Starting out for yourself can be very hard. Recently Just Cash Flow PLC have done some research which involved speaking to 250 SME’s. According to this research, 63% of SME owners believe businesses would be less likely to fail if owners had more educational support. 80% said that they didn’t know everything they needed to know when they first started their business and 48% confessed that they had limited knowledge when it came to financial and business planning.
With this in mind, we have put together our 20 crucial tips for any start-up business owner.
20 tips for start-ups
- Have an idea!
There is no point in starting a business without an idea – a business will not survive just on the idea of making money if it has no value, sale or aims.
- Create a business plan
Once you know what type of business you’d like to set up, get it in writing! Establish by yourself or with partners (if you have partners) how you’re going to make your business work and how it will survive. How will you pitch your ideas?
- Estimate the costs and work out your budgets
You need to have an idea of the costs associated within the industry you are going into. This will not only benefit you – it will also impress any potential investors, as they will ask and expect you to know about your costs. Once you know the costs, you can then establish a budget.
- Search for the best and right investors for you
To get started, you need funds. Do you have your own money? This removes the burden of any debt, but puts your hard-earned life savings at risk. Do you look for a start-up loan? Or an investor? It is often hard to gain a significant amount of money unless you show you are willing to invest your own money. Also, an investor will want some form of ownership in your company. This may mean you have to answer to someone else and will have to sacrifice some of your potential future earnings.
- A support system!
Owning a business is stressful – you need help, and a mentor can be really helpful. Look to speak to people who have been through this journey and can help you avoid any pitfalls that may arise.
- What is your legal structure?
What is your ownership title?
A sole trader? When starting your own business and working independently, you are classed as self-employed. You alone will start and progress your own business – you work for yourself, and are responsible for everything! Being self-employed allows you to make every single decision and lets you take the entire profit home after tax has been paid.
A partnership? This is having a business with a partner or partners who share the same passion and drive for starting a business. Partnerships can include businesses and organizations, such as schools. Having partners means sharing responsibilities for the business, and if anything is to ever happen to your business, the blame is equally shared. However, it also means a stronger investment.
A limited company? Being a Limited Company comes with a ‘special status’ –you have their own legal identity and have rights to sue others and own assets. Limited companies are separated into different fragments, for example ‘shareholders’. When choosing your shareholders, always be careful as they have shares in the business too and can have the same access as the owner. You have to be direct and efficient when deciding on any shareholders, as in some respect they are as responsible as you are.
- Choose your name!
The exciting part – naming your creation. Think of a few options, because a lot of the time, the name you chose may not be available as a domain online. Always keep in mind – is your name catchy and unique? Does it describe what you do? If you’re an internet company, your domain is massively important – this is the first thing people will see on search engines, and we all know about first impressions. Also, remember trademarks – make sure your brand is not already registered.
Once everything is sorted, you are able to go and register it!
- Know your tax obligations
What types of tax do you need to pay? How much tax will you have to pay? Find out! If you’re not sure, speak to an account, your mentor, or other organizations that are available to help small businesses.
- Buy insurance
This is vital. Remember, it’s important to cover your business for any types of damage or loss that could occur. Cover any potential injuries, damages to the business, your staff and, of course, your customers. Most businesses will need liability insurance of some kind, and employer’s liability insurance is legally required if you have even a single employee.
- Don’t take anything too personally
Chances are, you’re going to get rejected by customers and investors at some point down the line. You are a start-up and your business has no brand awareness yet. Customers, suppliers, and investors will be reluctant to trust you at first, as they don’t know you yet. However, this will not always be the case – don’t take it personally and push forward with your business plan.
- Your product must be delivered promptly
You need to have an increasing amount of customers, and customer service should be high on your agenda. Make sure that any product you release is of the highest quality, is delivered on time and that your customer service is always to a high standard. You want your customers to become repeat visitors, as this will make your business appear more reputable, and will make your business more money. Word of mouth is free advertisement, and can be crucial, particularly for new businesses.
- Do not fear competitors – get them to fear you
Never bad mouth your competition – it is important to remain professional at all times. Competition creates a market and the market becomes an inspiration for consumers and can make all the difference to making your business successful.
- You are new, be impressive
Investors and partners want to know your business. This means meeting after meeting, each with presentations. Although it may be tedious, make sure you treat every presentation like it is the first one you’ve ever done. Be confident in yourself and in your company and make sure the investors see the value of your business.
Where do you find marketing messages? Everywhere. Social media is free, as is SEO (search engine optimization). Take advantage of these tools, as they can make a big difference to getting the word out about your business. Get yourself known as soon as possible– social media has revolutionised word of mouth, meaning brand recognition can happen almost instantaneously with the right marketing campaign. Brands can now ‘go viral’ and hit thousands of people with the right product and marketing strategy. Develop your own tone of voice and marketing style – see which tweets and ads are working and learn from them.
- Hire employees that are committed and enthusiastic
You need to employ people that want to be there alongside you, and are inspired by your business plan. You don’t want someone that is just there for their pay check at the end of the week or month. Staff that are not interested look bad for your business. When you hire the right staff and gain trust in them, pass on responsibilities. You are only human and cannot possibly do everything, and it is important to have enthusiastic, passionate staff who you know you can rely on to do their jobs well.
- White lies should be avoided.
Telling any form of lie runs a risk – you do not want to damage your name before it is known. It is important to be honest and make sure your business runs in a way you can be proud of and sustain for years.
- Be aware that starting a new business takes time
In the beginning, you’ll need to put a lot of time and effort into your business. Your social life may suffer at first, but once your business is up and running you will find that the sacrifice was worth it.
- Make sure everything functions
Everything needs to go to plan and run efficiently, particularly if your business is online. Your company is brand new, and you do not want your site to crash or for your shop to run out of stock, particularly when customers are experiencing their first visits.
- You are not going to become a millionaire overnight
This doesn’t mean your business has failed – be patient and don’t give up.. Nothing happens overnight, so set realistic expectations of what success means to you!
- Not everything works out
Be prepared – sadly not every business will succeed. When it’s time to let it go, let it go. Do not attempt to save a ship that has already sunk. Don’t feel bad about it – there are many successful entrepreneurs that have had businesses which have failed. For example, remember Virgin Cola? Even Richard Branson has failed numerous times. Failure does not mean you can’t try again.