Setting up your own business probably sounds like the dream ticket for a lot of people, you’re the boss, you’re in control of the finances, you’ve got brilliant ideas, the plans to monetize them and big hopes for the future – but the reality of starting-up can be quite different when wheels are in motion.
If you’re 99% certain that starting out by yourself is the way you want to go, have a look over our list of things to consider before you start your own business and make sure you’re 100% before you hand your notice in and get your plans in action!
- Why do you want to do this?
It’s fair to say that there are right and wrong reasons for wanting to set out in business by yourself. Do you want the kudos of having your own business or considering yourself an entrepreneur? Perhaps you’re more interested in the flexible working hours to fit around Call of Duty and Game of Thrones?
Then again, maybe you’ve got an idea or knowledge that you’ve never seen put into practice before – or an innovative approach and work ethic that surpasses everyone in your field.
If your business is going to succeed then you’re going to have to work hard – probably even harder than if you were working a 9-5. Think it through carefully and go into business with your eyes open.
- Have you got a good business plan?
Sadly, it’s not enough to rock up to the bank or investor with a great idea – they’re going to want to see formal plans of how the business will pan out, the role you’ll take, the skills you bring and how financial projections will look.
Having a business plan makes sense for you too – your idea might sound wonderful, but if you’ve got to sell your product to thousands of people before you turn a profit, it might make sense to pursue a different angle.
Get your idea down on paper, make sure your numbers add up and that you can apply yourself for as long as it takes.
- How are you planning on structuring the company?
You need to think about whether you begin as a sole trader or a limited company. Who are you going to be working with? Some larger companies will only want to work with you if you’re a limited company – so don’t shoot yourself in the foot by starting out with the wrong structure.
If you’re in any doubt – or you haven’t thought about it, speak to someone who’s a finance professional with experience in these matters, make the wrong choice and you might end up paying too much tax.
- Is there a market for what you’re doing?
Your idea could be solid gold – but if there’s no one interested in your raw food vegan naturist café then you’re going to have an empty till and a lot of carrots leftover.
Joking aside, market research is key, for example lets say you’re a web design based agency in Scotland. You may want to start with doing some Google searches for web design Scotland to find out what other companies locally are offering these services.
Are you planning on creating a service that the market is already flooded with? Or are you under-pricing your product because the market is calling out for it and you’re the only person who’s listening?
If you don’t know the lay of the land you could be starting out completely unprepared for what meets you when you launch.
- What makes you different?
Why will you win where thousands of others have failed? Perhaps it’s knowledge? Perhaps it’s work ethic? Perhaps it’s your unique set of skills?
Haven’t thought about it? Neither had the thousands of people whose businesses have folded. When you know what it’s going to make you stand out from the crowd then you can approach the market with the confidence you need to make it.
- Have you got the mindset?
There isn’t a business owner or entrepreneur in the in the world who’s had it easy since day 1. You’ve got to be resilient, patient, not afraid to say no, able to learn from mistakes, dynamic – and much more.
It can also be the making of a person who doesn’t feel they’re those things already – so don’t write yourself off, just be prepared to learn a lot about business and yourself.
- How much time will you need to spend on this?
Have you got the time to launch this business? The average business owner works longer hours than most 9-5 workers – and the business won’t wait if life stuff gets in the way, it’ll suffer.
Think about what life looks like now – and what life will look like if you have to spend 60 hours a week shaping your marketing, products, team, recruitment and the dozens of other things that need to be in place if you’re going to fly.
- Is there enough of you to go around?
A lot of new businesses fail because they’re built around the knowledge of the founder member. When he or she takes a day off or is out of mobile phone reception then business goes on hold – meaning dropped productivity, an inability to access resources and gaps in knowledge.
If you’re going to be the cornerstone of your business you’ll need to think about ways of distributing your knowledge and skills. This is key if you want a scalable business without the need for big advances in cloning technology…
- Do you understand the logistics around hiring staff?
Hiring staff is no walk in the park – especially if you want good ones that’ll stick around. You’re going to ask yourself where you’ll advertise, the costs involved, the skills needed to interview and recruit a good team – as well as the legal implications of being an employer.
- Have you got the money needed?
This is a real ‘brass-tacks’ question. You either do or you don’t. If you don’t, where’s it going to come from? If you do, can how long will it last before you need more?
- Are you financially minded enough to keep the cashflow healthy?
Keeping tabs on your cashflow is absolutely vital if you’re going to stay financially afloat. Don’t think about getting money in now and managing it later – you need to be smart with the company cash from day one if you’re going to keep your head above water long term…