Posted: Thu 17th Dec 2020
Want to be your own boss? Congratulations! This guide outlines the key steps for starting your own business and the free resources you can access as part of Enterprise Nation's StartUp UK programme.
Come up with an idea
The first thing you need to do to start a new business is to come up with an idea. Will your business be selling a product or are you looking to provide a service?
Not everyone has that ultimate lightbulb moment so think about ways your new business can fulfil people's needs or solve a problem.
Many businesses come about because the founder has spotted a gap in the market. If you're looking for something you just can't find, other people may be looking too and your new business could provide the solution.
Another way to settle on a new business idea is to find a product or service that already exists that you could do better or cheaper.
Finally, you need to love what you do when you're running your own business, so what about turning your passion, hobby or skill into a company?
Research the market
If you don't have a market for your product or service, you don't have a business. It's crucial that you spend time researching whether there's a need or desire for your product or service and who your target customers are.
Interview your target customers and ask them about your new product or service. You could set up a focus group of people with certain demographics such as age, location and education or send potential customers a survey to fill in.
You might think that you need to target a very big customer base but finding a niche can often be more effective.
You also need to research your competitors so you know your place in the market. Look at what they charge, how they market to customers and their levels of customer service.
As Mike Thompson, founder of Boozie Biccies, says:
"Skipping this video will cost you the biggest losses in time and money. Narrowing down your target market might feel like a reduction in your business potential but use the advice to define a target niche to really see your business grow."
Decide on your business structure
There are different legal structures you can use for setting up a business. These are your options:
If you're setting up a business with someone else, a partnership might be a good option. You'll share responsibility for your business including any losses, costs and profits. If the business fails, you're personally responsible for debts.
Limited liability partnership
This is similar to a partnership but it is different in that you're only responsible for the debts up to the amount of your investment in the business.
A limited company is a legal entity in its own right, which means the assets and debts are separate from those of its shareholders. That means if the company experiences financial difficulties, the personal assets of the shareholders are not at risk and each shareholder will only lose the value of their original investment.
The company can pay directors and shareholders a salary or dividend from the profits. Limited companies are more tax-efficient than the sole trader status but you need to submit full accounts to Companies House every year and pay corporation tax.
Create a business plan
A business plan gives you a clear sense of direction and provides a structure to your business's growth.
The plan should include details of the size of your market and demographics about your target customers such as age and location. You should also outline your marketing plan and how you intend to reach your customers.
Use your business plan to set out the competition your business faces and operation costs such as stock, rent, IT equipment and manufacturing capacity.
Include a cash-flow forecast that shows the sales for the time period you're writing the plan and your costs. This will give you your projected profits and help you understand how many sales you expect to generate.
Entrepreneurs need to stay flexible so your business plan should be a moving document. As your business grows or the market changes, you'll need to adapt it but planning from the moment you start a new business will keep you focused and help you predict stumbling blocks you might face.
Think about finances for your start-up
Starting your own business doesn't have to be expensive. However, it's important to keep costs to a minimum and focus on spending money on the things that benefit your business.
Crowdfunding, which allows you to source finance from members of the public in return for a reward or equity in your business, is another option. Or, you might also be able to get backing from angel investors, wealthy private individuals who invest in new businesses.
Build an online presence
To make as many sales as possible, your business needs to be online. Without a presence on the web, you'll miss out on thousands or even millions of customers. There are various ways to get online. Here are some of them:
Your own website
When you're starting your own business and you're on a limited budget, you don't need to invest a large amount of money to build a website.
You first need to decide on the domain name (the web address) for your website, which you can get using a domain registrar such as GoDaddy or 123 Reg. Choose something that's simple, is easy to remember and reflects your brand.
To launch your website, you could invest in the services of a web designer. However, a cheaper option is to use a template version such as WordPress or Squarespace.
It can sometimes be hard and quite time-consuming to manage your own website and deliveries yourself. You can sell products to a wide audience via online stores that welcome third-party sellers, such as Etsy, eBay and Amazon.
They allow you to reach a broader audience, both in the UK and around the world. You can list your products and also use advertising functionality to reach your target customers.
As Sophia Procter from Munchy Play says:
"Being on Amazon has brought huge benefits. Not only the kudos that goes with being able to fulfil orders with Prime delivery, but also the visibility and search that comes with it. It has allowed us to grow and scale our business and reach new audiences."
Social media platforms like Twitter, Facebook, LinkedIn, TikTok and Instagram give you free access to customers. Setting up a profile allows you to post content about your brand and build connections with potential customers. You can also pay for social media advertising to get even more targeted with your messages.
Not all platforms will be right for your business though, and it can be easy to waste time by posting on all of them in the hope that your customers are there. Instead, you should find out the platforms that your target customers use the most and focus on those.
As Gosia Suchojad from Bunch Skincare says:
"Social media platforms are great for building community, showcasing the person behind the brand, conveying the purpose of business and just having some fun. I'm an introvert but being on social media for the purpose of running a business challenges me to come out of my 'shell', get to know my customers and allow them to get to know me."
Search engine optimisation (SEO)
SEO is a process to help your website be found by the customers you're targeting when they search for your products or services on internet search engines such as Google.
You can set up your website with target keyword and phrases so the right people find you. The Google Keyword Planner is a good place to start to find the right keywords and once your website is set up you can use Google Search Console to check how keywords are performing.
Access support to start your business
Visit the StartUp UK hub for resources that give you the education and inspiration to get started on your entrepreneurial journey.