According to the ICAEW, the start of a new year is a good time to think about starting up on your own, and given the importance of SMEs to the community, the Government is currently conducting an enquiry into entrepreneurship.
The current economic climate is also driving thousands of employed people to consider making the leap into self employment.
With this in mind, the accountancy body has provided some tips for would-be entrepreneurs.
Business start-up tips
Here are some key things to consider before starting up, based on original tips penned by Clive Lewis, its Head of Enterprise:
1. Research the Market – make sure you find out if there is a market for your products of services.
2. Business Planning – this sets out how your business will operate, and become profitable. Find out more in our business plan section.
3. Business Funding – how are you going to finance your new enterprise. Being under-finances will put you at a disadvantage from the start.
4. Contingency Planning – what if your business does not have the flying start you hope it will? Factor in the need to comply with regulations and other potential pitfalls.
5. The Right Employees – If you are not planning on working on your own, pick the best people your budget can afford. Perhaps incentivise staff with future rewards if they work for less at the start.
6. Mentoring – It is always helpful to have someone to bounce ideas off. Learn from customers and suppliers and ask the views of your chartered accountant and other advisers.
7. Monitor KPIs – Key performance indicators that is. Keep an eye on all your finances, margins, profits, working capital, and turnover on a weekly/monthly basis. Most firms fail due to poor cashflow management.
8. Be Aware – Things change in business, competitors come and go, and you make have difficulties with suppliers, staff, and customers. Be realistic that your business may need to change course at some stage.
9. Learn – Absorb all that you can from the experience of being an entrepreneur and from those around you, and also learn from your mistakes.
10. Minimise the Chance of Failure – Concentrate on a business you already know about, and employ people with experience of your sector. Employ a qualified accountant before you launch your enterprise.