A checklist for starting a business in 2015
Some points you should consider and tick-off before creating your own startup.
The entrepreneurial climate in the UK continues to grow more welcoming and is highlighted by figures from Companies House, which saw over 580,000 new businesses being registered in 2014, a record high.
“Starting a business is easier, quicker and cheaper than ever thanks to new technology,” said Luke Johnson, chairman of the Centre for Entrepreneurs.
Now it seems 2015 could see an even greater number of startups looking to leave their mark. However, starting your own business comes with a number of risks and over half of new businesses fail to make it through the first three years, which might be an indicator of how underprepared some entrepreneurs really are. If you want to survive those first few chaotic years it’s best to make as many preparations as you can.
Below are a few of the key factors that new enterprises should aim to have in place before starting to trade.
Register your idea
After you’ve had that first brainwave and decided on the idea that will become your new business, you might want to make sure nobody else steals it from you by registering your intellectual property.
You could apply for a patent or register a trade mark. Also, don’t forget, you can check whether your work will automatically get copyright protection.
There are several ways you can gain funding for your business. To begin with, there’s a chance you could get help from a government-backed scheme for initial funding to test and develop your business idea. Following this, you might look to secure a bank loan or to sell shares to private investors.
Either way, before you start requesting cash, you should determine whether there is demand from consumers for your business. If you’re confident of this, then create a cash flow forecast to show potential funders and prove you’re serious about your idea.
Know your market
Perform market research to determine if there are enough buyers out there, try and estimate the number of consumers you could reach and the prices you could realistically charge them. Remember, it’s imperative to be realistic with your projections, especially as the current marketplace is hugely crowded and you may be competing against a number of rivals for your share of the market.
Ideally you’ll have a number of customers signed up before your business goes live, ensuring you have something to build upon.
Plan, plan, plan and write it down
Every startup should have a business plan, otherwise you’ll find a less than positive response when searching for funding. Try to sum up the customer need you’re looking to fulfill and how you can turn that into a profit. However, it shouldn’t only include projections of sales targets, revenues and costs. Take the time to consider how you will support yourself during the first few years where most businesses are loss-making.
Create a contingency plan that thinks about the worst-case scenario.
Locate partners and reliable suppliers
Setting up a business alone can often be difficult as you’ll be responsible for everything. It often makes it easier to find a co-founder that has expertise in areas that you lack, allowing both of you to focus on the areas you know best, increasing the likelihood that your business will take-off.
Furthermore, you should source suppliers for the materials, equipment, or services required to get your business running. Finding reliable suppliers who are trustworthy and consistently deliver top quality on time is more valuable than finding the cheapest supplier. Try to build relationships with the best suppliers and you may find the discounts come with time.
Don’t forget to think about your methods for delivery, if you’re planning to expand outside your local area you may need to work with a distributor.
Set up your business
Finally, before you start trading, you’ll need to register your business under the correct legal structure to ensure you know the amount of tax you’ll need to pay, the amount of financial risk you’ll be taking on and how much control you’ll have over the way your business is run.
Don’t forget, you can seek advice from an independent adviser, some services are often provided for free. Not to mention, there’s a wealth of information on the government website that can help answer any questions you may have.