Starting your own business can be liberating, exciting and rewarding. It can also be draining (both financially and emotionally) and incredibly stressful. Whether you're aiming to start a corner shop or become the next financial guru, the following collection of tips will help you to get off to the best possible start.
Start Small
As businessman Tony Freeman will attest, an important consideration will be start up costs. It's a little known facts that Marks and Spencers started its retail life as no more than a market stall. Back at the start, Tescos was no more than a couple of corner shops. Laura Ashley started out from her kitchen table. Before splurging on premises and equipment, consider how necessary that expenditure is. Many business's begin in the home, relying on little more than a laptop. For those working from home, issues such as insurance will need to be examined (household insurance may no longer be valid if you turn your home into a business premises). The policy may need to be upgraded. You should think about setting up a business account to save you the hassle of having to work through your personal and business expenses when the time comes for you to file your annual tax return.
Parcel Checker is a fabulous service for those needing to send parcels to their customers. It can save a fortune in delivery, its comparison tools linking users with the cheapest shipping company to meet their requirements.
Cash Flow
Customers don't always pay on time, so it's important not to make assumptions. Cut down on waiting time by persuading them to sign up to agreed payment terms right from the start. Be clear that you will charge an uplift percentage where bills are not paid within 30 days. Avoid spending money early on working on the assumption that this will be reimbursed by the client. Where possible, ask for payments on account. It may be prudent to ensure that you have an alternative income source to fall back on, even if that means taking a part-time job.
Draw Up a Business Plan
Business experts such as Tony Freeman will be familiar with the concept that to fail to plan in business means to plan to fail. Whether you're setting up as a freelancer or opening your own shop, it's vital to calculate your monthly business costs along with how much profit (or alternative income) will be necessary to source it.
Those starting up their own business must work out what their monthly sales need to be to keep the business afloat. It's a good idea to draw up a chart covering the next year, indicating the growth in sales which can realistically be generated and how you'll attract new consumers.
Finding Partners and Suppliers
Even if you're a sole trader, working alone, the business is likely to entail suppliers, distributors and possibly partners. So far as business partners are concerned, finding a co-founder with sufficient knowledge and skills is imperative. Where your own skills do not cover all aspects of the business, starting up with a specialist who has the knowledge you lack will enable you to cover all bases.
Create a list of potential suppliers. Approach them for estimates, and use this as an opening point to negotiate prices (it may be that they will apply a discount for buying in bulk etc). Begin to develop business relations with your suppliers to try to gauge which are reliable and trustworthy.
Networking
The more coverage the business has, provided there is a market for its goods or services, the more likely it is to find trade. In the age of the worldwide web this is especially true. You can market your business without leaving your desk.
Networking groups and forums are helpful places to find useful advice and meet individuals and companies relevant to your business. Interacting via this method can potentially create positive publicity.
It's a good idea to have business cards printed for potential clients you may meet in person. The Vistaprint website offers this facility for free. Trade can often be sourced via networking events in the local vicinity, depending on the nature of the business. It's always prudent to have something useful to offer potential customers, be it a business card or a brochure. Cold sales and door to door sales are particularly tricky venues in which to achieve success. Networking is infinitely easier. Networking puts people with a need in touch with people who have a solution. It's important not to be too brash - just exchange business cards initially. Feel free to email them (though only if you have information which would be of value to them), but not until 48 hours have passed. If you can provide them with useful information, or point out where they might find it, you've just created a positive association and they have your contact details.
Keep Your Ambitions in Check
You need ambition to start a business. However, those ambitions need to be realistic. James Caan of the Dragon's Den television programme recently commented in interview that those starting up a new business often fail to carry out sufficient research in terms of fundamental issues such as pricing. The prospective business person may believe they are offering incredible value, but if they have carried out insufficient research they'll never know whether they're being underpriced by their rivals. It takes two minutes to pick up the phone and talk to potential customers. Those new to business often spend too much time primping their website are throwing parties instead of concentrating on the fundamentals: the bare bones of the business.
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