22 Jul Starting a Business – Your top 5 Priorities

You’ve done your research, you know your market and you have confidence in your product or service. You’ve given your business a snappy title and you’ve got the tools, equipment and stock to get going.

You are ready to start your business journey.

Or are you?

Here are some business fundamentals you should be bearing in mind before plunging head first into the day-to-day practicalities of running a business.

Business plan

When you start your business without a business plan you run the risk of being disorganised and without focus as your business takes off and develops.

Your business plan should:

• Identify what your business is, where it sits in the market, its needs in order to function (employees, equipment, premises, marketing etc.)
• Provide a coherent, achievable growth strategy
• Establish the likely needs for future finance during periods of growth

If you need to attract investment or start-up capital in the form of a loan, a comprehensive business plan is crucial.

Finance

There may be some businesses which can start trading without loans or investors, but this is not often the case. Before setting out on your business journey you need to be realistic about how much capital you need to get off the ground and stay afloat until you are breaking even.

This budgeting plan should include money to fund your own cost of living and take into consideration the fact that you might not turn a profit in the early days. (Your business plan should help you establish the amount of time you will need before your income covers all your outgoings).

Business structure; personnel roles and responsibilities

If you are starting your business alone, you will be the director or sole trader. You will be able to make all the decisions yourself, but you will also have all the responsibilities on your plate.

Alternatively, you might wish to enter into a partnership with another person or persons who can share the responsibilities and liabilities. If you are forming a limited company, you will need to appoint directors who will assist in the running of the company. They will need defined roles and accountabilities.

Business banking and accounts

Making sure you handle business money correctly and effectively is key for a start-up business. Keeping on top of your accounts and doing the books regularly is essential. It’s a really good idea to open a separate, business bank account so that you can keep the business’s funds and your personal money separate.

Read our blog on Essential Accounting for Sole Traders to find out more about how to get started. The article also looks at tax, national insurance, and VAT.

Buy the right business insurance

The amount of business insurance you need will depend on the type of work you carry out and the size of your business. Some businesses, such as lawyers, architects and private healthcare providers need very specific business insurance to cover themselves for when things go wrong, so it’s important to have the most appropriate business insurance in place.

If you have staff, you are legally obliged to have employer’s liability insurance and there are several types of other cover that you may wish to consider to cover, stock, equipment and other risks such as business interruption and losses caused by fire, flood and theft. Talk to an experienced business insurance provider who can guide you through what you need and put together a business insurance package that’s right for you.

Other factors to consider

There are a number of other items that could be on this list, but not every business needs every item. Once you’ve got the above sorted out, you might want to consider the following and whether they are necessary as you start your business:

• • Premises: Not all business start-ups will need premises straight away, but trading from the wrong location might hinder your ability to grow. When thinking about leasing a premises, you should consider carefully the full costs, proximity to target market, the available facilities, infrastructure links, licences and insurance requirements.
  • Marketing: Having a well-structured marketing plan in place is likely to be key for growing your business. Evaluating the suitability of the different marketing channels available can be crucial. Choosing the wrong one may be extremely costly.
  • Website: A business’s website can fulfil so many roles; it can be a brochure for your product or service, it can be a lead generator and include online contact forms, offers and highly visible phone numbers, etc., and it can be the place to build your brand identity. If your budget is tight, think about, at the very least, securing the right domain name and then maybe create a placeholder page with some basic details about you and your product or service, and contact details, so that any potential customer can check you out and get in touch.

So, now you’re set. Good luck and good business!