Start a new small business

Some handy hints and advice

Are you looking at starting your own business? Maybe this is your first business and you haven't been self employed before?

Listed here are some things to think about, some business resources, business ideas, information and help to get you started.

Your business idea
Do you know what you want to do? Are you already doing this type of work and now wish to branch out on your own?
Running your own business can be exhausting and stressful so you need to be doing something that you ENJOY doing. Maybe turn a hobby into a small business.
Alternatively you can buy a business that is already running. Buying a business can be costly but it also alleviates all of the expense and hassle involved in setting up from scratch.
There is also the possibility of a franchise business, which is cheaper than buying an already profitable business but provides back-up support and help when you need it whilst not entailing all of the work of a fresh start.
We will look at all 3 options here starting with buying a business.
Buying a business
Franchise business
Starting a new business
Buying a business
Whichever route you are taking, research is essential before you make a financial commitment. Start by putting the phrase "business for sale" in a search engine like Google and start visiting the websites offering UK businesses for sale.
You can also look at your local newspaper for businesses for sale, plus specialist magazines like Daltons Weekly. Even Ebay lists businesses for sale.
From here you can see the types of business available and how much they cost. You might be surprised at how little (or how much!) it costs to buy a business.
As well as looking at the cost price you will need to look at ongoing expenses such as rent and rates to determine whether you can make enough profit to support the lifesyle you want (or even make a profit at all).
If there are any businesses that interest you sufficiently at this stage you can make a general enquiry to find out a few things - eg. why is the current owner selling? What are the gross and nett profit figures for the last few years?
It is wise to get specialist advice at this stage, particularly if you need to analyze the profit figures - do you know an accountant who could look at them for you?
Assuming you are buying a small business, there is no need for a team of solicitors or business analysts - negotiations can be done directly between yourself and the current owner.
Remember the advertised price is always subject to negotiation - the cheaper you can buy the business the quicker you will get into "real" profit.
Franchise business
Buying a franchise can save you a lot of time in setting up a business from scratch. You can often trade under a name that is already known by the general public and you have the support and back-up of the franchisor.
You will usually have to sign up to an agreement which lasts several years and cancelling this contract can have penalties for the franchisee.
It can be expensive too, although you can usually find a franchise business to suit your budget.
Again you should start by doing your research - the internet is an obvious place to start. Look at the types of business available - is it what you want to do? Does it suit your skillset?
Remember if you are going to be tied into a lengthy agreement with financial penalties you have to be doubly sure you can make a go of it.
Negotiations are less likely to take place - franchises are normally at a set fee and can include stock, advertising, marketing and branding.
Starting a new business
As discussed before, you need a good business idea or to be particularly skilled in an area in order to make a go of things.
Just because someone else may have had the same idea before should not preclude you from giving it a go - maybe there is room for another company in the business, maybe you have spotted where your competitors are going wrong, maybe you have a slightly different business model or way of doing things.
Once you are happy that the work is going to be OK and the business is going to generate sufficient income to pay the bills you can set about starting up.
Business Grants
Can you get a grant to help you start your own business? There are a variety of organisations who can help with business start-up costs. A good starting point is the Government's own website - Businesslink.
Business Finance
Even with a small contribution to your start-up costs from a grant there is still likely to be a fair bit of extra money that is needed to get your business going and to keep it running in the early months when your incomings might not exceed your outgoings!
The first obvious port of call is your bank.
Business Bank Account
If you already have a good relationship with your bank on a personal level it makes sense to ask them to open your business bank account where possible. They may be more flexible and more helpful if they already know you and you have a good track record with them.
If you need finance they are going to want to see a business plan and projections for turnover and profit before they consider lending you any money.
Business Plan
As has been stated on this page many times already, planning is key. Do your research and get everything written down into a coherent business plan. You can download a template from the internet and fill in the blanks if you are a small business. If things are more complicated you may need to get a professional business plan drawn up.
Business Premises
Does your business need premises? It may be that in the early days you can run it from home and think about premises if/when things take off.
If you are going to need premises straight away are you familiar with the health and safety regulations and local authority regulations? This may be particularly complicated if you are in a business such as catering.
Business Insurance
You will need insurance for your premises (or to notify your existing insurers if you intend to work from home). You will also likely need public liability insurance if you are coming into contact with the general public.
If you have employees then employers liability insurance is mandatory, professional indemnity insurance is recommended for office professions where advice is given, and then there is vehicle insurance if you are driving on business.
Advertising/Marketing
In order to get business you are going to need to advertise when you first start up. If you are a retail business you could organise a gala opening and spend the month before launch date getting in touch with local newspapers, websites and friends/family to get the word out about your new venture.
Other business types can employ the same ideas. Get on the internet and get your business listed for free with as many different sites a possible. Get yourself a website too!
Think about where you would look if you wanted a service/product like yours and advertise in these places. List on Ebay if appropriate.
Try to get in touch with other businesses who may be able to sell your product to their customers in return for a small commission or for you helping to sell their product.
Communications
You will need a way to contact your customers and for them to contact you. A business mobile phone is ideal to keep you in touch no matter where you are. You never have to miss a business call.
Mobile phone handsets are usually free with a business mobile tariff.
It is also possible to have mobile internet to keep you in touch with emails and browse the web whilst out and about. A laptop with mobile broadband may also be a handy tool to show prospective clients your work and to search for suppliers etc. whilst on site.
Starting trading
Once you start trading you will likely be focusing on the work that you do. But you also have to keep an eye on your books and how much profit you are making. It is very likely once you start trading that some expenses will crop up that you didn't anticipate. As you go along you may need to adjust your business plan and your pricings to make the business viable. Being a small business owner will involve a lot of work in the first few months/years and you need to be prepared to put the hours in.

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