The Ultimate Guide to Starting Your Own Business
Do you dream about starting and running your own company? In this post I dive deep to bring you the Ultimate Guide to Starting Your Own Business; from the idea, how to set up, run and operate your business, to key tips on planning and marketing.
Here at bizee.co it is our job to help small businesses succeed. We enable small business to grow by offering affordable and skilled virtual assistants in marketing, social media, e-commerce and serviced accommodation support. In the following article you will find:
1. How to get started.
How do I come up with a business idea?
There a number of ways to start this process off. Brainstorming what is going to be the next big thing is one way, but it is also not that easy.
You could think about how our lives are evolving and think about what complimentary services would fit well with the changing human habits and needs. In a similar vein you might also look at what industry giants are doing and spot where the gaps are, for example what are they not doing?
It could be that you are particularly good at something and feel you should bring it to the world in your own way. I happen to like this last option so here is a little more detail on how to go about it. Sit down and think to yourself what you’re good at and enjoy. Then think about how these skills can be implemented in different fields – really think laterally here. For example how could you apply your IT experience to the property sector.
How do I do market research and why?
Once you have come up with your business idea it is important to research it thoroughly. This is simply the process of ascertaining whether your business idea is actually feasible, whether there is an appetite for it and consequently how viable it is.
It may seem to you that you have come up with the greatest thing since sliced bread but it is always worth checking out who else has come up with the idea and indeed if it is possible.
Can it be done?
A few years ago, together with a friend, I decided to embark on the development of a mobile app to enable people to buy jewellery by trying it on virtually. The virtual reality aspect of it would enable people to “try on” rings by scanning their hand through the phone camera and virtual reality to allow them to “see” what the item look like on their finger.
Having got most of the way to developing the app we realised the technology, which we thought was viable, was in fact not available. A lesson learned!
We shelved the idea after a few months of work and moved onto other things. As much as I look back now with some regret because we missed the boat on this one, we were also a little too early and more thorough research could have told us this – we were swept up in the excitement of doing something new and neglected to properly investigate what could or could not be done.
Do people want it?
It is important to ask whether people actually want what you are planning to sell, whether it is a product or a service. This can be done even by simply running it by those you trust to get a second and third opinion.
What is your pricing?
If you are happy there will be a demand, then you need to also work out your pricing. Going back to the example from above, we neglected to properly investigate the jewellery sector and so we did not understand until it was too late, that we required 3D designs for every ring, but these are not always produced by jewellery manufacturers and the cost of us doing so for every item meant that it would not be commercially viable to make money, especially given the fact product lines do not have an infinite lifespan.
Where to set up a business?
Location is important in business. If you are to have a physical location it is crucial that you are in the right place, where customers can find you and where there is a demand for your product or service. This could be as straightforward as looking into demographics and disposable income where you wish to operate your business.
How to promote your business.
Working out who your customers are and the best way to reach them is a very important aspect of your research. How to publicise your brand and how you can access your target audience could be the difference between success and failure. By researching this you will also learn a lot about their needs.
If you are advertising online, this would include what interests they have, where they “meet up” and what social networks they use.
Surveys are a great way to gather information and they can be relatively cheap.
You should absolutely look at your competitors, how they target their audience and where they market their product or service. You can also find a whole load of statistics on the industry or sector to support your business idea and feed into your… business plan.
Do I need a business plan?
Yes. That is the short answer. A business plan will allow you to put everything you have learned into a document which is not just for your benefit.
A business plan will clearly and concisely outline what it is you want to do – something which is valuable not just for your own understanding and those involved in the business with you but also crucial if you are to approach any institution for a loan or think about funding your business through individuals. There are more details on writing the business coming up a little later.
2. I have an idea - what next?
Forming a company
Although the idea of founding your own company may seem daunting the process is anything but that. In the UK Companies House is the only body able to register a company and the process takes very little time – usually once you have filled out the relevant information you can be up and running in 24 hours.
Incidentally I am only addressing the founding of a company here because a company is legally separate from the owner, so it means you will be less exposed to legal or financial issues. You will need:
A company name (more on this in a minute)
A registered address (this must be a real address, not a PO Box)
A company director (you can have more than one)
A shareholder or guarantor (the owner(s) – it can be the same as the director)
A memorandum and articles of association (generated automatically when registering online)
Share capital of at least one share (for limited companies)
A SIC code (Standard Industrial Classification which classifies your company and the sector)
Naming your baby
This is the fun part in a sense. Think about what you do, who you are going to target and also what means something to you. Why not get your family and friends involved but just remember a couple of things…
…naturally your company name must be unique to avoid your application being rejected. Coupled with this you cannot use offensive names, sensitive terms, suggest a link to Government or any public authority and you will be limited to 60 characters.
Company reporting
Now the boring bit. Owning your shiny new start-up is the beginning of an amazing journey but it is a journey which involves financial reporting.
A limited company has to report all its income, expenditures, liabilities and assets. Furthermore these records must be kept at a physical address where they can be accessed by government officials if needed and you must retain for a minimum of six years after the relevant accounting period.
Every year, whether you have traded or not, you will be expected to file your statutory accounts. All the above records will be required to file your annual returns, pay corporate tax and VAT. You will most likely set yourself up with an accountant and here is a good guide to finding the right one.
3. Writing a business plan
Why is it important?
I touched earlier on the need to prepare a business plan and here is why, in a little more depth. A business plan is the blueprint for your company. You wouldn’t climb Mount Everest without planning your route to the top and, whilst it is probably less dangerous, starting your own company is not without risks.
Your business plan can outline your strategy as a start-up and guide you through the early stages. It provides a reference and key performance indicators to see how you are progressing. It enables you to approach investors and demonstrate how you have thought everything through to build trust with any individual or institution that may lend you money.
It is also fair to say it may change with time. Running your own business is a journey and things do change.
What should I include?
In terms of what you include I think a business plan should be pretty comprehensive but this does not mean it needs to be very wordy. Here is a short overview of what I would recommend including, but remember it is an individual thing and your industry or business sector may require different or additional elements.
Executive Summary
Outline what one can expect to read in the business plan, a kind of glorified introduction. I think it makes a great deal of sense to include an “elevator pitch” or a well thought out and concise sentence which perfectly says what your business will do and why. If you are unable to write the latter, then you need to think long and hard about whether you should be starting this business.
Throw in a little ”about me” section in the executive summary too; something like a short bio which shows how qualified you are to do what you are doing.
Business Description
Product or Service (give a detailed description of your product or service)
Benefits (what are the benefits of using your product or service, what problems are you solving?)
Key to Success (what is the key to your success going to be)
USP (what are your Unique Selling Point[s])
Market Strategies
Customer Acquisition or Marketing Strategy (how will you acquire customers, how will you market your business?)
Marketplace (where is your market; UK, worldwide?)
Revenue (explain how you will make money)
Competitive Analysis
Competitors (who are your competitors?)
Market Research
SWOT analysis (what are your strengths, weaknesses, opportunities and threats)
Future Development (how do you see your business developing?)
Operations and Management Plan
What will you do in the business
How will you run operations (manufacture, logistics, service delivery)
Who will you employ and what will you outsource?
Financial Plan
Assumptions
Profit & Loss Forecast
Balance Sheet forecast
Cash-Flow forecast
4. Financing your business
Small business loans
Typically many start-ups will apply for a small business loan which is repayable over a fixed period of time, anything up to 15 years.
There are two distinct types:
Unsecured Loans allow your business to borrow money without using assets as a security.
Secured Loans mean you can use an asset that belongs to you as a security. The lender can then sell this asset to recoup the loan if you fail to pay it back.
There are a large number of lenders, from high-street banks to digital institutions offering loans for business but it is really important to shop around and fully understand what kind of interest you will need to pay on the loan – like a mortgage these are likely be fixed or variable. Whilst variable may appear enticing when rates are low, keep in mind that the longer your repayment term the more chance there is that variable loan can, well, vary.
Most major banks offer incentivised business loans so it is worth doing the rounds for a chat and to understand what you could get. Depending on the amount many will also allow an online application.
The government also offers business loans. Its Start Up Loans Company offers loans to businesses that are under 24 months old. In their own words their loans “ are designed to finance the initial costs of starting and developing a business” consequently they come with restriction son sector and also on use, for example they cannot be used for;
Debt repayment
Training, qualifications or education programmes
Investment opportunities that do not form part of an on-going sustainable business
The UK government also provides a great resource for industry and region-specific loans which you can find here.
Peer to Peer Lending
Recent times have seen the rise of P2P lenders, amongst those with a business focus in Finding Circle. As with any form of borrowing do your research. One advantage is the cutting out of the middlemen and access directly to lenders who may have an affinity to your business, industry or idea.
Are Family and Friends an option?
They are. I mean, I don’t know your family and friends but it is fair to say that many businesses start with loans from those closest to the founders. If you go down this road it is stills sensible to document the details and make sure everyone involved signs it just to avoid misunderstandings.
Is crowdfunding an option?
Crowdfunding allows you to raise money from many different people, without needing to find one person or institution to lend you everything you need. This has an obvious advantage in as far as many people might risk a little, whereas few would risk a lot.
Whatismore crowdfunding is so ensconced in modern society that it has gone beyond the funding of businesses to a vehicle to raising money for charity or simply to get stuff done.
If you have a well thought out idea for a business it can be worth doing. Presentation is very important when it comes to crowdfunding, so apart from having a good business plan it makes sense to also produce a nice video showcasing your business idea.
The other big plus is that you most likely won’t have to pay any money back, unlike a loan. Some sites are solely for offering of freebies, others a little more business-like and you can offer equity in exchange for funding. Examples include; Kickstarter, Crowdcube, GoFundMe and Indiegogo.
5. Should I hire staff to run my business?
Hiring versus outsourcing
Starting off is dead easy. Your business probably needs you doing a whole load of boot-strapping to get things off the ground but as things evolve and your vision grows you will realise the need to delegate tasks so that your business can grow.
Unfortunately doing everything is not possible if you are intent on kickstarting and sustaining growth.
As to whether you should hire or outsource there are many factors. If you need someone physically present or full-time to do one job it can make sense to hire directly. If on the other hand you think you don’t need a full-timer or your needs may change, outsourcing offers the most flexible solution.
For example, you can hire someone to manage your social media accounts, answer your customer queries for 1 hour per day or research new leads for you. You could hire three skilled virtual assistants to do just to what you need, for just as long as it takes, rather than compromising and employing a full-time jack-of-all-trades and then finding ways to fill their time.
At bizee.co we offer packages of concrete deliverables so you know just what you are going to get. Our skilled virtual assistants are led by strong team leaders with 5+ years of expertise in digital marketing and business growth.
Hiring is a truly exciting time in any small business’ life but it comes with certain headaches too.
Regulatory requirements
If you choose to employ, rather than hiring external, outsourced help then keep in mind the following:
You must pay your employee National Minimum Wage (at least).
You must check your employees are legally permitted to work in the UK.
You must apply for a DBS check if your company works in a field that requires it (e.g. working with vulnerable people).
You must have employers’ liability insurance.
You must provide your employee with a contract.
You must also register as an employer with HMRC.
You must also check whether you’re required to enrol your staff into a workplace pension scheme.
What to put in place (employee handbook)
Putting in place processes, and documenting them, is an important part of any new business as it means you can more easily delegate work, explain how things are done and refer to things when there is any form of disagreement.
If you are employing someone it is also important to let them know where they stand and so a job descriptions and some kind of employee handbook is a good way to start. As a bare minimum the former should outline their duties, responsibilities and hours. The latter should include things that apply to the whole workforce (maybe you included), so a code of conduct, vacation / leave policy, any benefits you may offer, health and safety obligations, IT policy and confidentiality.
6. The importance of your company premises
Why you need a premises?
Your business certainly requires a premises but what do you actually “NEED”? The obvious reasons are for correspondence, work itself and somewhere customers can visit.
From the point of view of trust - a huge and important aspect that often gets overlooked (including in terms of search engine visibility) – a business address is important, even if you limit visits by appointment if needed.
You may simply not want to mix your work with your home life or you may genuinely require a premises for workspace or storage. In all these cases taking on your work premises is again a step that suddenly makes your entrepreneurial journey feel all the more real.
Researching the right premises
Brainstorm your requirements. What space do you need? How many people will use it? Will customers be visiting? Does it need to be in any particular area? What does your business plan allow you to spend? How will my expected growth affect my needs?
Property overheads tend to be one of the biggest expenditures in business and the Coronavirus pandemic of 2020 has showed that many companies can function perfectly from home, but if you do require space for work then consider the above points carefully. You will also need insurance on top of the rental cost.
When you start looking at potential premises for your new business consider what you will be doing; storing, manufacturing etc? How much power will you need? Is the premises conducive to a happy working environment and who will need access to it? Don’t star selling wheelchairs from the 14th floor!
Now you can go out and look, but always make considered decisions, referring to your requirements list and not jumping at the first location just because you are desperate to start. Remember, you are in this for the long term.
Is a co-working space right for me?
Many of our customers work from co-working spaces. They allow you to rent workspace on short or long-term basis and these kind of spaces have become hubs for start-ups as well as freelance workers.
One of the advantages, apart from having a dedicated workplace and lower costs than your own office is the opportunity to mingle with other like-minded individuals which can lead to interesting partnerships, opportunities for collaboration and referred business.
If you want to enjoy the buzz of an office but you do not expect to have a whole team of your own then a co-working space provides an excellent environment. Quite a few of our clients run businesses from co-working spaces, sometimes with a remote team of virtual assistants working on different aspects of their business providing a physical and a virtual office.
Co-working spaces do give you the option for growth too, you can always bring a colleague in.
Can I run a virtual office?
Working remotely, from home, in a co-working space or roving the globe as a digital nomad is perfectly possible in this day and age. Even big business is increasingly realising (albeit rather late) that people who work from home can actually be more productive… and their overheads can be reduced.
All our skilled virtual assistants work remotely to our clients. The challenges posed are no greater than working in the same office; in fact it often leads to much better working practices such as putting in place clear processes, regular organised communication and the ability to work undisturbed which is a key factor in increasing productivity.
All the tools are there to work perfectly even if you are never in the same room as your colleagues.
Video conferencing enables you to have online face-to-face meetings.
Online documents can be edited by multiple people and from anywhere.
Messaging services mean it is simple to send short messages back and forth to individuals or teams.
Project and task management software enable assignment of work, shows who is responsible for each step and track productivity.
Working from home can be very beneficial, from a financial perspective and in terms of efficiency of time. But it is not for everyone and keeping your work life and home life separate are crucial to making it a success.
You may be able to deduct a portion of your mortgage payments or rent if you do use space at home, as well as allow your business to contribute to some other costs. Here’s what the UK government has to say.
7. The importance of branding for your business
“Branding is the process of giving a meaning to specific organization, company, products or services by creating and shaping a brand in consumers’ minds.”
How to position your brand?
Your business has competition so how you position yourself will go someway to dictating how customers see you and how you resonate with their pain points and their needs. It is worth looking back at your business plan at this point which will have more information on your ideal clients and this can inform your brand strategy.
If this sounds all rather daunting it may be worth looking at some outsourced help to design your brand and its identity. For example a logo design and brand kit (colours and forms associated with your brand).
You should be looking to create a positive impression naturally, but one that also creates some emotional response in your audience. Your brand can stand out from competitors, connect and be more recognizable than them. All this can lend you an advantage in taking a slice of the market.
Here is a useful article on the best colours to use for your brand.
What is your message?
What do you do and what is your mission statement? These are important areas to define for your branding. You should be able to define what you do in one easily-understood sentence. My advice is that it should say what you do and how you do it – effectively telling your customers how you solve their problems.
You can distil this into a short motto or tagline, but remember your message must ALWAYS be effective, not just sound good. So step back, put yourself in the shoes of one of your target customers and ask yourself whether your message is clear.
How to protect my brand
Brand guidelines should define how your brand is used, both internally and by third parties. They should also define your colours and have the different forms of your logo which can be used.
When it comes to illicit use of your brand or outright copyright infringement you are afforded protection. It can be a worry that, having invested time and money in defining your brand and brand strategy, someone comes along and copies you.
Provided you can prove you hold the intellectual property of something you are its legal owner. You may wish to trademark your names and logos as well as registering designs or indeed patenting anything that is new and ground-breaking.
I have trademarked a brand before – there was little work involved and it gave a degree of comfort to know I was protected. Whether you do this or not depends on whether you think it is worth it for you – there is a cost associated and there are many legal service providers who can help you do this.
8. Creating your website and online presence.
How to create your website?
The Coronavirus pandemic of 2020 has demonstrated the importance of online business, albeit in extreme circumstances. It is no longer something that is optional – your business must be online.
Fortunately what may be have sent a shiver down the spine of any non-tech people a few years ago is now a very straightforward thing.
Firstly I warn against any new business going spending much money on designing and building website unless you require some specific functionality or a complex store. There are so many off the shelf options these days that with a few hours of help you can have a really great looking site.
We have built many sites for clients in Squarespace, Wordpress or Wix and the client is always left with a great looking site, at minimal cost and most importantly - thanks to these amazing platforms - independent to manage it themselves in a user-friendly content management system (CMS). This is not an expensive thing to do, so look for freelancers or skilled virtual assistants who can help you get up and running in a short and cost-efficient way.
The first step is to brainstorm what you want your site to do? Is it simply information or do you require some function, such as client area they would need to log into?
The next step is to make a list of the pages you would like on the site, essentially write the site menu and any internal pages; home | services | product | about us | contact us
Then you can shop around for a theme or look of the site. Keep in mind your brand identity and see what you like or dislike about the competition. Once you have this you can either choose your platform (see above) or speak to someone who can help you do this. I repeat, in most cases a site which offers information about your site and services should not be expensive or time-consuming thing to do, no matter what anybody tells you.
Even when it comes to starting your online e-commerce business the likes of Shopify offer amazing straightforward solutions that enable you to run your own site and store without being tied to some expensive web developers / designers.
Setting up your social media channels - how and why?
Social media is something the generates a huge amount of anxiety amongst small business owners. You feel you should be there, but do you really have the time to dedicate to making sure you have good, fresh content posted regularly that engages with your target audience? The answer is often a resounding no.
They key therefore is to do your research beforehand, and this goes back to what we have said before about your ideal clients; what social channels do they use? It maybe that you only need to be on Facebook and Instagram, and Twitter, YouTube and others are not so relevant for you. It is better to do a little very well, than spread yourself too thinly and not engage with people on socials. Here are a few tips:
Choose the channels most suited to your business / audience.
Stick to your brand identity with your images, headers and logos.
Have a posting schedule so your audience know when they will see you.
Be honest and try to reflect your voice.
Listing your products online
Selling your product or service online is easy through existing marketplaces such as Amazon, but also you can integrate shops into your website – for example Squarespace allows Shopify integration so you can list your products for sale and have customers browse, add to cart and order on your site without any development work on your side.
WordPress is perhaps the most advanced platform for your website, it can require a little more IT experience than the likes of Squarespace but will probably give you a little more independence in the look, feel and mostly functionality of the site. WooCommerce enables you to sell both physical and digital products through your WordPress site.
Registering as a seller on the likes of Amazon or eBay is relatively straightforward but it is worth perhaps doing one at a time and exploring what brings you the most business.
Do your homework as with Amazon there multiple options, such as Fullfilment by Amazon.
If you are looking to set up a drop-shipping business, here are some of the principal drop-shipping companies in the UK.
9. How to market your business.
How to create a marketing plan
Now it is time to go back to your business plan and check out your SWOT analysis. You can also refer to your mission statement here because what you want to understand is:
Who you are targeting, how you will reach them and why you are the right solution for them?
Based on this knowledge you can choose how to target them, which advertising channels to use. Try also to have some measurable goals to understand what is working and what is not. Remember this is a changeable strategy as well as you must learn along the way the best way to acquire leads and the best way to convert leads to paying customers.
Below are a few ideas but remember each industry or service is different so research what is best for your target audience. Read our guide on How to Outsource to Market Your Brand Better.
What kind of advertising should I use?
Use Search Engine Optimisation (SEO) to bring traffic to your site.
This is a slow burner but a super-important one. When you build your website have in mind the basic principles. You should use the right keywords throughout, relevant to your business as well as get other websites to link back to yours. If you get it right and Google starts ranking your site highly, you will appear high up in search engine results and the rewards can be huge.
List your business on Google.
You can set yourself up on Google My Business to improve results when people search for businesses like yours.
Get networking.
Interact with potential leads online and offline. There may be many people out there who can help to get you new business. We offer LinkedIn lead generation campaigns to kick start this process which generate leads but also work to greatly expand your network.
Share your knowledge.
Social media is a great way to drum up business but it needs to be done subtly, without shouting about yourself so work on certain quality content; articles, videos or even podcasts with useful and engaging information which will resonate with your target audience, bringing people to your channels and your site.
You could also offer free resources like e-books or webinars in your specialist field. Getting people to sign up to these means you are engaging directly with potential customers. Read our guide on How to Promote your business on Social Media.
Send regular emails.
Gathering email addresses of potential customers and sending them useful news and content (see above) is a great way to cultivate your network. Just make sure you have their permission to email them and don’t overdo it, nobody likes being spammed!
Put in place a referral program.
If you have happy customers why not ask them to refer more business to you and share in the revenue. Reviews are crucial so if you can turn your loyal customers into evangelists by sharing a commission, why not do it?
Generate some publicity.
Getting some good PR is not as hard as you think, although it can take a little time and dedication. Your business story cold be interesting to trade publications (online and offline) or your local press. You can also use a Virtual Assistant to generate PR for you by getting in the news or perhaps winning an award.
Use advertising.
The right advertising for you could be the back pages of your local newspaper or a viral campaign on social media. Whatever it is it should be targetting where your audience is. Social media advertising is good in as far as the likes of Facebook give you a huge amount of data on the potential audience so you can target those that fit the profile of your ideal client. Read our Guide on How to Advertise Your Small Business.
Right… well done for making it through all of this. This is intended as a guide and of course there will be many hiccups along the way but there is nothing more exciting than running your own show. If you would like a free consultation on how we can help your small business grow then please get in touch.
Author: Thomas Smallwood is an outsourcing specialist. Having worked in companies around Europe, from the support desk to the boardroom, he founded bizee.co to help small businesses grow through efficient delegation to skilled virtual assistants. He is an award-winning blogger and a passionate advocate for mental health awareness.
Connect with Tom on LinkedIn.