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Starting a business and seeing it grow into a profitable venture can be incredibly rewarding.
It isn’t, however, something you want to throw yourself into without giving it some serious thought.
There are so many different things to consider. Does your business offer something that is distinct enough from your competitors? Are you managing your funds efficiently enough to expand the lifespan of the business?
These are just a few of many questions you’ll be asking yourself if you’re on the verge of starting your very own business.
In an attempt to give you a head start in your current venture, we’ve put together this helpful list of things to think about before you take the plunge.
» Register your business – Sole Trader, Partnership, LLC
The first thing that’ll turn your business from a pipe dream into a reality is registering it with the UK government. This is very easy to do, you can do this on your own, using a company formation agency or with apps like MachFast that allow you to register a company and create a business bank account at the same time.
There are three main types of business: a sole trader, a partnership, and a limited company.
A sole trader takes sole responsibility for their business. Any debts, unexpected costs, or after-tax profits are theirs – and theirs alone. This is called unlimited liability.
In legal terms, there is no distinction between the person and the business: they are one entity. This has its advantages: sole traders are subject to few restrictions, they are given the freedom to operate with relatively few checks and they have minimal day-to-day running costs.
On the other hand, any weaknesses you do have are likely to be exposed – you can’t paper over any cracks in your knowledge with the aid of a better-qualified partner. Sole traders often have to work long hours and take few holidays to keep their one-man business afloat.
If you’re looking for examples, hairdressers, plumbers, and electricians are all typically sole traders.
» A partnership
The likes of dentists, solicitors, and accountants are all likely to form partnerships. It allows the people involved to share responsibility for the fate of the business.
It also allows for increased specialization and different parties to handle different aspects of the business.
A deed of partnership that breaks down the amount of capital each party has invested into the business and then breaks down how profits and losses are distributed accordingly.
» Limited company
Choosing to form a limited company is the form the vast majority of businesses take. The primary appeal of a limited company – either private or public – is that the business itself becomes a legal entity. The business, rather than the founders themselves, take responsibility for all of its dealings - whether that’s entering into contracts, employing people, or taking on debts or profits.
This is called limited liability. Choosing such a company structure, whether you're starting a new business or converting a Sole Proprietorship to an LLC, is the preferred option for most businesses due to the benefits of limited liability.
To form a limited company, you need to register with Company House.
Regardless of the choice you make, you’ll want to turn to a convenient, painless service that allows you to enter all of the pertinent details quickly and painlessly. This is where an organization like MachFast comes in. An intuitive and simple design allows you to register your business with a minimum of fuss.
» The importance of branding
Branding can make a tremendous difference to the way your business is received. You can have the greatest product in the world but if your branding looks tired, dated, and stagnant, you’re unlikely to generate any interest at all. How are people meant to know how good your product is if no one has tried it?
In recent years, Apple has set the benchmark for branding. They have focused on producing minimalist, sleek campaigns. Every advertisement is carefully curated and their brand identity is instantly recognizable. The white background that featured in so many of their campaigns allowed the product to take center stage.
And the ‘I’ that prefaces every single product makes the brand immediately identifiable.
Your brand’s identity has to be consistent throughout. Mixed messaging can only serve to confound your audience. And when you first launch your business, you must have a clear idea of what you want to communicate with your branding.
Overcomplicated, messy messaging can make it difficult for customers to ascertain what your business actually does. Many of the best brands concentrate on simplicity. Getting your point across in as straightforward a manner as possible is typically the best way to go.
» Identify your target market
Once you’ve settled on your brand’s identity, you then need to go about engaging with potential customers.
With social media, live chats, and email, there are so many different ways to engage with your audience. Once you’ve burrowed down into your ideal buyer profile, you need to pick a few select platforms and focus your marketing efforts on this niche (depending on the resources you have available).
If you’re the kind of brand that appeals most to a younger audience, you might want to send targeted ads through platforms like Instagram and Facebook. They allow for an exhaustive level of specialization.
You can target users based on a dizzying array of parameters. It gives you the ability to really hone in on different demographics. For example, you can specify which users are shown your ads based on their age, location, likes, and recently interacted with accounts.
This degree of specialization gives you the freedom to directly target the demographic you think will be most interested in your business’ services or products.
» Get to know the competition
You have to take the time to delve into the competition in your industry. If there is a competitor with a stranglehold on the market – with an already established infrastructure and a loyal and growing base of customers – it may well be impossible to nudge them out of the way.
But if you’ve done extensive analysis of the state of the market, you might find that there is space for you to muscle your way in.
Regardless, you can glean a variety of valuable insights from doing competitor analysis. You can seize upon anything that your competitor has done well. You can either replicate their strategy or adapt it slightly to improve upon it. This could be anything from their SEO tactics to their sales copy.
» Find funding for your business
If you’re fortunate enough to be operating from a position of health from the outset, you can count yourself incredibly lucky. There are a number of other ways you can get your hands on the funding you need to kick-start your business. If you’re currently receiving any kind of benefit, you might even be eligible for a weekly allowance worth up to £1274 for half a year.
One of the most common ways budding entrepreneurs get their foundational funding is through a start-up loan. This government-backed scheme allows 16-30 year olds to get up to £25,000.
Another method of raising funding that has garnered popularity in the last few years is crowdfunding. Sometimes, a great idea is enough to spark interest in your company. The virtual reality company Oculus Rift got its start through crowdfunding – raising $2 million.
There was a massive audience captivated by the possibility of what their fully developed products could do and this financial leg-up gave them the best possible start. They went on to be acquired by Facebook for an astonishing $2 billion.
Sites like Kickstarter and Go Fund Me have made publicizing your need for funding easier than ever. As long as the idea is there – and you can garner enough interest and support – you can get the funding you need to turn your idea into a reality.
» Keep track of your finances
You do, however, need to manage your money with the utmost care. Costs can quickly spiral out of control, swallowing up your business’ prospects of continued success.
Maybe you’d be better served outsourcing your accounting needs to a firm that is equipped with the experience and technical know-how to manage your funds effectively?
You need patience, attention to detail, and unfailingly pristine numeracy skills to keep track of your outgoings and incomings.
There are so many different totals you need to document given the complexity of the UK tax system. In April, you’ll be asked to file a self-assessment tax return. Depending on your profits – and whether or not you’re an employer - you’ll need to pay a certain class of national insurance. If you’re a limited company, you’ll also need to pay corporation tax.
Once your business has an annual turnover larger than £85,000, you’ll have thirty days to register for VAT: you have to charge customers value-added tax and submit returns to HMRC every quarter.
» Build a website
Having an online presence in this day and age is nothing short of imperative. You can hire someone to code one from scratch or you can rely on a template from a provider like WordPress or Squarespace.
A website combines a lot of the things that we’ve already discussed: branding, customer acquisition, and differentiating yourself from your competitors. Your website is an extension of your brand. It should bear all the hallmarks of your brand identity – from the design and layout of the website to the tone of voice employed in the copy.
The importance of your website is, of course, determined by the kind of business you are planning to run. If it’s an eCommerce site, all of your marketing efforts should funnel customers over to your site where they can make a purchase. If, on the other hand, you’re opening a management consultancy, maybe all you need on your site are your contact details and an outline of your service.
When you have a website live you can then start to focus on driving traffic to it and building your brand even further. This is where SEO, PPC, Email marketing, or even hosting a podcast can bring your target audience to you.
Either way, a website gives you a much-needed online presence where potential customers can find out how to get in touch with you regardless of where they are.
» Don’t be afraid to ask for advice
Another important attribute any successful business owner has is humility. You have to be humble enough to ask for assistance when required. There is no point in being arrogant and headstrong when there aren’t sound business principles informing your every decision.
It isn’t expected that you’ll know every single detail. The success of a business is contingent on knowledge of so many different areas: from accounting to legal. Forging a path ahead based on an instinct or feeling is foolhardy.
There are always going to be business owners who have gone through the same difficulties you are going through now. Leaning on the help of more experienced, savvier business owners will help you sidestep any obstacles in your way. And getting advice from a variety of sources will prevent you from getting tunnel vision and getting fixated on any one particular route to success.
Hopefully, this piece has given you an outline of the different steps that go into launching a business. To make a success of it, you have to do a massive amount of research but as long as you have a genuine belief in your business idea and a solid understanding of the foundational pieces of a successful business, you have every chance of forging a successful future.
These tips should provide you with food for thought and point you in the right direction, if you’re looking for more detail check out this complete guide to starting a business from iFinance Department.