4 things to look out for when starting a business
Over 600,000 businesses are started in the UK each year, with Britons increasingly choosing to be their own boss – but before you get started, here are four things you should look at first.
Learn some business basics
The basics of starting a business are relatively straight forward, but it is important that you have a good grasp of the basics before you start, so that you are not hit with some surprises later down the line. The first thing to work out is whether you want to setup as a sole trader or a limited company – there’s less admin to do as a sole trader, but you are also less protected, so do some research and choose the best option for your business.
Once you have decided on the structure of your company (and registered with Companies House if you decide to start a limited company), you can open a business bank account to keep your finances separate and sign up for an accountancy app like QuickBooks, Xero, and Wave to keep your accounts in order. These are simple steps, but don’t delay as keeping everything organised is critical to reducing stresses later down the line.
Be realistic about the funding you will need
It seems obvious, but the reason most businesses fail is that they simply run out of money. It can take months before a startup gets its first paying customers, so it is critical that you work out how much money you will need to support your company until those first sales come in. Be generous with your estimates to give yourself some breathing room so you aren’t stressed about money from day one, but also remember to keep a close eye on your finances so you don’t overspend unless you really have to.
Find out where to get help and advice
Running a business can be tough, and you will soon learn that you do not have all the answers. Finding the right people and platforms to find help when you need it early on will give you peace of mind that when you do have questions – getting the right answers will be relatively easy.
The first thing to ask yourself is what type of advice do you need? Most people will need some form of legal and financial advice, so it will be worth finding a local law firm and accountant that you trust. It can also be hugely useful to have a mentor you can turn to or other entrepreneurs on hand to chat with when you hit a rough patch and need to talk to someone else who has gone through the same experience. Whether you need a specific adviser or consultant will depend on your industry, but the Chamber of Commerce offers a huge network of people to connect with, and do not be afraid to reach out to people on LinkedIn or other social platforms as well.
Know that there is never a perfect time to start
Everyone has ideas for businesses, but only a small fraction of people ever make the jump and actually become their own boss because they are waiting for the “perfect time” when their finances are in better shape or their personal life is more stable or the economy has improved or any number of other excuses. Becoming an entrepreneur is not for everyone, but if you really want to run your own business then the right time to start is today – jump in and start work on your project immediately. Life is chaotic and the “perfect time” will never materialise – the best time is now.
Photograph by RawPixel