How to start your own business
Having a million pound idea is one thing, actually making it a reality is another. If you’re truly serious about bringing your vision to life there are loads of things that you have to think about. How are you gonna cover costs? What are the chances of success? Well, we’ve got the answers to all that and more as we explain how to start your own business.
Worried you’re too young to start your own business?
We don’t mean to scare you, but there are tons of reasons businesses fail: bad planning, a market crash, failing to market properly. Thing is, being 21 isn’t one of them. So don’t let age stop you from going after your dreams. The time to start is now.
Having said that, before you commit to ANYTHING, you need to work out if your business is actually a good idea. Sure you may think it’s the best thing since sliced bread, but will other people agree? To help you figure that out, take your idea, and ask yourself these questions:
- What type of business is it? What does it do? Do you offer a product or service?
- Why would people want or need your business? And, most importantly, who would your potential customer base be?
- Why is your business better/different from any competitors? What is your USP?
- How would your business make money? And when?
- Will your business grow and expand over time? How?
- What legal things do you need to consider? Health and safety, patenting, licensing etc.
Writing a business plan
Once you’ve got the answers to all these questions and made sure that the business is viable, it’s time for the next step. First, you’ll need to put together a business plan. This is really important as you’ll need it to show potential funders. Plus, it’ll help keep you focused on the direction you’re supposed to be headed. If you’re feeling slightly overwhelmed by the prospect, The Princes Trust website has a great business plan guide and template which you can download and fill out here.
Gov.uk also has some useful articles about business plans, as well as detailed information about registering your business and how to get a business started. We really recommend you read all of this before you get cracking. As cumbersome as some of it may seem, it’s essential that you understand this stuff when figuring out how to start your own business.
Getting funding for your business
Congrats, you wrote a business plan! Now onto the next phase. A business bank account and some money to get everything started is a must for new business owners. For some advice on this, read our article about funding your own business.
Positives of starting your own business
There are loads of perks to being your own boss, including:
- If it takes off, you can make that coin. Like A LOT of coins.
- Freeeeeeeeeedom. You’re the boss which means…you don’t have a boss. No more justifications for your actions necessary (apart from, occasionally, justifying that ‘business expense’ to the bank manager).
- Flexibility. You’ll be able to create your own working hours and life that suits you.
Negatives of starting your business
- There’s no job security. If your business doesn’t make it, your job doesn’t either.
- It’s a big financial risk. You could lose everything or gain everything and then some.
- Starting up on your own means putting in the long hours. The fate of your business rests in your hands. You have sole proprietorship and personal liability for the entire thing. So a seventy hour working week is pretty standard when you start running a business.
Why your business might fail
Sad though it is, most businesses fail in their very first year. This doesn’t mean yours will though. Here are some of the most common reasons people go under. Now please go forth and use this free business advice wisely:
Bad business plan
If you haven’t followed the steps set out by the Princes Trust to make a watertight business plan, you’re in trouble. Failing to do the necessary research into the market, or planning about goals and financial targets will make investors lose any kind of faith in you. Not to mention, you’ll have zero clue what you’re doing 99% of the time.
Running out of cash
Sounds silly, we know. But lots of the time, businesses only plan for enough money to last them one cycle – thinking profits from that will pay for the next. Problem is, if you get unforeseen extra costs, or don’t sell as well as you wanted to, then you’re out of cash. And can’t afford another cycle. To stop this from happening to you, make sure to keep a certain amount of money aside for rainy days.
You’d be surprised at how easily this gets overlooked. It goes without saying, but we live in a digital world and your business needs to have a digital element. At the very least, you’ll need a well-designed website letting customers know exactly what you do.
Ideally, you would have an entirely digital business. This includes everything from social media to email marketing. That way you get to exploit all those weird and wonderful niches the internet creates. Remember, marketing and sales go hand in hand to create a successful business.
Want to learn more? You might also be interested in our article on becoming self-employed here.
By Holly Bourne
Updated on 10-Jun-2022
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