If you are considering starting up a new business, you need to consider a number of factors to ensure the best chance of success, including researching your business idea, business planning, funding and finding and keeping customers.
Overview
As well as your product or service, you will need to think about
what you will call your business, what sort of structure it will
have and how you are going to run it. You should also think about
how you are going to attract customers and where the money will
come from for setting up.
This guide outlines what you need to do, and where you can find
the information you need, to plan your new business. It gives
guidance on business plans, proper finance and the legal
requirements that must be met when starting up a business.
Before you start your business
You will need to research and develop your basic business idea, and
work out what you are going to name your
business and what form it will take. You should also think
carefully about the product or service that you want to sell, the
audience you're selling to and what you have that makes you stand
out from the crowd.
Also think about how you are going to finance
the start-up and what effect it will have on your personal finances
while you wait for profits to show.
Start-up options
There are a number of options available to you when starting a
business. You might want to start your business full-time or part-time, or even in
your spare time. You could choose to work from home or
separate premises, to buy an existing business or to
invest in a franchise, depending on your experience,
lifestyle and resources.
Think about assessing your own skills and where you might need
some extra development or support - for example, looking after the
business' finances.
Finding and keeping customers
You need to have a clear understanding of what an ideal or
typical customer looks like. You also need a way of identifying
groups of customers with a similar profile.
Understanding target customers and their needs is a key aspect
of your market
research. Developing a marketing plan and a sales plan
is an important next step in planning how you will reach these
customers through promotional activities while also enabling you to
budget for the cost.
Once you have gained new customers it is vital that you build a
long-term relationship with them so that you can enjoy their repeat
business. It is significantly easier and cheaper to do business
with existing profitable
customers than to find new ones.
To retain valuable customers, you need to understand in detail
the effectiveness of your customer service as seen from the
customer's point of view. Customer feedback on your performance
will help you make informed decisions when making adjustments to
your offer. It also increases the likelihood that your customers
will talk about you positively to others and make referrals.
Finance for start-ups
You need money to get under way and to keep your business going
until you get paid by your customers. You will also need to cover
your personal expenses until the business can support you.
Creative thinking and planning your cashflow might
save you money and make it less costly than you think to start your
own business.
Tax and legal issues for start-ups
You need to make sure that you have all of the legal formalities
in place. This includes choosing the right legal structure to suit
your circumstances and ambitions as well as registering with HM
Revenue and Customs. Should you choose the limited company
route you will also need to register with
Companies House.
You may need to seek specialist advice on Intellectual Property
Rights (IPR) protection to cover copyright, trade marking,
design registration or patenting.
Keeping and maintaining accurate records as well as ensuring
that you pay tax and National Insurance are also essential
requirements.
Business planning for start-ups
Planning and thinking about your business is a necessary process
to undertake before, during and after you start. The headings in a
business plan can be thought of
as a checklist of questions you need to ask to reassure yourself
that your venture will work.
Writing the plan down is just as important because it helps to
clarify your thinking and demonstrates your commitment to move
forward. It also identifies where you intend to get to and how you
intend to get there.You should also consider how you intend to run
your business and identify early on any areas or issues that you
may have missed.
You can use your business plan to review your progress against
your forecast and make any necessary adjustments to get you back on
track. Having a clearly presented document will also make it easier
for any specialist you may use to provide support. When raising
funds from a bank or investor, a business plan will be a necessary
requirement.
Business plan structures vary, but a plan will typically
include:
an overview
a short description of the business idea and opportunity and
what makes it different
who will be involved in the business
how you will provide your product or service
your marketing and sales strategy
financial forecasts that will show the expected
profitability.
