 Even small businesses need careful planning |
If you're thinking about starting your own business, do your homework.
You'll need to do some research both into your business idea and your own suitability.
Running a small business can be hard work - stressful, lonely and time-consuming. It can also be very rewarding, inspiring and lucrative.
Think about why you want to start a business. Are you motivated and resilient? Do you like working alone? Have you got patience and determination? Are you self-confident and flexible?
You'll also need to decide how you want to structure your business:
Sole trader - this means you are in business by yourself, you operate under your own name and you are solely responsible for any debts you incur. Partnership -you might decide to team up with a friend, which can be useful if you need more finance to get started. Private limited company (Ltd) - you can raise finance by selling shares to friends and family. If you start a limited company you will have to register its name and address with Companies House. This costs from �20. Once you've decided whether you have the right skills, and what sort of business you want to start, the next stage is to prepare a business plan.
Marketing strategy
This basically sets out how you intend to run your business. It is really important. It'll not only focus your idea, but it will also be the basis on which organisations will decide whether to lend to you. The plan should include:
a description of exactly what the business is - where it will be located, and what it will do evidence of a market for your idea - who will use your service? Are there other people offering a similar product or service? a sales and marketing strategy - why your idea is going to be a success and how you will promote your venture. your finances - how much you'll need to set up and sustain the company and where you plan to get your money? When do you expect to start earning and how much do you think you'll make from it your skills and experience your targets your contingency plans if the business goes wrong If you need start-up finance, banks are perhaps the most obvious source. Most will have a small business advisor to approach for loans or overdraft facilities.
Before they lend they will want to see a detailed business plan as evidence of your business's potential.
 |  Don't forget certain types of business such as mobile food vans or market stalls require a local authority licence  |
As well as banks you could approach a venture capitalist or business angel. These individuals or companies often provide equity in return for a stake in your business - a share in profits and a say in how the company is run. You might also qualify for a grant. Try your local authority or organisations such as The Prince's Trust or Shell Livewire.
You'll need to tell the Inland Revenue that you are setting up a business so that you can register as self-employed and start paying National Insurance contributions. The Revenue has a helpline - 08459 154515.
You must keep a detailed record of your business transactions. Get a proper system in place from the start and update it regularly. By law you must keep records for all your business income and expenditure. And you need to keep records for at least five years.
Depending on your turnover, you may also have to register for, and charge, VAT. Your local tax office will advise you on this.
You should also talk to your local authority about paying business rates, and don't forget that certain types of business such as mobile food vans, or market stalls require a local authority licence.
Also look on the Business Link website at www.businesslink.gov.uk or call on 0845 600 9006 for more general information on starting a business.
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