7 STEPS TO STARTING YOUR OWN BUSINESS

Thinking about setting up a new business?

Set up a new business but worried you’ve missed an all important step? If so, check out this month’s startup blog which talks you through the process of starting a business in 7 easy to follow steps!

According to a ‘scientific’ formula by psychologist Dr Cliff Arnall,  Monday 16 January 2017, is the most depressing day of the year.

Blue Monday as it’s also known, is where Tt = travel time; D = delays; C = time spent on cultural activities; R = time spent relaxing; ZZ = time spent sleeping; St = time spent in a state of stress; P = time spent packing; Pr = time spent in preparation. So algebra was useful after all we hear you say?

In simpler terms, the M6 is being its usual stationary self, you’re in denial of your bank balance and the weight gain from that 5th mince pie you ate on Boxing Day has finally hit your hips.

As Blue Monday is yet to be declared as a national holiday, you decide there’s only one thing for it – to quit your job and book an around the world trip.

Unfortunately, as the credit card statements start to roll in and you realise this isn’t actually a viable option, it’s time to put plan B into action – tap into your inner entrepreneur and set up your own business. A more realistic solution but, where to start?

Here at Business Solutions Centres, we’ve put together seven easy to follow steps when starting a business in 2017:

blue monday business formula

Although working for yourself has lots of benefits such as the potential to earn more or the flexibility to work from home, starting your own business isn’t an easy feat.  Especially in the early years, cash flow into your new business can be as up and down as the Himalayas.  If you’ve got monthly bills to pay and you’re the primary earner in your household, it can be a major financial risk.  Also, if you’re a strict ‘nine-to-fiver’, be prepared you might need to put extra hours in to get your business off the ground and this can have a negative impact on any family commitments and hobbies.

So before handing in your notice and finally telling your boss what you really think about them, make sure you’re honest with yourself and the potential sacrifices you’re willing to make.
If you’ve genuinely considered step 1 and still believe starting your own business is right for you, it’s now time for the exciting bit – to decide what your new business is going to be.

Will it be a product or a service? Is there a demand for your business out in the market? What financial investment or resources (e.g. premises, equipment or staffing) do you require? Do you need specific qualifications, accreditations or insurances? What do you plan to call your business?

Simply searching online can help to identify how unique an idea it is or asking friends and family, especially if they’re your target market for feedback is also valuable as they will be your biggest supporters as well as your biggest critics.
There are several types of legal business statuses in the UK. If you’re looking to set up a new business, the likelihood is you’ll be considering becoming a Sole Trader, Partnership or a Private Limited company.

Each type of business has pros and cons which can have implications on things like tax or how financially liable you are as an individual.

This step is critical to get right so seek advice from a professional or the gov.uk website if you’re unsure. Alternatively, a dedicated team here at Business Solutions Centres reviews each of the legal statuses in more detail in their free, monthly business startup seminars held in Centres across the West Midlands.
If you wish to set up as a Sole Trader or Partnership, you’ll need to register with HM Revenue and Customs (HMRC):

Set up a as a Sole Trader

Set up as a Partnership

If you’re looking to set up as a Private Limited company, you’ll need to register (or ‘incorporate’) your business with Companies House. It can take as little as 24 hours and costs just £12 (as at January 2017). You can do this yourself or if you’ve appointed an accountant, some may complete this step for you as part of your annual fee.

In regards to tax, a Private Limited company will also need to register for Corporation Tax within 3 months of starting to do business.

Don’t forget that any employees of a Private Limited company receiving wages or a salary from your business will also be subject to personal income tax and potentially National Insurance (NI) – read more on NI qualifying criteria.
Initially, unless you’re going to a bank to secure finance or applying for grants, don’t rush into producing a lengthy business plan.

A simple 1-2 page, electronic document covering the following areas will give you enough of a structure for the first 6-12 months:

  • Aims & objectives
  • Market research
  • Description of your product/service including features & benefits
  • Target customer(s)
  • Sales & marketing strategy
  • Financials – initial investment and projected monthly in goings and outgoings (or Cash Flow forecast as you’ll see it referred to)

Longer term, if you need to produce a more in-depth Business Plan, you can download free templates on the gov.uk website, located here.

Within your plan, set realistic timeframes for making a success of your new business and as hard as it may be, be prepared to walk away by a certain date if you really have to.
Every new business’ approach to sales & marketing will be unique because it needs to be relevant for your target market. For example, if you are offering kids party planning services, flyers in local nurseries may be effective for reaching a family audience whereas a corporate website might be effective if you’re offering marketing consultancy to businesses.

Sales & marketing are a really important part of setting up a new business, especially if your product or service is competing with established businesses already in your market. Where there’s lots of competition already, the temptation is to price your products and services too low to win new customers. Be careful with this as a pricing strategy. As well as the risk of running at a loss if you haven’t accurately calculated your costs (or your costs suddenly increase due to issues outside of your control), you may also build a customer base that isn’t loyal to you and will switch as soon as someone cheaper comes on the market.

Make sure you fairly price in return for the value customers are getting and hold out for that first sale to get the price you deserve.
Setting up your own business can be a nervous but truly exciting time. The world really is your oyster and every day holds a wealth of opportunity. So, make sure you enjoy it, learn from your mistakes and hold on for the ride that is setting up your own business.

New startups by region

Startups per 10000 people

Wyre Forest : 53
Hereford : 51
Telford and Wrekin : 46
Shropshire : 52
Dudley : 57
Sandwell : 76
Walsall : 58
Wolverhampton : 73

Start Up Britain research 2015 : Centre For Entrepreneurs

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Alison McKenna
Alison McKennaBusiness Solutions Centres Marketing

Ali McKenna is a CIM-qualified marketer with over 9 years experience.  She is currently contracted to the University of Wolverhampton Business Solutions Centre Team as a Knowledge Transfer Development Officer.

With five physical Centres located in Wolverhampton, Hereford, Sandwell, Telford and Wyre Forest, the Business Solutions Centres team provide regional business support across a range of specialisms including finance & funding, business startup & growth, knowledge, skills & training and manufacturing, innovation & technology; all delivered through a series of regional programmes, topical seminars & workshops and one-to-one mentoring where appropriate.

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This blog is accurate as of information available to the writer in January 2017 and are the views of the resident Business Solutions Centres (BSCs) blogger only. BSCs accepts no responsibility for any decisions you may make on the basis of the content in this blog and advise that you always consult a professional if you are unsure.