Business Startup Success Tips
People start businesses for many reasons. They may have a great product they think will sell; redundancy may have forced a change in career direction; or they simply believe it to be better to make money rather than earning it as an employee.
Whatever the reasons, starting a business, although exciting, is invariably a challenging endeavour.
Unfortunately, a significant percentage of start-up businesses fail within the first 12-18 months. Perhaps this is because many business owners see themselves as self-employed rather than as true entrepreneurs. The ideal entrepreneur designs a profitable business with the potential for sustainable growth; who provides employment; gives value to customers; and makes a positive impact on society in general.
It is not enough to have a great money-making idea alone; the question is do you have the necessary expertise and knowledge to develop a successful business around that product or service? Happily there is help available, especially since the Government has recognised the importance of encouraging the development of small businesses. Initiatives now include ‘Start up Britain’, the Centre for Entrepreneurs and a plethora of advice websites.
In launching a new business, there are some key features you should keep in mind:
Innovation: This distinguishes yours from other similar businesses and should be a priority when putting ideas into practice.
Profitability: The reason most people go into business is to build it up into a profit-generating entity.
Cash flow: The majority of new business failures are attributable to cash flow problems. Managing cash incomings and outgoings is therefore imperative. It’s not unknown for a business to be profitable but to fail due to poor cash flow management.
Growth and Expansion: Once established, look into ways of expanding the core business.
The following are a few useful tips and some questions to ask when starting out:
1. Have a plan: write down what your business is, where you want it to go, your main objectives (goals) and the actions needed to achieve those objectives. Although initially you may not need a full business plan (required by a lender if you want to apply for funding), nothing is real until it is written down. This should be a ‘working document’. Use it, change it, adapt it – it is your blueprint for success.
2. Consider the start-up costs: How much will you need and from where will the funds come?
3. Who will look after the financials and accounting? Finding a professional firm which understands the ramifications of running a small business can be of vital importance.
4. Who are your customers? Research your market. Who are the competitors? Where will you target your sales: do you know the demographics of the market? What methods will you use to sell your product or service? Retail outlets – online – media advertising – sales reps?
5. Initial set-up. Open up a business bank account (some banks may waive bank charges for the first 18 months of trading). Register for tax on-line, or ring the HMRC Newly Self-Employed Helpline on 0300 200 3504. Design a logo, register a domain name and build (or have built) a website. Print business cards. Follow your business plan and get out there!
Billionaire entrepreneur Richard Branson says of success: “The more you are actively and practically engaged, the more successful you will feel.”
If you are starting a business and would like the best advice and guidance, call Allsquare on 0131 343 1510.