Starting Your Own Business - what you need to consider
Starting a business is exciting and terrifying all at the same time!
Plenty of people will consider it but few will take action and try to make the dream a reality. But what should you consider before you go for it? In this blog post I’ve gone through the main things you should spend time on before you set up your business, whether it’s part time or full time.
The Idea
What business are you starting? Is there a gap in the market for it or can you differentiate yourself from others already doing something similar? Will your business idea lean into the strengths you have built up in your existing employment or is it something completely different that will require you to retrain or learn a new skill set?
What will your business model look like and how will you generate sales? You would be surprised how often people skip this step because they are so excited about their idea and how they can help their potential customers. They overlook the practicalities of how potential clients will find them and how they will generate sales. You need to think about this from the outset because sales in those first few months will allow you to cover the initial set up costs that all businesses have and can be a stumbling block.
The budget
You need to be realistic about the costs of starting a business. Most likely you will have to put some of your own money into it to get going. If your business will be service based you’ll need computer equipment, subscription services etc. If your business is product based, you’ll need materials or stock. These will need to be purchased before you get your first paying customer!
Think about..
How much money you have- what is the starting amount that you are personally willing to invest in the business? What is your personal break even point?
Brainstorm all of the expenses that you might need for the first couple of months and estimate what they are likely to cost
Estimate your beginning losses- no one wants to factor this in, but you should! How long will it take you to make enough sales to start covering your monthly overheads? Including this in your budget means you have sustainability in mind.
Pad your budget- whatever you think you’ll need, add a contingency amount.
The Practicalities
Once you’ve brainstormed your ideas and worked out your budget, it’s time to think of the set up.
You’ll need to think about:
Business name registration, if you are trading as anything other than your own name
Trading as a sole trader or a limited company- the decision most likely to stop you in your tracks! Don’t get bogged down with this though, speak to an accountant about what’s best for you and your business.
Registering for income tax
Setting up your business bank account- sooner rather than later
Setting up your accounting software- I recommend Xero
Email and domain name registration
Operating systems- file management, task management, communication systems, payment platforms etc
A list like this can seem daunting at first, but tackle them one by one and you’ll soon find that you have your foundations in place. Doing this at the start of your journey will be a massive benefit as you grow as you’ll have confidence in the systems you’ll already put in place.
Check out my Start Your Own business guide here, if you want more detailed information on the practicalities of setting up.
The Support
No one can do it alone. At the start of the journey, most business owners will try to do everything themselves. It’s natural, especially when money is tight and you are still learning what you actually need support with. But it’s not sustainable in the long term.
However, at the start up phase, you should be starting to build your network to include people that can support you on your journey. That can be people in similar businesses or industries, networking groups, your local enterprise office, legal support or accounting support.
The point is, you want to identify the people that might be of support to you further along your journey, so that when you do need them you can reach right out.
I hope this blog post helps if you are at the beginning of starting your business. I’ve created a free guide on the 5 Steps to Creating Your Start Up Budget which you can access here.
As always, reach out if you have any questions or concerns!