A COMPLETE GUIDE TO STARTING A BUSINESS
Is Your Business Idea Viable?
No matter how strong your gut feeling is, any potential business idea warrants a period of careful thought, research and planning. Is there an established market for the product? How big is this market? Who are your customers going to be and, perhaps most importantly, why are they going to choose you over anyone else?
HOW DO I KNOW IF MY BUSINESS IDEA WILL WORK?
Remember, having a great idea isn’t enough by itself. It doesn’t matter if it’s your passion, or if you’ve come up with a clever gap in a lucrative market, the company will fail if you don’t have the business acumen to make it work.
This is the part of the process where you do your due diligence and research. Consider marketing, pricing and cost base, and calculate whether you have the money to bring the vision into reality.
You also need to ask yourself some tough questions about whether you have the attitude, as well as the aptitude, to succeed. Even if all the figures add up, and you are confident of your business skills, you need to be aware of how much energy, endurance and commitment it will take to run a profitable business.
WHAT SUCCESSFUL BUSINESSES HAVE IN COMMON
Success comes from an elusive combination of skill, drive, passion and persistence. Without any one of these, you could become one of the 40% of businesses which don’t survive beyond the 5 year mark.
Swot analysis on your business idea
One useful process for establishing the viability of your business idea is to run a SWOT Analysis, which is a classic method of listing: Strengths, Weaknesses, Opportunities and Threats in a clear visual matrix.
On a piece of paper list:
Threats to success
The key thing to remember about SWOT Analysis is that each section is intimately connected. Strengths create opportunities, weaknesses can be converted into strengths, and threats can be neutralised.
Conclude your analysis with the creation of an action plan outlining clear steps for moving forward.
Creating a Business Plan
Just as no one would build a house without first drawing up architectural plans, the business plan represents an essential foundation for what you are about to create.
HOW TO WRITE A BUSINESS PLAN STEP BY STEP
These don’t have to be huge documents, but they should be clear, logical, precise and professional. Whether or not you need to show it to anyone, it is an idea to number it, put a cover on it, and include a contents page. Create the business plan with the care and professionalism it deserves as an exercise in preparation.
When executed correctly, the business plan offers a road map to achieving your business goals and objectives. They should include:
- A summary of what you’re trying to achieve
- Market Analysis
- Business and management structure
- Sales and Marketing Strategy
- Funding and Costs Requirements
- Financial Projection over 5 years
- Appendix document
It is not a one-off piece of work either, to be filed away upon completion. The best business plans are living documents, which you can use to monitor progress, and adapt as the business takes shape.
We recommend the excellent template found on the Princes Trust website here.
Where to Get Start-Up Advice
Whether you need practical advice about hiring, finance, employing staff or IT, or access to accelerator programs for hands-on coaching, there are a variety of organisations in place to support startups.
Entrepreneurial Spark – Funded by private capital, this not-for-profit social enterprise is now the world’s largest free business accelerator.
Federation of Small Businesses (FSB) – The FSB focuses on helping small businesses via advice, insurance, banking, networking and lobbying. Their Business Creation package offers a wealth of benefits for startups for £133.
New Entrepreneurs Foundation – Combining training, mentoring and coaching, this competitive programme selects only 30 individuals per year to receive an intensive training for success.
Unltd: This accelerator is aimed specifically at socially focussed entrepreneurs. Visit their site to learn about their funding, mentoring investment and support.
Chambers of Commerce – Your local chamber of commerce is a great place to start. These organisations are well connected to local business communities and are ideal places for advice, networking and training support.
Finding a Business Mentor
Mentors are an incredible resource for new business owners. The advice of a seasoned professional (and especially one with experience in running a company) can be the difference between turning a profit quickly, or closing within a year.
For many people, the right mentor may be as close as combing through your existing network of contacts and resources, and emailing people. Many successful people remember the struggle they had to make it, and may be open to sharing their experience. It’s worth remembering, too, that the right mentor doesn’t have to be in your specific industry. Though that is the ideal,
Here are the best ways to find a business mentor, both through traditional channels and via your own network.
Mentorsme – Operated by the Business Finance Taskforce, this website is designed as a portal to facilitate connection with mentors in your region. A valuable resource with over 27,000 listings from people who have all committed to giving one hour of their time once a month for 2 years.
The Institute of Enterprise and Entrepreneurs – Set up in 2010, the IOEE was the first dedicated learning institute for entrepreneurial support. Their affiliate membership, at £5 per month, gives access to online mentoring.
Planning & Registration
How to Set Up a Business
With the planning stage complete, the next step is to put the practical measures in place.
That includes everything that’s necessary to turn your idea into a business that can trade legally in the UK and meet all of its tax and accounting obligations along the way.
There are a number of important decisions that must be made, from the legal structure your business will take to the business’s name and finding a suitable place for it to be based.
Depending on the type of work you’re planning to do, there may also be certain licenses or permits to apply for or insurance cover that’s a legal requirement in your industry.
Limited Company, Partnership or Sole Trader
One of the first decisions that has to be made is to choose the legal structure of the business. There are a number of options open to you, all of which have their own legal, taxation and accounting requirements you must be aware of. Your four key options include:
- Sole trader
- Limited liability partnership (LLP)
- Limited liability company (LTD)
Sole traders and partnerships are very similar business structures with one important difference. Sole traders are businesses with one owner, whereas partnerships can have anything from 2-50 co-owners.
Both sole traders and partnerships are easy to set up and run. The business has to be VAT-compliant, you must pay PAYE and National Insurance to HMRC if you have any employees and you also have to file a self-assessment tax return every year – but that’s where your obligations end.
There are also far fewer financial restrictions. You and the business are considered to be one and the same. That means you can take money out of the business’s bank account and pay it into your personal account (and vice versa) whenever you like.
Limited liability partnerships (LLP) tend to be used by businesses that provide professional services such as accountants and legal firms. They have some of the characteristics of a conventional partnership, such as the distribution of profits and the tax liabilities, but also benefit from limited liability just like a private limited company. Limited liability ensures that the liability of the co-owners for financial losses or company debts is limited to the amount they originally invested in the firm.
Private limited companies (LTD) are separate legal entities in their own right. That means your personal finances and the finances of the business must be kept apart. The company is owned and controlled by its shareholders and you can choose who to allocate the shares to when you incorporate (register) the business.
A private limited company must be registered at Companies House and certain standard legal documents that govern how the business operates must be created. Annual accounts must also be filed and corporation tax has to be paid. This brings additionally complexity and cost. However, private limited companies are more tax efficient and you are not financially liable if things go wrong.
Registering Your Business
Starting a business from scratch is hard work, so it’s essential you take the necessary steps to protect everything you create along the way. If you fail to register important details such as your business name, web domains and trademarks, it makes it much easier for your rivals to imitate everything you’ve done so far.
Registering your company is one of the first procedural steps you will need to take. Sole traders are not legally required to register with Companies House. However, if you fail to register your business, there’s nothing to stop someone else registering a business with your chosen trading name.
Limited companies are legally required to register with Companies House. The process is relatively simple and can be completed yourself, although there are third-party registrars who will handle the registration process for a fee. To register, you will have to provide your company name, address and details of the company directors. You’ll also have to create and submit the memorandum and articles of association.
These days, a website is an essential part of almost every business. The first step in creating your online presence is to register a domain name. A domain name is the [yourbusinessname].co.uk, .com or .net address that customers use to find you online.
Purchasing a domain name is simple and relatively cheap in most cases, but it’s important you get one that’s memorable, short and easily identifiable. To buy a domain name, visit a registrar such as GoDaddy or 123-Reg, key in your domain and pay a fee. The domain has to be renewed every year.
You can also register a trademark to protect your business’s name, brand and products or services. You can trademark:
- Domain names
- Any combination of the above
You should first search the trademarks database to see if anyone has registered a similar or identical trademark for similar goods or services. Once registered, you can take legal action against anyone who uses your brand without permission and display the ® symbol next to your brand.
Licenses and Permits
Some types of business require a permit or licence in order to operate legally. That commonly includes businesses that engage in the sale of tobacco or alcohol products, but other forms of licence are necessary for businesses that include:
- Taxi firms
- Driving instructors
- Security businesses
- Sports coaches
- Importers and exporters
- Child care providers
- Food preparation businesses
- Manufacturing firms
- And many more…
The business owner has to apply for the necessary licence or permit from the local authority that governs the area the business is located in or the trade body for the sector concerned.
Serious responsibilities are associated with running a business that requires a permit or licence and breaches of the law can lead to fines and even the closing down of the business. For that reason, accredited qualifications are usually required before permits or licences are granted. You can use this licence finder to find out what licences you need for different trades and sectors.
Finding a Business Location
Depending on the nature of your business, you may be able to save on the cost of renting a commercial property by running it from home. Even if you do choose to operate from your existing residential property, there are still some factors to take into account.
For example, if you plan to run a business from home then you may need permission from your mortgage provider or landlord. If lots of customers will be visiting your home, you’ll be accepting regular deliveries or you want to advertise outside the property then you may also need permission from the local council. There’s also insurance to consider as your home insurance policy may not cover business equipment, stock, computers and any other items you use in the course of work.
When running a sole trader or partnership from home, you should include a proportion of your household costs like council tax, electricity, heating and broadband in your allowable expenses on your self assessment tax return.
If you do choose to rent a commercial property for your business then this is something you need to think about seriously. The location of your premises can help you attract customers and employees, while the suitability of the building itself can influence productivity. You should also consider how the decision to lease or buy your premises will impact your costs, and think about the level of flexibility the building will give you if your requirements were to change in the near future.
There are a number of legal responsibilities that come with renting or buying your own commercial premises. You will have to carry out a health and safety risk assessment and remove any hazards that pose a danger to you and your employees. You will also be responsible for fire and gas safety and the safety of electrical equipment. This short guide from the Health and Safety Executive will help.
Choosing a Name for Your Business
Choosing the right name for your business can be surprisingly difficult. If you have a strong product or service and have identified a gap in the market, you might think that’s all you need, but your business name is still extremely important.
When researching business name ideas, you need to think carefully about what will work for marketing and legal purposes. It should not be similar to any other businesses in your industry and also be easily identifiable so your customers can quickly work out what it is you do.
If you intend to operate only in the local area, incorporating that area into your business name can add a friendly and reassuring element to the business. Ideally, your business name should also be short, snappy and instantly informative to draw customers to your business, while also being trustworthy and professional.
Sometimes, business owners try to be too clever and risk confusing their customers, so always keep it simple. While it might be tempting to include your own name in the business’s moniker, that can restrict your branding opportunities and give customers the impression that it’s a small, one man band rather than an established business.
The law of ‘passing off’ prevents you from choosing a business name that is identical or similar to a business operating in your industry. You can search the Companies House name checker to make sure your name has not already been registered. You should also consider trademarking your business name to protect it from other firms that may try to use it in the future.
Tax, Insurance & Employees
The prospect of having to keep financial records and produce company accounts can be really daunting for some business owners, but this process doesn’t have to be an ordeal. Every business owner is legally required to keep financial records for six years, but the type of accounts you must produce depends on the legal structure of your business.
If you run a sole trader or partnership then there are minimal bookkeeping, accounting and filing requirements. That means the costs associated with accounting are typically lower than a limited company as you may be able to meet your accounting obligations yourself using a spreadsheet or simple accounting software.
It’s incredibly important that you keep a record of all your business’s income and expenditure from the outset so you can file and pay your taxes accurately and on time. You should also keep all your receipts and invoices to help you complete your annual self assessment tax return. If you employ people then you also have to keep a record of everything you have paid them, including wages expenses and benefits.
The accounting requirements for limited companies are more demanding. You must produce statutory accounts at the end of the business’s financial year that includes:
- A balance sheet
- Profit and loss account
- Account notes
- Director’s report
The accounts have to be filed at Companies House and sent to the company’s shareholders and HMRC. You must also complete a company tax return that must be filed with HMRC and paid every year. Limited companies are also legally required to have a separate business bank account.
Due to the complexity and the time it takes to prepare these accounts, the vast majority of limited company directors hire a small business accountant to prepare and file their accounts on their behalf. That ensures they are of the required standard but does add to the business’s costs.
Setting up a Business Tax Account
You’ll certainly have no shortage of things to do when starting your business, but one of the most important tasks you must remember to do is to register your business (sole trader or partnership) with HMRC for tax purposes.
The simplest way to register your business is to visit the HMRC website. Once you’ve registered, you’ll receive a 10-digit unique taxpayer reference that you’ll need whenever you contact HMRC. If you are setting up a limited company then you have to register with Companies House instead.
All business owners are responsible for submitting their own tax returns and ensuring all taxes are paid when they’re due. Sole traders and those in partnerships pay taxes on business profits by submitting a self assessment tax return.
As the owner/director of a limited company, you have to register for and complete a self assessment tax return and register to pay corporation tax on business profits. You must register for corporation tax within 3 months of starting to do business.
All businesses that have an annual turnover of more than £85,000 must also register to pay VAT. In some cases, you may decide to register for VAT even if your income doesn’t exceed the threshold. That’s because having a VAT number could add credibility to your business.
If you operate as a sole trader or partnership then you’ll pay Class 2 and Class 4 National Insurance contributions through your self assessment tax return, but you are not affected by PAYE. You will only need to register for PAYE if you have employees. If you run a limited company then you are treated as an employee and have to file PAYE and National Insurance information in real time.
When you set up a business, there are certain policies you are required by law to put in place. That will depend on the type of business you run and the industry you operate in. There are also a number of policies that although optional, could provide invaluable protection for all your hard work.
If you employ any person other than an immediate family member then you are legally required to put employers’ liability insurance in place. That even includes workers you employ on a short-term or casual basis. Employers’ liability insurance provides cover against the cost of a compensation claim arising from an employee who becomes ill or suffers an injury through their work. Failure to put employers’ liability insurance in place could lead to a fine of £2,500 for every day you’re not covered.
Many small business owners also choose to take out public liability insurance, particularly if customers regularly visit their premises. Public liability insurance will protect your business against the cost of a compensation claim from a third party who is injured or whose property is damaged by your business activities. Although public liability insurance is not a legal requirement, it could prevent the closure of your business if a claim is made.
Professional indemnity insurance is another policy many businesses decide to put in place. If your business provides a professional service or advice to clients, this policy would protect you against claims from clients who are dissatisfied with the service or advice you have provided. Although it’s not a legal requirement, professional indemnity insurance is mandatory for members of some professional bodies and is required by regulators in certain industries.
If you are part of a recognised profession then you should check what policies they insist or recommend you hold. Other more general policies you may wish to consider include product liability cover, buildings insurance for your premises, goods in transit insurance and plant and business equipment cover.
When you start your own business, you’ll face a number of tough challenges and decisions, some of which you may not feel equipped to make. Using a professional adviser or even accessing some of the free support available could save you time and help to avoid a costly mistake.
There are a number of national providers of free business support available online. The Companies House website provides guidance and all the forms you’ll need to set up and run a limited company. It also provides detailed information about your filing obligations and advice on maintaining company records.
The HMRC website contains a wealth of information on all aspects of the filing and payment of tax for sole traders, partnerships and limited companies. That includes everything from VAT and PAYE to corporation tax and self assessment tax returns.
There are also a number of regional providers of free business support. Those starting a business in Scotland can seek assistance and advice from Business Gateway, those in Wales can turn to Business Wales, while business owners in Northern Ireland can access the Invest Northern Ireland website.
Many business owners choose to access paid-for support services. One of the most common is a small business accountant. Although you don’t need an accountant to set up your business, filing end of year accounts is more complicated. Small business accountants can take care of the filing for you and handle your VAT and PAYE obligations. The time they save you could outweigh the costs.
A number of entrepreneurs also access the support provided by a business mentor. They are usually successful entrepreneurs who may have specific experience in your industry. While some business mentors charge, others may provide their assistance for free.
Hiring staff is an exciting time and a significant landmark for any start-up business. It’s a sign that things are going well and demand for your products or services exceeds what you can deliver alone. However, the process itself needs to be handled carefully. There are a number of legal and financial considerations you’ll have to take into account when hiring a new member of the team.
Before you make the decision to hire, you must have a basic understanding of employment law and put the necessary statutory requirements in place. That includes a written contract, an itemised payslip, pay that is at least the national minimum wage and the right to at least 28 days paid holiday (including bank holidays).
Employers must also automatically enrol workers into a workplace pension scheme if they earn more than £10,000 per year. You’ll also need to register as an employer with HMRC when you start employing staff to get your employer PAYE reference number. That must be done before the first payday. You’ll also have to invest in an employers’ liability insurance policy.
Apprentices & Trainees
Budgets for start-ups are inevitably tight and good employees do not come cheap, but there are some cost-effective recruitment options available to new businesses. Internships are one potential solution that can be a win-win for start-ups.
You get an extra pair of hands to fulfil a short-term employment need and benefit from the enthusiasm, new ideas and range of skills an intern can bring. Internships can also be an effective way to identify candidates that could be perfect for a permanent role in the company as an apprentice or trainee.
Interns can be recruited in the same way as you’d fill any other vacancy. You simply place an advertisement and invite applications, shortlist candidates and conduct interviews. The government-run Graduate Talent Pool is a great place to start your search.
If you’re looking to recruit permanent staff then an apprentice or trainee is a cost-effective way to hire an individual who can develop into an important member of the team. Some start-up businesses are hesitant to take on apprentices and trainees because of the red tape they believe is involved, but it can be an excellent way to fill a skills gap.
You can gear the training apprentices and trainees receive to your particular business needs. They can also help you stay up-to-date and relevant, particularly when it comes to digital skills.
Financially, you can benefit from the reduced national minimum wage apprentices receive and employers you do not have to pay Class 1 National Insurance contributions for apprentices under the age of 25. There’s also an Apprenticeship Grant for Employers that’s worth £1,500 per apprentice.
What are the allowable costs for employers, including listing the items that can be tax deductible expenses
One of the biggest costs for many small businesses are the expenses associated with being an employer. The good news is that many staff costs are deductible when calculating the profits of the business, which will reduce the amount of tax you have to pay.
The following are examples of staff costs that can be deducted from your profit at the end of the year:
Wages and salaries – The primary costs of employing staff are the wages and salaries they receive. Wages and salaries are deductible when calculating the profits of the business which can reduce the tax liability considerably. The National Insurance contributions you pay as an employer are also tax deductible.
Pension contributions – As an employer, you must automatically enrol your staff onto a pension scheme and make contributions to the pension if the employee is eligible for automatic enrolment. The contributions you make to an employee’s pension are tax deductible as long as they are incurred wholly and exclusively for the purposes of the business. Pension contributions must be included in your profit and loss account and will lead to the profit being reduced.
Benefits in kind – The pay packets of some of your staff may include non-cash benefits such as a company car or private health care. The costs you incur in providing these benefits can be deducted from the profits of the business. Class 1A National Insurance contributions must be paid on benefits provided to employees (unless the benefit is exempt). These can also be deducted from the business’s profits.Statutory payments – Statutory sick pay, maternity pay, paternity pay and adoption pay will have to be paid at some point by most employers. These costs are deductible from the profits of the business. Depending on the size of the business, you may also be able to claim some of the costs of statutory payments back from HMRC.
Tax Relief & Incentives for Business
As a new business owner, the better informed you are about the financial landscape you’re working in, the faster your can grow. Part of this is understanding the range of incentives and tax breaks in place for entrepreneurs.
Here are some of the main ones:
Business Rates Relief – For small businesses who own their own property, business rate relief is there to make life easier. Check the link provided to see the options or contact your local council for advice
Capital Allowances – This is the most useful one for many small businesses, meaning you can claim 100% tax relief on machinery or equipment used in the running of your business.
Enterprise Zones – These are designated areas around the UK where the government has introduced specific policies, including tax breaks, to facilitate business growth. They are particularly prevalent in areas in need of economic stimulus and could offer tremendous benefits to the right kind of business.
Seed Enterprise Investment Scheme – This government backed scheme offers tax reliefs to individual investors who buy new shares in your company as a way of encouraging investment.
Employment Allowance – Employees could get up to 3k off their National Insurance per year. Check the government website to establish your eligibility.
Corporation Tax Relief for the Creative Industries – Those working in film, music, animation, gaming or art may be eligible for tax deductions.
R & D Tax Credits – Money spent on innovation may be claimed back as tax credits via this government scheme to reward those advancing their field.
Patents – For companies earning money via patented innovations, there are lower rates of corporation tax available.
Regardless of the sector you operate in or the size of your business, as an employer, it is essential you meet all of your legal obligations when paying your staff. You must pay every employee at least the minimum wage and produce a physical or digital payslip for every employee on or before their payday.
You must also make all the necessary deductions from staff pay. That includes National Insurance, student loan repayments and pension contributions. Employee pay and the deductions must be reported to HMRC in a Full Payment Submission (FPS).
The good news is that much of that process can be automated through the use of small business payroll software. That will help to make the payment of employees quick and efficient and ensure you remain compliant with all the regulations.
Deciding how much to pay employees is another important consideration for business owners.
You won’t have the budget to compete with larger organisations in your industry when it comes to salaries, but you do want to pay key employees enough so they stick around to fuel business growth.
To establish a benchmark, you should consider some of the following factors:
- What do competitors pay for similar positions?
- What is the cost of living in the city you operate in?
- Is an experienced employee taking a risk by joining a start-up business?
- Will you be able to increase the salary over time?
With the cost of recruitment high, it could be a false economy to pay below the going rate in your industry. Creating a flexible and equitable pay scale and establishing a clear path to promotion will help to prevent your top performers from joining the competition.
Funding your Business
Finding a reliable source of external funding is a priority for many start-up business owners, but raising the money you need can be challenging. The banks used to be the first port of call for new businesses looking for funding, but bank finance is difficult to secure these days. Thankfully, there are a number of other options:
Family and friends – Investment finance from family and friends in return for equity in your business is a good place to start. You’ll be able to access the funds quickly and negotiate a competitive deal, but as they are unlikely to be sophisticated investors, you may not benefit from any advice or support.
Start-up loans – Although bank finance for start-ups is more difficult to come by these days, there are other organisations such as local authorities and small business associations that may provide funding in the form of a loan. The terms and conditions of the loan will be clearly defined so you will know exactly how much you have to repay. However, you may be limited as to how you can spend the money and it may take some time and effort to secure.
Grants – Grants are an excellent source of start-up finance as it’s money that doesn’t have to be repaid. Start-up grants are available from government or EU-backed initiatives such as InnovateUK, Horizon2020 or British Small Business Grants. Securing a grant can help to raise the profile of your business with investors and prospective clients. The downside is that the process can take time and not all businesses will be eligible.
Angel funding – Angel investors are experienced individuals who inject capital into start-ups in exchange for equity in the business. They may invest through crowdfunding platforms or through investor networks that pool capital form a number of angel investors. They tend to be experienced entrepreneurs who can add value to your business in the form of support and guidance. However, in return, you will relinquish some control of your business. The UK Business Angels Association is a good place to start your search.
It & Marketing
As a start-up business, the ability to attract and convert new customers is critical to your success. Unfortunately, regardless of your sector, there’s also a tremendous amount of competition out there, both from new businesses like you and larger, more established rivals. So how do you cut through all that noise and get your message across to consumers? That’s where marketing can help.
The good news is there are now more marketing tools at your disposal than ever before. Gone are the days when you needed a colossal budget to compete. You can now use social media, pay-per-click advertising and email marketing to compete with much larger companies, even on a shoestring budget. But before all that, you need a plan.
A marketing plan is a detailed document that sets out everything you need to know to market your business effectively. It should include:
Market research – Conduct primary and secondary research to determine the market size, market growth or decline, current trends and buying habits in the industry.
Target market – A well-defined target market will identify who you hope to sell your products and services to.
Positioning – How will you position yourself in the market? Will your products and services be the best, the cheapest or the most innovative? Determining your market position will help you clearly communicate your offering to your customers.
Competitive analysis – You need to know your competitors inside out. How are their products and services different? What price do they sell at? What segment of the market are they targeting? How do they market their products? Competitive analysis will provide valuable insights and help you stand out in the market.
Marketing strategy – How will you find and attract your customers? This should break down the marketing techniques you’ll use to reach your sales goals.
Budget – It’s essential you develop a monthly budget for your marketing spend and a return on investment (ROI) you expect to generate before you pull the plug on a particular campaign.
Metrics – How will you measure the success of your marketing campaigns? Conversion rate, cost per lead and website traffic are just a few important metrics to consider.
Setting up Your Business’s IT System
There are few very, if any, businesses these days that don’t need to consider IT as a fundamental part of their structure. Even if you’re technology averse, this is something you’re going to have to get your head around and of course there’s a lot of help available if you need it.
For a small business, a good laptop and a cloud based server are excellent places to start. Google offers 15GB of free space in Google Drive which is an ideal place to store key documents, and organise your business. Google’s G-Suite offers best in class email also making it more than enough to manage digital communication and data storage for most businesses.
A solid antivirus and firewall is a basic necessity these days, and you need to remain vigilant with your passwords, opting for complex strings rather than using one obvious word as the key to your entire kingdom. Online tools like Password Generator are a useful start, and you can use Last Pass to remember them all.
Of course a good IT company can be a useful asset, offering hardware and software support, as well as security, backups and reporting.
How to Make the Business Profitable
Generating profit consistently is the holy grail of any business, and it begins with understanding some basic accounting. Once you’re understand the meaning of profit margins, profit drivers, and the cash flow cycle, you will have the language with which to measure your growth. Even if you have a great accountant in place, getting your head around these is a worthwhile endeavour.
Once you have a basic grasp of the financial concepts central to running a business, you can focus on strategies to make your business more successful.
Productivity – This is a science in its own right but focussing on how to get the best performance out of both yourself and your team can make a huge difference. Tech companies like Apple and Google are good people to learn from in this regard, utilising cutting edge strategies to manage time, talent and energy.
Customer Service – Companies like Zappos and Amazon have set incredibly high standards for customer service, positioning it at the heart of their company culture as well as their principle marketing tool. Zappos focus on ‘customer obsession’ eventually led to their acquisition by Amazon for $1.2bn.
Cut Waste – This is the same as productivity, in some regards, since cutting waste means making what you have go further and hence increases profits. Putting the environment first is always a good marketing tool also.
Increase Your Turnaround Time – How can you do what you do faster, without compromising on quality? Automation may be a strategy to investigate, and one with a direct impact on the bottom line.
Analyse each variable for its impact on profit – While more difficult to measure, the indirect variables such as how you generate leads/sales, the conversion process, size and number of transactions, profit margin and cost of acquisition are all supporting elements beneath your company’s success.
How to Set Up Google My Business
Google my Business (GMB) is a free business profile on Google which can help your online visibility.
Once you register for this your business will have its own map listing, meaning it can be found when people search for either your business or the services you offer.
Setting up your profile is a relatively straightforward affair and worth doing both for businesses whose customers visit them at their premises, and for brands with a registered office address.
Here are the basic steps
- Sign into Google with the account you wish to use, or create one if you don’t already have one.
- Visit https://www.google.com/business/ and hit the ‘start now’ button
- Fill in your business details as fully and accurately as possible.
- Wait for verification postcard to arrive, then enter the four digit code within your GMB account.
- Once verified, your listing will be live.
- Optimise your listing (to receive more visitors) by adding photographs and video of your business, responding to Q & A’s, and encouraging your users to leave reviews.
Building a Website
These days, a business really can’t survive without a website. It allows you to reach customers globally, 24-hours a day, and helps you win new and repeat business. Initially, the thought of creating a website might be daunting, but once it’s up and running, it requires very little maintenance and can be an incredibly powerful and cost-effective marketing tool for your business.
The first thing to think about is the type of website your business needs. If you plan to sell products online then an e-commerce site is essential. That will allow customers to select and buy products from your website and make payments online.
There are a number of e-commerce website builders like Shopify and freewebstore that you can use to create your own site. The process is relatively straightforward but it will take time. Alternatively, you could use the services of a web design agency. They will be able to create a more professional looking site, albeit for a price. You will also have to set up a merchant account with a provider such as PayPal or even your bank.
Alternatively, a brochure website might be a better fit for your business. A brochure site allows you to advertise your products or services online and encourages customers to contact you to find out more and make a purchase. This type of website tends to be cheaper and simpler to build than an e-commerce site. Again, you can choose to create your own using a DIY builder like Site123 or WordPress, but you will achieve better results by contacting a web design agency or even a freelancer.
When choosing a website designer, you should always seek recommendations from personal contacts, look at examples of their previous work and ask for a full breakdown of costs. Crucially, once the site is complete, make sure you know how to update and add content to the site yourself to avoid further costs.
Paid Advertising and Social Network Accounts
Like it or not, the ease and efficacy of the web for generating business leads is unmatched. While won’t work for every business, a large proportion can benefit from Google’s powerfully targeted ad platform.
Google have also invested heavily in making it easy to potential advertisers to dip their toes in the water, via £75 of free credit, and a useful helpline where specialists can talk you through the process of setting up your ads.
Of course, Google isn’t the only player in town. Facebook, Instagram and Bing and LinkedIn are all worth considering. If any of these tools are used appropriately, they can bring customers to your door both quickly and easily. Just remember to keep a tight handle on the ROI to make sure your costs don’t spiral.
Social Network Accounts
Social networks are useful for branding, customer communication, and content marketing, as well as direct sales. How deeply into this you should invest will depend on what niche your working in, and whether you have the staff and time to focus on social media.
If you do, it’s an investment which can pay dividends but you should remember that, while these networks are largely free, they take a lot of time to make work. As part of your business plan, you should consider whether you actually need this and, if so, how much effort and skill will be needed to make them work for you.
Think of the social world as a new country you’re expanding into. Just as with any geographical expansion you need to understand the lie of the land, the habits, attitudes and culture if you’re going to succeed.
Spend time analysing the influencers in your business niche, then create a targeted plan for expanding your reach, creating content, building your audience and measuring results. Given how saturated these platforms now are, it’s also worth allocating some budget, if you can spare it, to boosting content to make it is seen
While marketing campaigns, a website and social media is an excellent way to get your name out there, sometimes nothing beats the personal touch. Networking is an excellent way to build valuable business contacts and share ideas with other entrepreneurs in the local area.
As well as making connections that generate sales for your business, you can also meet people who can provide you with the services you need to grow. That might include a local small business accountant or an online marketing consultant who can help you generate leads online.
For start-ups and small businesses, networking can become a valuable source of support and advice in those early days. You can discuss common issues like hiring and firing, legal and regulatory challenges and customer services and benefit from the experiences of those in the group.
Business networking has enjoyed a revival in recent years, and as such, there are a whole host of different networking groups and events you can attend all over the country. Some groups set specific joining criteria such as company size or professional background to make sure they host members who can be beneficial to one another.
Some of the UK’s major event organisers include:
If you don’t have the time to attend networking events in person, online networking has become incredibly popular over the last decade. LinkedIn, in particular, offers excellent networking opportunities across a huge range of sectors so you can engage with new and existing contacts.
With all forms of networking, you can only expect to get out what you put in. If you are an active member of the group and participate freely in meetups and events then networking can work wonders for the reputation of you and your business.
Keep your data safe
It’s worth ending this comprehensive guide to starting a business with a note of caution. Most small business owners still haven’t either acknowledged or reacted to the threat of cyber crime. A recent report from the National Cyber Security Centre noted the mounting threats from ransomware, data breaches and supply chain weakness.
Just as any retailer security alarms and insurance for their premises, today’s businesses need to take a considered approach to protecting their activity on the web. Here’s how:
- Discuss the situation with your IT firm, if you employ one
- Be prudent about employee access to vital resources
- Use virus and malware scanning across all devices
- Backup data remotely on a daily basis
- Educate employees and train them to spot attacks
- Update your website and software regularly