Starting up a business on your own must be one of life’s steepest learning curves – and certainly one of the most challenging.
The start-up process will not only test your knowledge of your industry or key skill areas, but it will also teach you about yourself. By the end of year one, you will be considerably more self-aware.
In order to survive in the commercial world, you’ll need to get to know your competitors as well as you you know your own business. Do you know who your competitors are, the pricing plans, the size and strength of their market, any weaknesses they may have?
Is there a real demand for your products and services? Many a business has failed because they have not researched their competitors or marketplace thoroughly enough.
You’ll also need to be able to manage your time effectively. The 9 to 5 existence you have become used to in your ‘normal’ working life will be a thing of the past. You should be prepared to work all hours of the day to get your new venture off the ground. You will need to prioritise your time, and put your business first – especially during the first year.
Maintaining a healthy cash flow is also vital. You may have the best business idea in the world, but without solid financial backing, it will never get off the ground.
Most start-ups get going with personal funding, money from family and friends, and even credit card borrowing. This has been even more the case following the credit crunch and poor availability of bank lending.
Try to create a realistic business plan, factoring in the worst case scenarios – cash and customer wise. If the plan works on that basis, you could well have a success on your hands.
Successful entrepreneurs know their own weaknesses. No-one is good at everything. If marketing isn’t your thing, call in someone to help. Don’t be afraid to ask for favours from friends and old colleagues.
Make an appointment with a local accountant before you start up. They can advise you on the best business structure to use, and provide ongoing financial advice. Most small business owners cite their accountant as the most important advisor they have.
You’ll also need to set up a business bank account which is fee-free, at least for the first year or so.
If, after reading this short article, starting a business still seems like the right thing for you, you’ll need to think about the business structure you will be operating under. Are you going to set up as a sole trader, trade via a limited company, or form a partnership?
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