Thousands of new businesses open every day. If all those people can do it, why not you? 20% of businesses fail in their first year and around 60% will go bust within their first three years. It is therefore important for you to build your business on a strong foundation.
𝟭. 𝗥𝗲𝘀𝗲𝗮𝗿𝗰𝗵 𝘆𝗼𝘂𝗿 𝗶𝗱𝗲𝗮 Your business idea is clearly inspired. But it helps to check you’re not the only one who thinks so.
As a start-up, you need to figure out who’s going to buy from you, and that is why you need to do customer research. The benefit of customer research is two- fold. It allows you to build better products and services and you have the benefit to learn how your potential customers make purchase decisions.
Completing competitor analysis give you an opportunity to see what they do well and an opportunity for you to work out what you can do better.
Market research can be completed by doing desk research, searching on the internet for public studies into your customer group and following what those people say on social media and community groups.
Market research can also be completed by one-to-one conversations, workshops, focus groups or running surveys.
𝟮. 𝗖𝗵𝗼𝗼𝘀𝗲 𝗮𝗻 𝗔𝗰𝗰𝗼𝘂𝗻𝘁𝗮𝗻𝘁 Having an accountant frees up your time so you can focus on your business. An accountant can handle key functions such as bookkeeping, and filing your company and HMRC returns on time.
As your business grows, your accountant’s input will become more significant, covering essential areas like: financial reporting. Book a free consultation here.
𝟯. 𝗪𝗿𝗶𝘁𝗲 𝗮 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗽𝗹𝗮𝗻 Writing a business plan will help confirm your idea and give you a blueprint for executing it. You will need a business plan to apply for finance. A business plan describes your product or service, identifies who the customer is, explains why they need your product or service, and shows how you’ll make money from that opportunity. How you write a business plan will depend on its purpose. A business plan can explain a business idea or convince lenders or investors to put money behind that business idea. You can write a business plan that’s short, to the point, and easy to update. That may be all you ever need. But if you’re going for funding, your business plan will need to be a comprehensive.
𝟰. 𝗗𝗼 𝗯𝘂𝗱𝗴𝗲𝘁𝘀 𝗮𝗻𝗱 𝗳𝗼𝗿𝗲𝗰𝗮𝘀𝘁 Budgeting and forecasting help with determining if you are able to build a financially sustainable business. A budget predicts how much money will come in and go out from your business over a period of time (usually a year). Budgeting and forecasting help start-ups see if they can afford to start a business – and if it will repay all their hard work with a return on their effort. The purpose of a budget is to predict the money-making potential of a business, but they also tell you how much it will cost to start up, whether you’ll need to borrow money and how many units you need to sell to reach breakeven point, what you need to charge customers and if you can afford staff.
𝟱. 𝗦𝗲𝘁 𝗣𝗿𝗶𝗰𝗲𝘀 Your prices can influence the number of sales you make and the profit you earn on each transaction. Various pricing strategies to be considered. You need to get more money out of a sale than you put into it. Which means you need to know the cost of the goods sold (cost of sales). Cost of goods sold, tells you what your business spends to deliver a product or service to your customer. It’s treated differently to general costs like rent or employee wage. New products (or businesses) sometimes use temporary pricing strategies to try and grow their customer base.
These include: Penetration pricing where you lower margin to increase sales volume. This can attract new customers fast, but the trick is to keep them when your prices go up. Price skimming where you hike prices on new products or services believing that enthusiastic early adopters will pay more. Then you drop prices later on. Sweetener deals where you set prices high but offer introductory discounts. It allows you to create the feeling of a deal without permanently devaluing your product or service.
𝟲. 𝗖𝗵𝗼𝗼𝘀𝗲 𝗮 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿e Your business structure can affect how much tax you pay, and how you’re treated by the law. It’s worth considering the pros and cons before deciding on your legal setup. The main types of business structure are sole trader, partnership, and company. Your choice will affect your admin burden, tax, legal status, and your ability to raise money by selling shares.
𝟳. 𝗦𝗼𝗿𝘁 𝘆𝗼𝘂𝗿 𝘀𝘁𝗮𝗿𝘁𝘂𝗽 𝗮𝗰𝗰𝗼𝘂𝗻𝘁𝗶𝗻𝗴 You will need to be familiar with some accounting basics. There are main tasks that needs to be completed on a weekly and monthly basis. Accounting tracks money as it comes and goes from a business. Some of that information is reported to the government to calculate taxes. But mostly the information helps you manage the business better.
𝟴. 𝗥𝗲𝗴𝗶𝘀𝘁𝗲𝗿 𝘆𝗼𝘂𝗿 𝗯𝘂𝘀𝗶𝗻𝗲𝘀s Depending on the form of ownership, you will need to do some paperwork. These first tasks will keep you out of trouble with the law. When setting up as a sole trader, you can set yourself up quickly and easily at gov.uk. During the process, you’ll register with HMRC for tax, and for VAT if you’re going to be VAT registered. When setting up as a partnership, you’ll need a name, and a ‘nominated partner’ who is responsible for keeping the business records and reporting taxes. Once you have those, you can get set up with the government. During the process, you’ll register with HMRC for tax, and for VAT if you’re going to be VAT registered. Setting up as a company you’ll need to appoint directors and adopt articles of association – you can get some written or use templates. Once that work is done, it’s relatively simple to get set up with the government. During the process, you’ll register for corporation tax. You may also need to register for VAT.
𝟵. 𝗖𝗿𝗲𝗮𝘁𝗲 𝗮 𝘄𝗲𝗯𝘀𝗶𝘁𝗲 Treat your website like an online version of a storefront. It’s the first impression for many customers and prospects. You first need to register a web address and someone to host the site. Best is to find a web designer to complete these tasks for you.
𝟭𝟬. 𝗚𝗲𝘁 𝗲𝘅𝘁𝗿𝗮 𝘀𝘂𝗽𝗽𝗼𝗿𝘁 Now that you’re in business, you want to stay there. We’ve got resources and solutions to help. The first port of call will be your accountant, who will point you in the right direction.