It’s a major decision to go into business for yourself. It’s also an exciting one, and you’ll enjoy a satisfying feeling when you opt to become your own boss. To get things started, you should write a detailed business plan. Once you know exactly what you want to do, you need to think about how to achieve it:
- Your business status – do you plan to form a company and employ people or work as a freelance?
- Your customers and your market – will this be local, regional, national or international (for example, via an online business)?
- Your business premises – will you need a place to work or can you start off at home?
- Your start-up costs – do you need to identify capital to purchase equipment, stock, etc.?
- Your business costs – do you need to purchase insurance cover, administrative help or accounting assistance, etc.?
Your business status
If you decide to take the freelance route to begin with, you’ll need to consider how to handle the rather onerous tasks that come with the territory. These include keeping financial records of your income and expenditure, paying the correct amount of tax and national insurance when due, and reclaiming valid business expenses. You will need to double-check what is and isn’t considered valid expenditure to do this.
One easier alternative is to set up as an independent contractor and let an umbrella company do all the hard work for you. The company will act as your employer. Your customers will pay your fees to the company and you will receive contractor pay. All the administrative work, including processing tax and national insurance, will be done by your employer, saving you the hassle of dealing with it.
Should you opt to recruit staff, you can also make use of an umbrella company: simply engage your personnel as independent contractors and let the umbrella company manage the admin. This arrangement offers you a lot of flexibility as you can choose the number of hours that you need from each worker, and they are also free to work for other companies or agencies.
If you already know where your customers are likely to be, you have a head start. If not, it’s worth doing a little market research to see whether people are interested in your idea. Use as many different routes as you can think of, including word of mouth and social media, then analyse the level of responses that you get and make adjustments to your business plan accordingly.
Try the free or cheap methods to reach customers first – there’s no point in spending a lot of money on advertising if you have no way of knowing whether it will reach your target market. You can get a free listing inlots of small business directories, and then, ifone or two attract attention, you can upgrade to a paid listing that will be more eye-catching and more effective. Remember that customer care is vital to a new business as that’s how you will earn repeat business and a positive reputation.
Beware of unnecessary spending on fancy workspaces or equipment at the start of your enterprise as this will be a drain on your limited resources. Many new businesses fail early on because they run out of money. It’s all too easy to overspend at the beginning of a project, and if you have a limited budget in place for start-up costs, you will need to spend every penny wisely.
Many banks are willing to lend modest sums for start-up costs if they like your business idea and believe that your business and financial planning is sound. If you have to acquire premises, don’t forget to factor in buildings and contents insurance plus Employers’ Liability Insurance if you want to appoint staff and Public Liability insurance if customers or members of the public are likely to be on the premises.It’s worth checking government websites as they provide a great deal of useful information for new business start-ups.
Finally, when you’re starting off in business, you will want to prioritise revenue generation rather than investing heavily in full-time permanent staff or expensive equipment. These will come later when you are turning a healthy profit and preparing to grow the business. Remember to return to your original business plan and update it on a regular basis, and at least once per year, revisit your initial business ideas and your financial goals to see if adjustments are needed now that trading is under way.