Britain’s small businesses are booming. In fact, FSB figures suggest that, at the start of 2018, there were 5.6 million small businesses in the UK. And according to a report in CityAM, the number of new companies registered in 2018 rose by 5.7 percent to over 660,000
At Ryan’s we work to support businesses – both existing and freshly formed – to help them to grow and flourish. And what if you have an idea for your own business, but you are not sure how to put it into action? We have brought together some of the things you need to consider and action, and some ideas to get you started.
Building out your business idea
Some people know exactly what business they want to startup, while others know they would like to start a business, but they don’t know what that business will be. That great idea will be there if you know how to look for it, though.
To work out what that idea is, why not ask others what you might be good at. Think, too, about what will work for your own personal preferences – both in terms of what you like doing and what you need to get from your business. You will need to ask yourself a number of questions, including financials.
· How much turnover/profit do you need to generateto make ends meet/live comfortably
· How much time are you willing to commit to your business?
· Where will it be best to locate your business?
· What/who is the competition?
· Is there space in the marketplace for you to operate successfully too?
These questions will help you to work out whether your business will work for you and whether it will be viable. Remember, just because the competition is tough, it doesn’t mean you shouldn’t enter the marketplace, especially if you have a unique selling point (USP)
Upskilling to startup
Investopedia suggests that the four most common reasons for small businesses failing are:
· lack of sufficient capital
· poor management
· inadequate business planning
· overspending on marketing
This suggests that upskilling – especially if you are addressing these four points, can be lucrative
Starting up a business is very different to managing aspects of someone else’s operations and requires skills you may not already have.There are various ways to address this and you will need to decide whether you need to upskill yourself, or whether you can get others to help you to run your business effectively, productively and, hopefully, profitably.
Here are some of the key skills you will need, especially if you address the reasons why small businesses fail:
· Creative thinking – to ensure you have a US
· Leadership – even if you are working on your own
· Organisation – to help structure and run yourbusiness
· Communication – to ensure you buildrelationships with your clients
· Finance – to help you build a successful andfruitful business
· IT basics – to give you the tools you need forday to day operations
Your business structure
Most businesses in the UK fall into three categories. The structure you choose for your business will depend on how big you would like your business to grow, how many people you need to run your business effectively and, of course, your own personal preferences.
Self employed/sole traders – Being self employed doesn’t necessarily mean that you have to work alone. As a sole trader you can take on staff, but you will have sole responsibility for your business, and you can keep all of your profits aftertax
Limited companies – Limited companies are registered with Companies House. They are more structured and, rather than your profits belonging to you, they belong to the company, to be shared as dividends. Starting up a limited company is relatively easy and can be done directly through Companies House (probably with the support of your accountant) or via a specific formations company
Business partnerships – You may wish to set up your business with a partner, meaning that you will each share responsibility for the business. Profits are also shared between thepartners. Your nominated partner must be registered for the partnership, andfor self assessment tax, with HMRC
Your business name
You may already know your business name. You may have known the name before you even knew what you would be doing. If you don’t, though, now is the time to get creative!
Remember, the business name you register, and the ways in which you choose to convey it – your brand – can help your business to succeed.
When naming your company, remember to:
· Carry out research to ensure you are appealing to your target audience, as well as to yourself.
· Create a connection. Think about how your clients will feel when they think of your business.
· Reflect your offering. Choose a name that defines what your business does and what it stands for.
· Think about future growth. Choose a name thatfits all eventualities and doesn’t restrict you at all.
· Remember your URL. Make sure the one you wantis available and then get it publicised.
Your business plan
Your business plan will help you to ensure you have everything set to go and it will also help you to gain the backing of your bank and any other investors or stakeholders needed.
Your business plan will be at the heart of your operations and it is one of the most important documents needed for your business success. It should include:
· About your business
· Market analysis
· Competitor analysis
· Client analysis
· Product/service development
· Organisational structure
· Financial requirements
· Financial statements
Other things you need to remember
If you are starting a limited company, you will need to register with Companies House.
Business bank account
There are various banks and building societies offering business bank accounts. A quick search on Google should help you to find the one most suited to your business needs.
You will need to do self assessment tax returns, plus, if you are running a limited company, you will need to do PAYE returns each month and a year end return to HMRC as well. These can be time consuming and it is agood idea to get the advice of your accountant before you start and during thefirst year, at least.
The business insurance you need will very much depend on the sector you are working in, what your operations include and how many people work for you. Your business insurance might include:
· Employers’ liability
· Products liability
· Public liability
· Professional indemnity
· Frozen food
· Business interruption
· Commercial motor
Your insurance broker will be able to work with you to ensure the best covers are selected for your business. Then, with a network of insurers, they can select the policies that are most appropriate for your business and for you.
To find out more about business insurance for start ups from Ryan’s, call our Enterprise Division on 01473 343491.