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How to start your own businessExpert tips from those who've done it

So, you want to startyour own business?

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You’re not alone - up to 40% of people in the UK are believed to want to start their own business. More people than ever are starting up - some 610,000 new businesses were registered in the UK in 2015.

Why are so many people starting their own business? Well, largely thanks totechnology, it’s easier, quicker and cheaper than ever. It’s much more commontoo, with people from all backgrounds now starting their own businesses.

Some people do it to boost their earnings or gain greater flexibility so they canbetter balance their work and family commitments. Running your own businesscan also be much more exciting, fulfilling and rewarding than working forsomeone else.

5.4mTotal number of privatebusiness in the UK - a new highand 900,000 more than in 2010(source: GOV.UK)

99.3%Percentage of private sectorbusinesses in the UK made up of small businesses (source: GOV.UK)

608,110 Number of new businessesstarted in the UK in 2015 – arecord high (source: The Centre for Entrepreneurs)

£1.2 trillionContribution to the UK nationaleconomy each year by smallbusinesses (source: GOV.UK)

3.3mNumber of self-employedpeople (“sole traders”) in the UK (source: GOV.UK)

18%Percentage of UK jobs providedby small businesses (source: GOV.UK)

1.6mNumber of limited companies in the UK (source: GOV.UK)

2.9mNumber of people in the UKwho run a business from theirhome, and 65% want to stayhome-based (source: Home Business Report).

£325The average cost of starting an online business(source: This Is Money)

UK SMEs in numbers

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Some people base their business on an interest or hobby, while others spot a gap in the market, sometimes by finding a solution to a problem. Although it takes hard work and sacrifice, running your own business can offer much more enjoyment and satisfaction.

But there are risks. Half of all new businesses fail within a few years, oftenbecause of poor decisions made when starting up. So, what steps do you need totake if your new business is to get off to the best possible start?

Taken from the Start Up Donut website - leading source of start-up news, adviceand free resources - read on to pick up tips on how to start your own business.You’ll learn from the most qualified experts of all - people like you who’vestarted their own business…

Inspiration can come from manyplaces, but online research is agreat place to start looking forideas. What other businessesare out there? Perhaps you’vealready spotted a gap in themarket, or know how to solve aproblem or improve an existingproduct or service.

“Base your businessidea on something youlove, that way it won’tseem like work. And try to find ways to bespecial. Give people a reason to buy from you rather thansomeone else”

John MarsdenThe Melwood BeerCompany

Decide what typeof business

Think of yourbusiness idea

Should you run it on a spare-time, seasonal, part-time orfull-time basis? Offline, online,or both? Will you sell toconsumers or other businesses?Buy an existing business orcreate your own? With a partneror on your own? Carefullyconsider the implications for youand others before starting yourown business.

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“Never launch a business withoutresearching yourmarket. If you’ve doneyour homework and are confident you havea unique idea, get it tomarket quickly”

Adam EwartSendmybag.com

Speak to potential customers -not just friends and family. Askwhat they think of your businessidea. Crucially, seek theiropinions on quality, price andservice. What would make thembuy from you? Learn from thefeedback you receive.

Do some marketresearch

Test your business idea

Find out about your competitors.Online research is a good placeto start. What do they sell andhow much do they charge?What are their strengths andweaknesses? Think about who ismost likely to buy from you andresearch their wants, needs andbuying habits. What don’t theylike about existing suppliers?

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By now you should know howmuch potential customers willpay, but will this generateenough profit? Work out yourlikely start-up costs andconsider how you’ll cover them.You should only ever buy thingsfor sound business reasons.Borrow and be resourceful tominimise your start-up costs.

“It’s better to slightlyoverestimate yourstart-up costs. Bewareof hidden costs and besure to work out howmuch money you’llneed to stay afloat forthat all-important first year”

Shamin Hoque Curries Online

Decide what you’llsell and how

Do your sums

Use your market research toimprove your offer. If you’vefound that there isn’t muchdemand for what you wereplanning to offer, go back tosquare one and try to find abetter idea. Once you knowwhat you will sell, decide howyou’ll sell it.

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“The financialinformation in yourbusiness plan is veryimportant. It’s whatexperienced peopleconcentrate on whenthey look at a businessplan. Your figures mustadd up”

Chris WildmanTown End Farm Shop

If you can operate from home,great - lower costs will meanyour business is more likely tosurvive. Get together everythingyou need to operate from home.If you need premises, beginsearching now. Think carefullyabout location and space. Seeklegal advice before signing acommercial lease.

Write your start-upbusiness plan

Set up a base orfind premises

Writing a start-up business planmeans having to clearly explainwhat your business is, its market,costs, likely sales, goals andstrategy for achieving them.You’ll need a sound businessplan if you plan to borrow. Keepyour forecasts and assumptionsrealistic. Read and update yourplan regularly.

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Work out what you need to getup and running and search forsuppliers that can offer bestvalue (which doesn’t alwaysmean the cheapest price).Explore your options; negotiatefirmly and request discountsand credit (although you maynot get either at first).

Start looking for staff

Find your suppliers

If your new business needs totake on staff, finding the rightpeople can take time, but it’scrucial to your success. Do youdo it yourself to save money orpay a professional to help yourecruit? There are rules aboutrecruitment. You should alsomake sure you understand your obligations underemployment law.

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“It may seem difficult tobe choosy when you’rerecruiting your firststaff, but it’s important.Put more effort intoyour early recruitmentthan any other issue”

Chris BarlingSellerDeck

Much more than a name, logo,typeface or colours (althoughthese are all important),branding is the perceptionpeople will have of yourbusiness. Learn lessons fromsuccessful brands you admire,but realise that having adistinctive, engaging brand willset you apart and help you toattract customers. Protect yourbrand fiercely and apply itconsistently.

Think of a goodbusiness name

Create your own brand

Although enjoyable, this is oneof the most important start-uptasks of all. The right namecould make all the difference toyour marketing. Pick one that’sdistinct, memorable, legal, shortand easy to say that creates theright perception. Also find out ifyou can get your preferredwebsite address.

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“Come up with a few potential business names and ask lots of peoplewhich one they prefer.Say your shortlistedname repeatedly andimagine using it tointroduce your business.Visualise it everywhereit will appear”

Jennie AvramovicClevercow

Even if you don’t sell online,having a website can help youto attract customers. Doing ityourself will be cheaper, butpaying a professional shouldguarantee better results, if youcan afford it. Also establish yourbusiness presence on Facebook,Twitter and other social mediaplatforms.

“Rather than setting upa limited company, Ibecame a sole traderbecause it’s easier,cheaper and there'sless admin to do, plus,my personal financialliability is limited”

Andy Oakley AO Pro Finish Plastering

Register your new business

Create a websiteand social mediapresence

Call HMRC on 0300 200 3504 orregister online to become a soletrader or to remove personalliability for business debts, youcan create a limited companyvia Companies House. Otheroptions include partnerships,limited liability partnerships oreven a social enterprise if youwant your business to tackle asocial problem or otherwisebenefit the community.

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“Decide whichcustomers to target,how you’re going toreach them and howmuch money and effortyou can commit.Reaching a smallernumber of the rightcustomers is better thana far greater number ofthe wrong customers”

Ross Campbell The Exercise Club

Open a business bank accountand find out what start-upsupport is available from yourbank. Set up a reliable,convenient bookkeeping systemso you can maintain accurate,up-to-date financial records.Consider hiring a goodaccountant to advise you andhelp with your tax obligations.

Tell potentialcustomers that you exist

Get your businessfinances sorted

Start publicising your newbusiness before launch. Don’twaste money on advertising.Explore no-cost and low-costoptions first. Simple word ofmouth could generate sales.Put up cards and posters anddistribute some leaflets. Hold a launch event and do yourown PR. Make the most ofsocial media.

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What else can you learn?Specialising is betterthan generalising…“Trying to be all things toall men can mean you endup appealing to no-one.”Nick Cooper of Big Tall Order

Proper planning pays off…“Make sure you plan your start-up journey. If you miss a stage or go about things inthe wrong order it could costyou dearly.” Naomi Kibble of Rocktails

Don’t overstretch yourself…“We’ve invested in newequipment when we could afford to, guided by our sales and cash flow.” Jon Mowat of Hurricane Media

You don’t have to beunique…“It's not always about creatinga brand new concept. Often it’ssimply a matter of improvingwhat already exists.” Nick Telson ofDesignmynight.com

Market research isessential…“Look for firm evidence ofdemand and find outwhether people will payyour asking prices.” Henry Virgin of Green Boar Organic Tea

Talk is cheap…“Sometimes people tellme they had the sameidea. Maybe, but theydidn't do anything aboutit. It takes hard work andcommitment.”Matt Horan of Rollasole

Being resourcefulreduces costs…“I redecorated ourpremises and we madeour own seating. Webought all our furniture,pans and crockerycheaply online and fromsecond-hand shops.”Djamel Ait Idir of Algeriancafé-restaurant Khamsa

Safeguarding yourcreativity is crucial…“Seek professional legal advice about protecting yourintellectual property. Leavenothing to chance, but be aware that protecting your IP can be costly.”Helen Daniels of Flatmate Duster™

You’ve got to be special…“If we hadn’t differentiatedourselves, we’d be ‘justanother sandwich shop’.Being different - if you get itright - has appeal.” Griff Holland of Friska

Mistakes offeropportunities to learn…“Making mistakes andpicking yourself up is allpart of the journey. Theconfidence we now feel is a result of the mistakeswe’ve made.”Pat Hammett ofDrummond + Hammet

You’ve got to staypositive…“Don’t be discouragedby negative people -often they've never runtheir own business. Butthat doesn’t meanignore valid criticism.”Rob Forkan of Gandys

Focus on your margins …“Aim to make a profit from day one. If you’re not making a profit, you’renot running a successfulbusiness.”Ling Valentine ofLINGsCARS

One loveNothing should get in the way of you building your business – least of allcomplexity. Even if you lack experience, Sage One software enables you to manageyour accounts and payroll – saving you time so you can do other things.

Sage One is simple to use. There is no jargon or confusing processes, just an easy way to get things done.

Why choose Sage One?

Cloud-based so can be accessed anytime, anywhere Works on PCs, laptops and Macs, iOS and Android devices Data is secure and backed-up More convenient for your accountant or bookkeeper Free automatic updates Free 24/7 telephone and email support 365 days of the year

Discover how Sage One can enable your business to succeed at SageOne.com

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