1. Benefits of starting your own business
Some people dream of running their own business from childhood. For others, life events such as a change in employment status may prompt a change of approach, or a new idea may be born out of spotting gaps in a market or changes to consumer behaviour.
Many people relish the autonomy that comes with being a small business owner, compared with employment where you report into a management hierarchy.
It might provide an opportunity to focus more on something you are passionate about. And, there’s no doubt you will develop new skills and experience as you’ll need to understand and work on all sides of the business from sales and marketing and operations, to finance, customer service and legal compliance - something that is harder for employees at larger businesses.
For those who like to try new things, there is the chance to constantly test and learn when developing new products, services and processes, and build your understanding of other people and what they need.
Depending on the type and scale of business, you may have greater flexibility of working hours and more opportunity to increase your monthly income, take dividends and maybe even receive a lump sum from selling your business in the future.
2. Popular types of start-up businesses
Every year tens of thousands of new businesses are registered in Scotland. Popular examples include:
Mobile businesses - delivering personal services in people’s homes such as hairdresser, chiropodist, beautician, tutor.
Creative businesses - making and selling jewellery, craft, interior design consultations, candle making, paintings and sculpture.
Retail - creating and/or selling products online or in shops, markets, in-shop concessions or shopping boutiques.
Coaching or consultancy - pass on your expertise to individuals or corporate customers.
Teaching/training - company team building, industry specific training, personal/group tuition.
Services for those who are time poor - ironing, childminding, dog walking, cleaning, gardening, joiner or tradesmen.
Fashion or clothing - designing/making clothes, bags or accessories, alterations, tailoring.
Technical - car maintenance/servicing, computer repair, gas & heating engineer, other trades
Food & drink - can include anything from a local café to event catering, cake baking or brewing & distilling.
Business support and IT services - Marketing, PR, copywriting, advertising, virtual assistant, web development, software development.
Health related - personal trainer, gym owner, healthy eating adviser, health & safety, pest control.
Driving jobs - delivery driver, courier, minibus hire/driver, removal services, taxi driver.
Tourism - providing accommodation (hotel/B&B/guest house/campsite etc), outdoor activities, recreation facilities.
Franchising is an option in some sectors if you want to work for yourself but within an established brand and business model.
Also there are hundreds if not thousands of innovative and high growth businesses bringing new products and services to the market across several sectors, including:
Life and bio sciences
Health
Energy and renewables
Carbon innovation
Digital media
Technology
Informatics and computer science
Construction
3. What skills and knowledge do you need?
Successful business owners come from the full range of backgrounds and ages, and have a variety of experiences, skills and personalities.
That said, having or developing characteristics like determination, resilience, adaptability, personal drive and imagination will make it easier to cope with the inevitable challenges and uncertainty of leading and running a business. It will help you to be able to treat any failures as a chance for learning and have coping mechanisms so you can look after your own health, physically and mentally.
It’s often useful if you have some knowledge of the sector you want to work in, and some understanding of how businesses work. But you won’t have every skill or element of knowledge that you’ll need when you launch a business - no one does.
If you have relevant technical or academic qualifications then this can be helpful but it’s not necessary unless some form of accreditation is required to operate in your sector.
You will fill knowledge gaps by learning on the job, as initially you’ll do a bit of everything until your income justifies hiring staff. Longer term, undertaking training or online courses, outsourcing specialist tasks, or partnering with or employing people who bring the skills and knowledge you need will supplement your abilities.
Business Gateway has many guides, webinars and events to help you get up to speed on key skills you need to run a business and the research team can help you quickly understand your market through custom market reports and answering your specific research questions.
4. Issues you might need to overcome
At the beginning, and in some cases for many years, you may be the only person driving the business forward until your income justifies hiring staff. You’ll need to consider.
how much time you have to give
whether you want to work part time or full time
what financial resources you have to start up and whether these are sufficient to cover your overheads and outgoings
how will you juggle work with family and other commitments.
Before you rush to launch a business, consider if any of the following apply to you, and take steps to work through them.
If you need to make money quickly or don’t have any savings to tide you through the early stages, you may need to look at alternative income streams to support your business in the short term.
If you find managing money or budgeting difficult it is a good idea to seek professional advice to help you manage your money and your accounts.
If you can’t put in overtime or flexible hours you may need to find solutions as you may need to work longer or varied hours to accommodate peaks and troughs.
If you usually need direction to start and complete tasks - you’ll need to find a new way of working to help you get tasks done and manage your time.
5. Understanding the financial risk v rewards
When it comes to risk and reward, not all business models are equal.
For example, if you are setting up a small consultancy it can be relatively low risk as you may be able to work from home and have minimal overheads. If you see a dip in business, it may reduce your personal income, but you won’t continue to run up significant costs at the same time. In peak periods, you may be able to bring in extra support on an ad-hoc basis, for example, working with freelancers, rather than committing to employing permanent staff.
In comparison, if you are opening a cafe, then it could be higher risk as you will need to rent or buy premises and have money tied up in equipment and stock. You may need to employ people early on, as many tasks such as cooking and serving need done simultaneously and it’s not easy to close the premises every time you need a break or holiday. In quiet periods, you still incur those costs and can make losses and run up debt.
You will also face higher risk if you are working on an innovative product such as software, where you will incur development costs long before you can generate any income, and there’s a chance it may never succeed.
However, to balance this, if you’ve created a business and brand that is bigger than you, and can eventually be run without you, there is a greater chance of rewards from being able to scale and/or sell your business. That could be easier for the cafe, or software developer, than a small consultancy where you deliver all the work personally.
6. Next steps
If you decide to go for it, the next steps are to understand the practicalities of setting up a business.
Our planning to start tool can also provide a list of next steps tailored for your circumstances.
7. Further support
Business Gateway offers free training, workshops and one to one advice for people starting up and running a business. They can be booked via www.bgateway.com/events.
We also offer opportunities to network with other like-minded people and to hear from those with experience of running their own business – find out more from your local BG office and read some of their inspirational stories on the website at www.bgateway.com/stories.
There are many other organisations offering help to start ups too.
Get the support you need right now
You can connect with us through the contact form, call us or contact your local Business Gateway office.