Following our June article on whether you should start your own business, we share our top tips for startup success for those who decide to take the plunge.
- It’s not about you – it’s about your customers!
Successful businesses always put their customers at the heart of everything they do. How will you help your new customers? If you already work in the industry, you should have a good idea. If not, you will have some catching up to do!
Do your research and be really clear on how you will help. Helping customers embrace technology to save time and money is often a great way to keep them happy. Be flexible, as clients’ needs can change. Listen and respond to what they tell you.
- Can you afford to start now?
New businesses typically take at least twice as much work and earn at most half as much as people expect. Around three quarters of new businesses fail in the first year. It will take time for your new business to start making money. Starting part time alongside a paying job will help, as will saving up before you start. We’d caution against a business loan, especially if it’s bigger than the funds you invest yourself.
Keep your overheads as low as possible – the fancy premises can come later. In the early days, strip your expenses down to a bare minimum and do without where you can.
- Balance idealism with realism
Of course you will love your new business – it’s why you started it! But you need realism and resolve as well as passion and commitment. Be honest about the state of your business and realistic about how fast it will grow. Plan to make enough money to support the lifestyle you deserve for all your hard work and you might just scrape through the all-important first year. A business plan can act as a good reality check.
- Get good advice
Take advantage of free advice such as from Startup Britain or your Local Enterprise Partnership. Startups can get 45 minutes free advice from Chartered Accountants with the ICAEW’s Business Advice Service, such as Approachable Accountants of Easingwold.
Don’t be afraid to seek advice from others in your industry – you will need to stick your neck out if your business is to succeed, and the worst answer you can get is “no”. Many businesses, even competitors, will be only too pleased to help. If you don’t fancy asking the local competition, try picking the brains of a similar, successful business elsewhere.
- Put money aside to pay your tax
Many businesses will make a loss in the first year but if you make a profit, don’t get caught out by your first tax bill! Particularly if you are used to having tax deducted through PAYE, this can come as quite a shock. New businesses should generally make their year end 31 March in which case you have a full 10 months after the year end to pay your first tax bill. Putting 20% of income aside to a separate account and writing up your accounts early will help.
For many, starting a business offers unprecedented freedom and happiness, but for others their dream becomes a nightmare. If you decide to start, there will be no substitute for hard work and enthusiasm, in that order.
If we can help in anyway, please do get in touch. We offer FREE initial consultations and can provide you with the right information you need when setting up your business. For more information please do email us at firstname.lastname@example.org or check out our free information online.
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