on the many aspects of your business such as tax registration, company formation, preparation of your business plan, preparation of financial projections and cashflows, keeping proper books and records etc. You may even outsource your bookkeeping function to your accountant as this will allow you to focus on what you do best……your business.
6. Networking & Marketing
Once you’re ready to launch your business, you will need to think about how you are going to tell everyone about your new product or service.
There are lots of options when it comes to marketing, some free and others quite expensive. What works for one company might not work for you, so be sure to weigh up your options and figure out what’s most appropriate.
One of the best, and often free, options are networking events. Attending such events will give you an opportunity to meet like-minded people who have experienced the same challenges and obstacles you may be facing.
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While the above tips will be key when setting up your new business there is one further trait that you will need, commitment!
Setting up your own business is a big challenge and not one to be taken lightly. Your business won’t become profitable overnight, and you will need to make many sacrifices to see your dream become a reality. However, with the right tools, goals, plans, team, and support it can happen.
If you have a fantastic business idea or are in the process of preparing your business plan and would like some advice or assistance, please do not hesitate to contact a member of our team.