I started my own business just over a year ago in April 2011. When deciding if I should start a business, I visited a lot of different websites and forums gathering information about what was needed to start a business and what steps needed to be taken to get the process going. I learned quite a bit during that time and in the months after as my business progressed. To help any future business owners out there, I want to pass on some of the information I know. This guide will help give you an idea if you want to start a business and what you will need to consider before forming your own business.
1. What is Your Business Going to be?
Before you can do anything about starting your own business, you have to decide what exactly you want to do. The possibilities of what your business could be are endless. If you are thinking of starting a business, you probably already have an idea of what you want to do. The best idea for a business is something you are good at and something you enjoy. You are going to be the driving force behind your company so you need to have the necessary skills for it and if you find your business to be dull and boring, it will not be able to thrive. As @CastleHillSOM said to me:
2. Choosing a Business Name
Choosing a business name is very important as it will mostly be the first thing potential customers see or hear. There are several different practices you can use when it comes to naming your company.
- Go for the personal touch by using your name in your business name, i.e. Bob’s Building Supplies, Daisy’s Disco.
- Use alliteration in your business name to create something catchy, i.e. Colourful Candy Creations.
- Use your location to give a more local theme to your business name, i.e. Café of South London, Scottish Internet Consultants.
- Create your own words to make up your business name, i.e. Bebo, Häagen-Dazs.
One of the important things to think about for your business name is making sure that it can be pronounced easily by your customers. People will not be able to talk about how good your business is if they can’t say your company name. Once a name has been picked, check the Internet and business directories to make sure another company hasn’t picked up that name first.
3. Choosing Your Business Structure
There are several different types of business structure you can choose from. The three most common are Sole Trader, Limited Company and Partnership.
This is the simplest way to run a business. There are no registration fees to pay, keeping records and accounts is simple and straightforward and you get to keep all the profits. However if your business runs up any debts, you are personally liable for them.
With this structure, your business becomes its own separate entity, meaning all its finances are separate from your own and you become and employee of your company. If you take this route, you’ll have to register your business with Companies House, file annual returns and accounts with Companies House and comply with HM Revenue and Customs’s requirements for PAYE tax.
This is when two or more people decide to create a business together. Each partner shares the profits, losses and debts of the business. Each partner must submit a tax return on their share of the profits. It’s a good idea to get a partnership agreement made, showing what the responsibilities of each partner are and what share of the company they have. Partnerships can also be made limited companies as well.
Depending on what business you decide to start, they may be regulations you have to follow. If you decide to start a cosmetics business, there are EU directives governing the testing and labelling of your products. If you want to run your own gas engineering company, you must be registered on the Gas Safe register. Check the Internet or your local library to find out if there are any particular regulations that apply to your business.
All business need money, especially when they are newly formed. For your business, you are not only going to need money for your start-up costs. You are also going to need funds to keep your business going until it generates enough interest for it to finance itself. If you have savings of your own, this is the easiest way to fund your new business. You can approach banks and financial institutions for loans. There are companies set up to give out loans and grants to new businesses. However their funding is normally quite limited and you may have to fulfill certain criteria that they declare. Depending on your circumstances, there may be government schemes available to help give your business some starting capital.
A good idea when it comes to your business’s finances, is to have a separate bank account for it. This will help you keep track of how much money is in your company and will make life easier when it comes to filling out tax returns.
How you advertise will largely depend on your budget and on where your business will trade. An online store may wish to advertise to the whole of the country, whereas a handyman would most likely stick to a much smaller local area. Leaflets can be made and delivered to people’s homes, although for a newly formed small business, this method is more beneficial to business trading in a small geographic area. Radio and TV advertisements can be directed to local and national audiences, depending on the station chosen. If you use a vehicle for your business, you can get your company name and details on the side of your vehicle, turning it into a moving advert. Talking to friend and family can help spread knowledge of your business by word of mouth. Be sure to carry a few business cards with you just in case you get asked for one. If your business is in one fixed location, like a shop, invest in a good sign that shows people that you are here and open for business.
With so many people being on the Internet, having an online presence can help any business. Use social networks like Facebook and Twitter to promote your business and show there is a person behind your business. If you have photos of what you do or sell online, use a site like Pinterest to show off those images. If you are going to be selling online, a blog can be used to show what you’re selling or making, as well as help improve your rating in the search engines. You could even make your own website. Even if you don’t do any business online, it can make a great advertisement for your company. Get your business listed into the online business directories such as Yell.
7. How to Sell
How you decide to trade will be affected by what your business is. If you decide to become a plumber or electrician, you will be spending a lot of time working in other people’s houses, coming home to take care of the admin side of the business and arranging new work. If you decide to set up a restaurant, you will have to find a location where you can build your restaurant or convert an existing property. The best places would be where there are large amounts of people, either in tourist locations, near residential area or close to a shopping complex. If your business involves you making something to sell, good places would be local markets and fairs, as well as online on your own website or on a website dedicated to handmade goods. Several business may be able to sell the same goods in different ways. For example, a restaurant that is only open in the evening may decide to sell from a catering van to local business during the lunchtime.
8. Creating a Business Plan
Your business plan is the backbone of your company. It will set out what your company is about, what its goals are and how it is going to achieve them. It is crucial if you want to get funding from places like banks or other companies. It will include a summary of your business, it’s products and services and your target market. Market research data and financial projections for your business are also included. There will also be sections on your sales and marketing strategies. There are many tutorials, guides and templates on the Internet dedicated to creating a business plan.
9. Registering Your Business
After you have done your research and you are ready to start a business, you must register yourself as self employed with HM Revenue and Customs. It’s best to do this as soon as possible, otherwise you could incur penalties. You can do this online. If you wish to create a limited company, you should register with Companies House first. They will then notify HMRC that you wish to start a limited company and they will then send you the appropriate paperwork.
10. Have Fun!
This is your business. Your creation. You can do anything with it, so make it fun. No more Monday morning misery, not now that you can change how you work and what you do to make the experience enjoyable to you. Casual Friday may not be as special when you’re working on your own, but you can now make that Friday anything you like. Go out there and enjoy running your own business.