esoteriic.com

I think it is wise to do a fair amount of research before starting a business, figure out what is and isn't legal as well as what qualifications / certificates or insurances you will need; however, if you research everything and over-analyse then perhaps you won't ever get started. It is often wise to test the waters of a new idea by trying to start it while working another job (or studying), perhaps you can have sale or two before you officially have everything in place. There is a lot of free information out there, such as from local meet ups / friends and from the internet, but it isn't necessarily a bad idea to pay for advice from someone that has done it all before.

There is a lot of information on the internet so find as much as you can for free. It would also be worth your while trying to find an appropriate book: eg starting a business for dummies or similar. Most of these books will cover the information I provide on this website. I found a 2nd hand book for circa £5 that covered all the necessary points of running a business. I use it as a reference guide and look it up as and when needed, it can't tell me everything but it is a fair place to start.

One of the most under-rated parts of the process. This is the most fun part as it is the most creative. Sit down with a pen and paper and thrash out your ideas, even concepts which are ultimately non-sense or rather ambitious you should write them down. Without having a dream your motivation will drop, without motivation your income will drop. Motivation is a tough one but it is best to start off on a positive note. Mind map: when writing down your ideas it is often best to write them in bubble and connect the bubbles with lines.

Try to find other people that are interested in business start ups locally, there might be groups that already meet and share useful information (say via meetup.com). There is of course a vast wealth of information on the internet, such as sample business plans as well as start up ''gurus'' offering advice over Twitter and trying to sell you their products.

Professional consultancies will charge but it might be worth it, I've never used one but I can see some benefit in using one. I've had meetings with the local government start up agency but they are almost useless. Unfortunately, there lack of service and expertise is making me break the etiquette of professional grace: generally it isn't wise to write a poor review of such places but they are doing a lot of harm (imo). They certainly promote a start up culture but the agents I've met are often severely lacking in knowledge, experience and (most importantly) common courtesies. I won't name them but you can easily add 1 and 1 to find 2. If you scroll to the last section you can read about one of my disastrous meetings. In short: don't waste your time with the free government sponsored agencies.

There are a few websites out there that contain real business plans that you can download for free. Just Google it. Use these as a framework to get going but tailor it as you need to. A business plan has it uses. It can be good to get your idea down on paper in a structured format (but mind map first). A great business plan does not mean that you have a great business idea, nor does it mean that you will run a business successfully. Running a successful business is more important than writing the perfect business plan. A bank will probably want to see a solid business plan but don't get too bogged down in it.

It should really include a SWOT analysis, that is where you identify your Strengths/Weaknesses/Opportunities/ Threats. This is done after conducting some market research. You will need to profile your competitors and figure out what strengths and weaknesses they have and how they may compliment or harm your business. It isn't necessarily the case that two companies in the same area of operation need to negatively affect each other. All business plans should ideally include a financial projection which may be a 12 month cash flow analysis and a break-even analysis. The latter basically looks at how much money you need every month just to break-even, simple stuff, while the latter considers what happens from month to month as the business grows in the first year. Numbers are always wooly but a bank could insist that you include one. Counting beans is not fun or interesting but sometimes you have to do it.

Opening a business bank account isn't actually that hard. Some banks are a bigger pain that others but it isn't really that difficult. If you sound like you don't know what you're talking about then, yes, they might just tell you to get lost. Younger people are more likely to get rejected here as they will possibly seem too inexperienced in the banks' eyes, but don't let that deter you. You can phone them up and arrange a meeting, then you turn up in a suit and give them the best pitch you can. That might not win them over to the idea but they will at least respect you and may consider working with you if you sharpen up the idea.

If you need special facilities such as a stream-line machine or a loan then they may request a lot of information from you. Getting a simple deposit only account should prove to be the easiest. In some cases, a new business may have to go through the owner's personal bank account (not ideal). They may insist on an incorporation certificate, which is fine as that is easy to obtain.

Probably the hardest thing to get, especially in the current climate. To start any business you need some cash to get it started and keep it running. The more you have at the start then the better chance you have of surviving the first year. Starting up a business with no assets, savings, or income is essentially impossible despite how great your idea may sound. There are some people who have started up a million dollar business with nothing but consider what the conditions were like and why the conditions now are completely different. I can guarantee that the conditions when they started were different.

Obtaining a loan is easier if you have a job with a regular income. Obtaining a credit card is also easier if you have a regular income. Using a credit card can be helpful for cash flow management but I'd be cautious about using it for anything other than emergencies. In the current climate banks will only lend up to 50% of the amount you need to set up a business. They expect you to have the other 50% in savings (ie cash). It could be worth checking loan syndicates such as Funding Circle.

Incorporation (as an Ltd)

Registering as an incorporated business is well worth the hassle. The required time and effort is fairly minimal. You will need to find some basic accounts every year but you need to keep accounts anyway so it shouldn't be a problem. Incorporating a business limits your liability to whatever the business owns, hence the named 'Limited Liability Company' (eg MyCompany Ltd). If someone was to sue the company the most they can obtain is the total value of assets held by the company they can't pursue you personally. In the latter case you could be forced to sell your house or car in order to meet the payments. You don't need to legal register as an Ltd to start your own business and get trading but it should be one of the first things you do.

It can be done online at Companies House (for UK businesses) for a small fee, there is a risk that if you fill it in incorrectly then they can give you a penalty charge. If that spooks you then you can ask a lawyer to do it. A lawyer may charge £150 -  200 for this service (is about 20 minutes worth of work) but they should take all responsibility for mistakes plus they will have a good idea of how to fill in the form correctly. Some incorporation lawyers will let you register your business at their address (you need a business address in order to incorporate), and will collect any business mail for you. The service costs but it may be worthwhile.

If you plan on running a bar that sells alcohol then you are going to need a license for it. Same goes for a restaurant planning to sell food, or a car sales company that's planning to sell financial products. These sort of things are regulated and require registration and perhaps doing some basic exams. Google it and then figure out how to complete it. You can try to ignore it and just start anyway but you'll be shut down pretty quickly. The local councils keep close tabs on these sort of things.

Definitely worth getting an account (and a tax adviser if necessary) to audit your accounts. This keeps you right and prevents any future disasters from trying to do things yourself. Find a local accountant and phone / email them.

This can be specific to each industry. You may need to have public liability insurance in case a member of the public injures themselves on your premises.

Fairly self-explanatory and should be in the mind-map and business plan. You don't always have to buy equipment if you can rent it. If the initial amount of money is large then it is probably worthwhile to rent the equipment until you build up money in the business. If it is machinery then the rental company may also offer a servicing agreement (ie they fix / replace it when it breaks).

Again, this should be in the mind map and business plan. As mentioned above a lawyer may be happy to let you use their address as your business address. When you incorporate it isn't possible to use a PO Box address for registration. It is possible to pay for a virtual office to handle all your mail, and phone calls if necessary. The cost per month is quite cheap if they just handle your mail, if you want them to handle phone calls too then you will have to pay circa £50 per month plus the cost of calls. This service can be well worth the money. Secretary's can deflect nuisance calls when you're busy as well providing a professional front for your business. Done correctly they will boost a company's image.

This is one of the most important points and one that I unintentionally left until last. Working solo is not always possible and often not always desirable. However, having the right people to plan with and eventually work with is incredibly important. The working environment/relationship needs to be harmonious, you should share similar values otherwise it probably won't work. If you are keen to brainstorm an idea but your prospective business partner would rather watch football in the pub or play computer games at home then you might want to find someone else. If your business partner is hoping to visit Siberia and set up an organic farm there while you would rather be running your own bean counting company in France then things probably aren't going to work out either. It is best to find this out earlier and then part company if needed an on amicable terms. Communication is absolutely crucial and all problems need to be put out into the open and dealt with.

And my parting gift is the story of my disastrous meeting with a free-advice agency:

Comments

Search

!joomlacomment 4.0 Copyright (C) 2009 Compojoom.com . All rights reserved."