When discussing the prospect of starting a new business, words like ‘daunting’, ‘overwhelming’ and ‘intimidating’ get thrown around often, emphasising the possibility of failure more than the possibility of success. A survey of 1,000 would-be entrepreneurs found that 39 percent of respondents think about starting a business every day, but haven’t done anything to make this dream happen, with 78 percent citing ‘fear of failure’ as one of many factors holding them back.
Rather than letting worries or reservations prevent you from starting your own business, take a pragmatic approach. Here is a brief checklist for you to help organise the prep work – take a deep breath and dive in.
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1) Do your research
No matter what kind of business you want to start, you need to do your research. This doesn’t necessarily mean coming up with a product, service or concept that no one has ever done before; consider how your vision can improve upon what already exists. But this means thoroughly scoping out the competition and your target market so you can find your unique selling proposition (USP).
2) Write a business plan
You already have your vision – now it’s time to put that vision on paper. Writing a business plan helps you define the goals of your company, lay out how you see it running, explain how much funding you need, outline branding and marketing plans and detail what sets you apart from your competitors. Download a free business plan template from the Prince’s Trust to get started.
3) Decide on a legal structure
A legal structure will define your next steps: the necessary paper you have to complete, the taxes you’ll be paying, how you make a profit and your responsibilities if your business experiences a loss. There are three main kinds of businesses – business partnership, limited company and sold trader – but there are many different schemes to consider. For more in-depth information on legal structures, click here.
4) Get the right insurance
It’s important to distinguish between insurance that you must have and insurance you should have. For example, employers’ liability insurance is required by UK law if you have employees and will provide cover against claims made if an employee injures themselves on your premises. For some sectors, professional indemnity insurance, which protects your business against claims made by dissatisfied clients, is an example of a type of insurance that’s not necessarily mandatory, but a wise investment, especially if you handle data or intellectual property for clients. However, for solicitors and accountants for example, professional indemnity insurance is something you must have. For more information about professional indemnity insurance, click here.
5) Figure out funding
It should come as no surprise that starting a business isn’t cheap. You’ll need to figure out infrastructure costs, and decide what kind of funding would suit your business best: crowdfunding, a government-funded start up loan, through an angel investor or any other type of financial support. Read more about your financial options here.
This obviously isn’t a comprehensive checklist – these pieces of advice are meant to help you divide the prep work into more manageable categories. You will need to consider where your office/store front will be located, how many employees you’ll need, what kind of website you want, etc. (if you’re still feeling overwhelmed and in need of advice, read James Caan’s five-point checklist for starting a new business here. Yes, starting a business is daunting, but with proper planning and a limitless amount of determination, you can make your entrepreneurial goals your reality.
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