With entrepreneurship continuously growing, there are more and more new businesses being created every day – especially in London.
However, it’s a real risk if you have never run a business before: over 50% of new start-ups go under within the first three years. To avoid that, here are some important tips that every entrepreneur should be aware of when setting up their first business.
Once you’ve decided what kind of business you want to set up, you should make sure that no one else takes your idea.
You may already have copyright protection, but if not, you can register your intellectual property either through a patent or a trade mark.
Most start-ups need some help getting off the ground, and there are various ways to do this.
Once you’ve done your research and established that there is customer demand for your product or service, you should create a cash flow forecast. This will help you when you pitch to potential funders and investors, showing that you have thought about the future of your business.
Entrepreneurs can apply to a government-backed scheme to begin with, and then apply for a loan from a bank, or sell shares.
Know your audience
As mentioned above, market research is crucial, especially considering the level of competition. Once you know how many people would be interested, decide how much you could charge – but remember to be realistic throughout the process.
If you can, get prospective customers on board before you go fully live: this will give you a strong foundation to build on, and a good basis for initial feedback.
Make a plan and put it on paper
It may sound obvious, but ensuring that you have covered every angle is crucial to make sure that funders and customers take you seriously.
Summarise what you see as a gap in a market and how you can create a profit from satisfying that need – but don’t focus only on money and potential sales. You should also think about a contingency plan for the worst case scenario, as well as how you will survive during the first few years when most businesses make a loss.
Don’t go it alone
Starting a new business can be made much easier if you can find a co-founder – particularly if they have skills in areas that you don’t. For example, if you are good at marketing ideas and they are good at numbers and finance, you are more likely to succeed together than apart.
Other important partners are any suppliers you’ll need for materials, equipment, or services; finding a reliable supplier who delivers value for money is extremely important, especially for new businesses when money is tight. As you build relationships with them, you may also find that you begin to get discounts.
Finally, if you are planning to operate in more than one area, look into a distributor – making sure your product is successfully delivered is just as important as creating it.
Make sure everything is done right
Before you begin operations, you must register your business under the right legal structure. Doing this will ensure that you’ll pay the right amount of tax, you’ll know what kind of financial risks you’re taking, and you’ll establish how much control you’ll have in running the business.
You can do your own research on the government website, or you may wish to seek advice from an independent advisor – some services are offered for free.