The New Year is here and with it comes resolutions, goals and plans for the year ahead. It’s a common time of year for people to start thinking about setting up a business and finally going at it on their own.
But if you’re thinking about setting up a business, you first need a realistic idea that you can turn into a service or product then you need to work hard to turn it into a business idea. We’ve covered some top tips on getting started with setting up a business in the UK in our handy infographic, so we though we’d take a look at some further tips for ensuring that your start-up is a success.
With the number of start-ups failing within the first few years hovering around 50%, it’s important to set up a strong foundation to build on in order to ensure your new business succeeds.
Plan, Plan & Plan Some More
Planning is key when it comes to success. There’s always going to be a level of unpredictability with a business, but understanding how your business works as a whole and any potential hiccups that occur along the way will help you to make more sound decisions and prepare more effectively.
That’s why your business plan is key. It helps to sum up the customer need you’re aiming to meet, and also how your business plans to meet that need while making a profit.
Establishing your budget and understanding how much money you have to work with can help you determine how much it’s going to to take to develop your product or service, market it, and turn it into a successful business. Everything from where you plan to run your business from to your business insurance needs to be considered. Try doing some additional research to find out the standard costs factors within the industry you’re aiming to compete it and use that to plan where your money is going to need to go.
Cushion the Blow
In an article over on The Times, Dennis Hall, managing director of Yellowtail Financial planning shares: “You are going to need twice as much money as you think. Things take twice as long and cost twice as much as you think they will. There are all sorts of unexpected costs and expenses — and people who won’t pay on time. When I started out I thought we would have no income from the business for the first two years, it was four.”
It’s important to ensure you’ve got a significant amount of savings or money from redundancy in order to see you through the early years. You may want or need to look at alternative funding for your business, such as government funding and incentives, angel investors or bank loans, but either way you’ll need to make sure you’ve got the money there to make sure you can continue operating through both the ups and the downs of becoming established.
Startup funding has grown in the last year, with many sources of money coming from unexpected places as illustrated with by Entrepreneur in a recently published article including the below infographic from Fundable:
Flexibility is important when it comes to new business as chances are that things will have to be modified; being able to adapt quickly will help to determine if your business succeeds. If things change from your original business plan, you need to track what’s happening closely in order to update your plan to match the new course of action, ensuring that budgets, timescales and assignments are adjusted accordingly.
Keep a Record of Everything
Contacts, invoices, receipts, agreements – make sure you keep a record of everything for auditing purposes. Everything from making sure clients pay their bills, knowing where your money is coming and going, and ensuring agreements are in place will help to ensure your business stays on top of things. An accountant or book-keeper can be extremely handy at helping to maintain your records.
Have you set up a business in the UK? Do you have any additional tips for success? Let us know in the comments below or over on Twitter @theinsuranceoct!