Posted November 27, 2018
What to consider when starting your own business
As a business owner and accountant for over 30 years I have met a lot of people who have started their own business. People start businesses for a variety of reasons, some in the hope of a better work-life balance, some because they have a great idea and others who just don’t know what else to do! Whatever the reason for starting a business, the initial enthusiasm often means that people start a business before fully considering everything.
Here are 5 things of the most important things I think you should consider before you take the plunge:
I cannot emphasise enough how important it is to research your business before you get going. You need to know what your target market is, what your competition is like, where it will be located etc. If there is a similar business nearby, can the market support two businesses who might be doing a similar thing, conversely if there is nothing similar to your potential business is there a reason why?
Plan how it will be funded
All businesses need to be funded in the start-up phase, if you are intending to give up a job how are you going to manage to fund your business whilst potentially in, a worst-case scenario, having no earnings.
Prepare a Business Plan
Once you have done your research and worked out how you are going to fund the business, prepare a business plan. Make sure it is realistic, you want to plan for the best case, average and worst-case scenario. Don’t underestimate the costs involved and the amount you need to sell. If you think about a café, the rent, rates and insurance are £800 a month, if you are selling coffee at £3 a cup you need to sell 266 cups of coffee a month just to cover these costs before you have even paid for the coffee, electric, cups staff costs etc.
Don’t be afraid to ask for help
When you first start a business, it can be a very lonely place. Often you won’t have any colleagues to chat to, perhaps you may not have many customers until you get your name known. The worry sets in – are you doing it right, is it usual not to have any calls on a Monday afternoon, am I charging too much? It is important that you aren’t afraid to ask for help and advice from your friends, family and if you have one, your accountant. You will also find that there are so many networks out there for people in exactly the same situation as you – it is important to know that you are not alone, and your concerns are not unreasonable.
Working from home
If you are intending to work from home (as I did when I first started out) you need to have your own work space. Switching off from work can be almost impossible if there is pile of paperwork sat in the corner of your living room. Having set work time is also important – otherwise you will find yourself responding to emails at 3am!