Whether you’re launching a fashion line, starting a tutoring business or opening a home baking service, there are some basic principles that apply to all startups. Read on to find out how to begin almost any business in ten steps.
1. Hone your idea
Your first step is to really refine and polish your idea from its ore. Work out exactly what your product or service will be, and its unique selling point. Does it fill a gap in the market, or improve on an existing product by being better, faster or cheaper? Think about your name, branding and mission. If your business involves creating a new product, this is the time to prototype it.
2. Research and get feedback
Once you have a very strong idea of your offering, do thorough research into the field, materials, suppliers, clients, competitors and emerging trends. Find out whether anyone is doing the same thing – if not, why not? Ask consumers about existing products and get their suggestions for improvement.
Get honest feedback on your own product, and see how people interact with it. The results might be disheartening or unhelpful, but it’s essential to take notice. Be open to criticism, ask questions and try to process bad feedback logically. If somebody hates your product, it’s not a reflection on you; it’s a sign that some aspect needs to be improved.
3. Write a business plan
Your business plan will cover every aspect of you, your business, the current market and how you will conquer it. Writing a business plan will help you to distill your idea. It’s essential to be able to show a clear, thorough business plan to investors, lenders and collaborators. Learn how to write a business plan.
4. Assess your financial needs
After writing your business plan, you should have a very strong idea of where you are financially and whether you need additional funding to go ahead.
Depending on the amount of funding and the nature of the business, your options will vary – many startups go through accelerators or look for angel investors, while others choose to take out smaller loans or pitch to family and friends. Many funding bodies focus on social enterprises, local businesses and underrepresented groups. Still others are able to crowdfund their ventures – it’s difficult, but may suit ideas that are community- or interest-based.
5. Check insurance and legal requirements
Regulations and precautions will vary wildly depending upon your sector – for example, a food business will require an examination of premises and insurance to cover your premises, staff, equipment and customers. An online business carries fewer risks, but you should be aware of GDPR and consider insuring yourself against cyber fraud. Check GOV.UK for advice specific to your industry.
6. Make it official
This step can easily feel overwhelming to new entrepreneurs, but thankfully everything is quite straight forward.
Most British business owners choose to operate as a sole trader, or register a limited company.
A sole trader is simply a self-employed person who reports their earnings once a year. A sole trader can have employees, but they are the only decision-maker. They don’t have shares, and they pay income tax. Learn more about operating as a sole trader.
A limited company is a company that is registered with Companies House. The decision-makers are appointed as directors, and hold shares in the company. Registering a company keeps finances separate, so directors are not personally responsible if the business fails. They pay corporation tax. Learn more about limited companies.
Once you’ve registered your business, open a business bank account. You’ll also be ready to apply for any necessary permits, trademarks, licenses and a VAT number.
7. Manage your cash flow
It’s important to get your system into place before you start trading or making large purchases – it will make your tax returns far easier. A simple spreadsheet is enough for many new businesses, or you might prefer to use an app like QuickBooks or Pandle.
8. Secure your resources
Now it’s time to move onto material matters – including but not limited to any premises, office space, equipment, staff and training necessary to start operations.
9. Start selling
The first customers are the most difficult – it could take months of pitching, calls and schlepping your product around town before you secure your first clients and stockists. Persist, and when you succeed, use that momentum to make more leads.
Don’t be afraid to get out there and do demonstrations, give samples or knock on doors. It’s better to be rejected and gather valuable feedback than to hope people will come to you.
10. Hold onto your customers
Every successful businessperson knows that there are two key factors for growth: marketing, and retention. It’s important to promote your business, build up a public image and target new customers, but equally or more important is holding onto your existing customers. Your existing customers already know and buy from you; make them feel valued. Let their feedback guide you.