After six years of Britain’s worst post-war recession, it looks like the nation’s entrepreneurs are regaining their courage. Figures released by Companies House show that a record 526,446 new businesses were registered last year, up from 484,224 in 2012 and 440,600 in 2011.
With consumer confidence also starting to show signs of a comeback, now could be your ideal moment to put your dreams of your own business into practice. But let’s be clear: this is not a decision to be taken lightly. Giving up the day job means giving up company perks like your pension, sick pay and paid holiday. You’ll probably also be saying goodbye to your life savings and your free time, so make sure the most important people in your life are prepared for the long haul.
With so much to consider, it’s no wonder the prospect of setting up on your own can be daunting. To help you get off to a good start, we’ve put together a five-point plan to show you the way.
1. What’s the big idea?
The first thing you have to do is identify your opportunity. What gap in the market are you going to fill? That’s NOT the same as being original – Prêt á Manger didn’t invent selling sandwiches, they just found a way to do it better. If you see a product or service that you’re passionate about, and you can improve the way it’s delivered, that’s a great place to start. Put yourself in your customers’ shoes – if you already are that customer it’s even easier.
2. Will it make any money?
Next you need to do the research. For your business to take off it has to be financially viable, which means there has to be a market waiting to buy what you’re selling. Chat with your family and friends, speak to the owners, staff or customers of similar businesses and look up demographic and economic data. Doing the proper research doesn’t have to cost a lot of money. But the time and effort you put in now could save – and make – you a fortune later.
3. How will you fund it?
This is where it gets serious. If you’re still confident you have a viable idea, the next step is to draw up a detailed financial plan. Do you have savings to invest? How much extra money will you need to borrow? Bear in mind that it will take a while before you make any money, so managing cash flow is essential. If you’re paid by invoice, consider Factoring to ensure you always have operating capital. For more help visit GOV.UK business and self-employed resource site
4. Where will you set up?
Many retail businesses start online before venturing on to the high street, as it enables them to establish a customer base without tying up too much start-up capital. Remember, a shop means you’ll have to pay rent, business rates, bills, decorating and signage, and that’s just getting started. Similarly, trading online means managing stocks and orders, a professionally designed website, advertising, links and optimisation to improve your search rankings.
5. What will you need?
Now you have your premises, what are you going to put in them? You’ll need computers and software for your staff along with desks and chairs, filing cabinets for personnel and customer information, as well as printers and photocopiers for paperwork. Then there are consumables like stationery: paper, pens, the list goes on. If you’re a one-man operation you won’t need much, but you must ensure you have the tools you need to get the job done.
There are lots of other considerations – including legal and financial advice, sales and marketing, operations and infrastructure and human resources – that we haven’t gone into here. But this will hopefully give you a structure to work with, and an idea of what you need to do to get your idea off the ground. Good luck!