With high unemployment, spending cuts causing redundancies and reasonable loans hard to find, all businesses large and small are trying to navigate a path through some pretty unbearable economic times.
But you don’t necessarily need to be dragged down by other people’s woes. If you’ve had a business idea which has been pushed to the back of your mind for a while and if you have the support to start up on your own, perhaps now might be the right time? We live in a nation of shopkeepers and even if you aspire to start a bookkeeping business, a salon or design agency rather than a shop, the only ideal time for you to start is now.
First, why set up your own business?
Where to begin? In theory there are many advantages of setting up your own business. You can be your own boss, set your own targets and have the freedom to move in which ever direction you like. You want to wear pajamas in the office and finish at 3pm? Being your own boss is for you. Whichever industry you have experience in, you can use this knowledge for your own gain as you could also potentially earn more money, receive tax benefits and choose your own team (if you need one)! Of course reality is nothing like the dream, and many business owners find themselves working far harder than they ever did while employed – and often for less money too! Even so, the feelings of self-accomplishment, ownership and autonomy are usually felt to be worth their weight in (employer’s) gold.
We now live in an age where starting up a business is easier than it’s ever been. The internet and social networking sites mean starting up your own business has never been cheaper or simpler. There are even smart phone applications which can help you begin a business by accepting payment via a mobile credit card reader. From basic tax calculators to stock taking apps and the SME marketing App which gives you help and advice for marketing your business, there are hundreds of apps that can help and lots of online resources such as this mini guide to starting your own business from XLN Business Services. The extract below looks at if you have what it takes to become an entrepreneur.
From the Mini Guide to Starting Your Own Business by the team at XLN Business Services. Have you got what it takes?
What are the key points you should consider when beginning a business?
- Your idea – This will be the root of your business, it will mould your mission statement and the basis of what you will be selling. Think about what your ‘product’ will be and whether there is a market for your business. “How will you get customers?”, “Are you unique?” and “What competition will you face?” are all great questions to ask. Try summarizing what you plan to offer in just one or two sentences and then test this pitch out on friends, family and key contacts.
- Your business name – Check the name you have in your head doesn’t already exist by using Google and other online services.
- Register yourself – Depending on where you work and what you do, you will have to register with different authorities to let them know you’re now working for yourself. The reason you need to register is normally for tax and insurance reasons, so giving your local tax office a call is a good place to start as they can tell you what you need to do.
- A business plan. If you need funding for your business idea – you will need a plan. This will give potential investors (even if they are family members) or your bank manager (in the unlikely event you think you might qualify for a business loan or overdraft) an overview of your product, your objectives, a budget, cash flow and milestones. You want their money and they will want to see some thoughtful planning in return.
- Money – setting up a business means your monthly earnings may exceed what comes in, especially at the beginning. You must keep a track of how your money moves so keep records of what you spend and what sales you make – receipts, invoices and notes are all vital. These will act as evidence for the tax man, when he comes calling (which he will) and will help decide your tax bill. Being self employed also means a certain amount of responsibility for your own accounts. You will have to complete annual self assessment tax return, and check if you need to register for VAT.
Setting up your premises. Where will you be working? If your business needs premises other than your home, you need to find them and get them set up. Critical services like telecoms (so your customers can have a phone number to call and you can have internet service) and utilities need to be set up. You may need merchant account services for credit and debit card processing. Depending on the type of industry you are in, the amount you spend on these services will differ. Choose your providers wisely as these may be big ticket items that you will pay a lot for over the years. You could use the telecoms, energy and banking names you are used to, but often providers who specialize in providing services to small businesses are cheaper, so make sure you do your research.