Many people
dream of escaping the 9 to 5 life to be their own boss; with perks including
flexible hours, more creative control and the chance to run things in a way
that suits you. As you might expect, the most common way to do this is by
starting your own business, and while it can be incredibly rewarding, it’s hard
work and something that requires a lot of forward thinking. Setting up a
business from scratch requires a lot of dedication, and while it isn’t strictly
necessary to have a business background or qualifications, you do need to make
sure that you’ve planned, prepared and made sure your business idea is
feasible.
If you’ve
been dreaming about setting up your own business, there’s a lot you need to
consider, from how you’ll raise the required funds, to writing a business plan,
registering your business name and hiring a commercial solicitor to help you
with the legal side of things. If you want to know more about the fundamental
basics of starting your own business or company, then read on for our guide to
getting started.
Think about your skills and strengths
It might
sound obvious, but it’s very important to take stock of the situation and think
about why you want to start your own business, as well as assessing where your
skills and strengths lie. It can take a lot of hard work and dedication to get
a business up and running, so it’s vital that you choose something you’re truly
passionate about. Consider why you want to start a business in the first place;
is it for more freedom and
Flexibility, more money, or another reason?
Most people
have some rough business ideas before they decide to take the plunge, but you
should still consider where your strengths lie, and be realistic about your
weaknesses. What will your exact role be? Will you be providing a product or a
service, and how much time and money can you afford to risk on the project?
Do market research
Conducting
market research in your chosen industry or field is vital; you might think you
have the best idea in the world, but is there a lot of competition in that
area? Or, if no one has come up with a similar idea yet, why not? It may be
that some aspects of your proposed business model are simply not feasible, so
doing research to see how it would be received is an essential step.
Market
research can be gathered via interviews, questionnaires and focus groups, to
determine how effective a product or service is and analyse what could be
improved. You can also contact advertising representatives for data and
statistics about your competition or the industry in general, or industry
suppliers to get a sense of demand and general market information.
Register your business
This is the
essential first step towards making your dreams a reality, and there are
several different types of self-employed business structures to choose from.
Most businesses register as a sole trader, limited company or partnership, and
there are different rules and regulations for each which we discuss briefly
below.
Sole trader
This is the
simplest business structure, which means you run the business as an individual
and are responsible for any after-tax profits as well as the business debts.
This model means that your business and personal finances are not separate, so
you are personally held responsible for any debts incurred by the business.
However, it’s very easy to set up and all you need to do is register as self
employed with HMRC.
Limited company
Forming a
limited company means that your business and personal finances are kept
separately; but you will be required to take on more reporting and management
responsibilities. A limited company usually consists of a director (the person
who started the company) and at least one shareholder. You will need to
register with Companies’ House and provide a suitable name and address; it’s
often easier to hire a business lawyer or accountant to help you with this.
Partnership
This is the
most straightforward way for two or more people to run a business together, and
you will all share responsibility for the business’s debts. All partners will
need to submit a self assessment tax return each year, and one person needs to
be responsible for submitting a partnership self assessment on behalf of the
business.
You can find
more information about how to register for any of the above on the UK
government’s website here.
Have a solid business plan
Before you
think about applying for any financial help, it’s essential to have a solid
business plan, and even if you plan on financing the business yourself, you’ll
need a detailed account of how the business will work. A business plan should
be a detailed map of how your business will grow and evolve - from the initial
idea to finished product - and the steps that need to be taken to reach your
goals. A business plan can be used to pitch to investors, and it should include
your detailed strategy, tactics, market research,your target market, a design
and development plan, deadlines, budgets and how you will finance and manage
the cash flow of the business. You may find that your plan develops and changes
as the business grows, but it’s wise to start off with a plan that’s as
detailed as possible.
Plan your finances and funding
Of course, a
business can’t get far without the necessary funding, and there are several
different options available, from raising the funds yourself to crowdfunding,
applying for bank loans or pitching to investors. Most small businesses can get
off the ground with a bank loan, credit cards or help from family and friends,
but if you want to pitch to investors then you need to make sure your business
plan is rock solid. Knowing your plan inside out will help you pitch more
effectively, and having a copy of the plan can help when applying for bank
loans or credit cards too.
It also
helps if you have a good credit score, and you’ll need to provide documents if
applying for a bank loan, including business licences, tax returns and bank
statements.
Find the right location
Once you’ve
registered your business and got the required funding you need, you can start
looking for suitable premises to run your business from. Some people may choose
to work from home, but this will depend on the size of your property and how
much space you will need. If your business operates solely online, then you can
save money on renting an office or building and simply work from a computer at
home.
If you
require a physical location solely for your business, then there are many
further aspects to consider. Think about the area in relation to your target
market - you’ll need somewhere near to where your target market is likely to
be, for example next to a university or campus for students, or near a school
if you plan to target parents and families. You’ll also need to think about
visibility and footfall; is it easy for customers to find you? Are there good
transport links and access to parking? You’ll also need to acquire all the
necessary licences and permits, and invest in business insurance to protect
your property and stock.
Hire
a commercial solicitor
Hiring a
commercial lawyer can be one of the best things you can do for your business,
and provide you with the expert help and advice you need to get things up and
running. A commercial solicitor can provide advice and practical support for a
wide range of issues, including commercial property law issues, business
purchases and sales, starting your own business, employment matters and
contract disputes.
They can
also explain everything you need to know regarding the legal side of starting a
business, and help you acquire the permits and licences you need before you get
started. Commercial lawyers are there to protect your best interests, and
they’re familiar with the risks involved with running a business so you can be
sure you have someone on your side.
If you’re in need of an experienced commercial
solicitor to help with your Nottingham or Loughborough business, get in touch
with Hawley and Rodgers. Our expert team specialises in commercial and property
law, and can help you with any business related issues, including setting up
your own business, commercial disputes, tenant and landlord issues, company
formations, how to run a business day to day and much more. For more
information, don’t hesitate to give us a call today or
visit our website.
