A step by step guide to starting your own business
Starting a business is a big decision that comes with a lot of risks and uncertainties. Nevertheless, if you have decided to start your own business, a side hustle, or are still considering it all, here's a step-by-step guide to help you get started. Based on my personal experience and research, I've compiled this list for new business owners (and for those thinking what it takes) to prepare, launch, and thrive.
Since starting a new business is difficult enough, no one should have to spend days learning the basics, so I'm hoping that this guide will provide a brief overview of what a new business owner needs to get started on this challenging but rewarding journey.
1. Identify a need and/or ideal customer, research & plan a business around it
Identify a need: Think of a product or service you can offer or a solution to an existing problem. It could be related to your personal experience, skills or explore something completely new. The idea is that it is something that takes place in the market and can be differentiated from the rest by its quality and/or functions it provides. For that reason, meditate well on what kind of product or service you can provide to people and how you would give it personality to make it stand out.
Identify your ideal customer: It’s important to think about your niche, your target audience, your ideal customer. Someone that will be willing to pay for your product or service because it impacts their life in a positive way whether that means making their life easier, saving them time/money, or simply adding value.
Market research your product or service: This is one of the most important steps, once you have identified your product/service and ideal client, it is time to look for potential competitors in the market that have products and services similar to yours. In this step, you should review the prices, promotions, and advantages that they offer to their audience and start doing a market study focused on improving these aspects when you launch your venture. It is not about comparing but about studying the market and being able to make your place in it.
2. Business funds and setting up a budget
Identify the costs involved: It’s important to note down all costs you may incur when setting up a business, from company registration fee to buying equipment or supplies. The most common costs to consider are business insurances, professional fees (accountants, legal costs), staffing, services (website, telephone, advertisement) and premises hire. Ideally, new business owners should also have a contingency plan, some funds set aside to survive the first year.
Set up a budget: Once you have narrowed down everything you need to start and survive the first year, create a financial plan with costs and funds available. Create a budget and make sure there are some extra funds for unexpected costs. According to research by The Company Warehouse, UK start-ups budget £5,000 on average to launch. However, a study commissioned by Geniac suggests the average UK start-up spends £22,756 in its first year. Unexpected costs and poor budgeting are some of the most common reasons that businesses fail to survive the first few years. So, it’s important to prepare a budget and have a clear source of funds whether that is your own savings, investors, a business loan or a grant.
3. Brand conception & business plan
A different but functional name: Choosing a name for your business should be one of the most important decisions. Today, people prefer practicality over something flashy and difficult to pronounce. So, choose a short name that is easy to pronounce and even more so to remember. The name must be functional, relate to the area in which the business operates or something important to you as the owner. Think of multiple names and don’t be afraid to involve family and friends for their opinions. Once you have narrowed down a few names, check availability for a web domain, social media networks, and even national business registries.
Decide company structure and register on Companies House: You should now think about your company structure. Are there any partners in the business or is it better to trade solo - it depends on the type of business and people involved in it. Read more about limited companies, limited partnership and sole traders on Companies House.
Create a business plan: It is important to write up a simple business plan with everything in the above steps - clearly identifying your business goals, resources available, resources required and the timeframe to achieve those goals. There are many free templates available online that can be used as inspiration. More information is available here.
4. Business bank account and legal matters
Set up a bank account: The money of your business is that, the money of the business. While you can enjoy the earnings, you should nevertheless focus on avoiding tying the business money with your finances. That is why it is better to create a new bank account to keep personal and business separate from day one. Although some places have these operations stopped due to Covid-19, there are online banks like Starling still operating and have a simple online process to set up your business account using their mobile app. It’s secure, free and has simplified business banking for many startups and SMEs.
Keep a record of all incoming and outgoing: Good organisation is key when it comes to money so you must keep a record of all expenses the business incur and any money it makes. You can hire an accountant to help you with money matters or can even do it yourself as long as you do appropriate research on it and have time to do it. There are free online services like Crunch to help you with invoicing, expenses and banking.
Everything legal: When it comes to business you must keep things in check, think about legal formalities to make sure everything flows without any major problems. It is a good idea (and in some case legal requirement) to buy essential business insurances and legal cover - for example, employer’s liability insurance is a legal requirement for limited companies. A good business lawyer can help you identify these, draft business agreements/contracts and obtain necessary licenses for your business to continue working. In the early stages, hiring a business lawyer for every document can be costly so there are templates available online for common legal documents and contract/ policies. You can buy these on a yearly subscription from Simply Docs - it has all business-related documents in one place.
5. Online presence: website & social media
Everything digital: With the arrival of the digital age, it is necessary to define a graphic line that identifies you. Your products must have personality and must be practical, dynamic, and related to your main target. To achieve this, you can hire experts who can give you the advice you need and also create your logo, website, social media pages, posts and other digital marketing material. The creation of your company website should be a priority as this is the main virtual shopping medium for clients and it’s the face of your business/brand. A good website is responsible for instilling confidence in your brand and providing a point of reference to which your clients can return. It is even a place to interact. Therefore, hiring a professional website designer is just as important as using other professional services like accountants or lawyers. At AO Dynamics, we take great pride in developing creative, high-quality, websites and helping you throughout the journey as we believe your success is our success.
Social media presence: The current public is quite visual and detailed. And that is why people are always in search of more information and that data is obtained through social networks. Your new business must reflect its corporate image, post frequently and engage with your target audience on all main social media platforms Instagram, Twitter, Facebook, and even LinkedIn. This connects the business with more potential clients and builds a loyal client base for its services and products. It's also a good idea to set up Google My Business and Bing business page, this improves search engine optimisation hence further help with an online presence and attract potential clients (that can find your business on Google Search and Maps, for example).
6. Marketing the business and identifying other business needs
Word of mouth marketing is free: Once you start selling products or services, it is time to trust your customers to recommend you to their friends and family. After each sale, request feedback from customers and ask them to share their experience on Google, Instagram or Facebook. Also, request them to follow your social media pages for upcoming products and services. Another way to spread brand awareness is to request your family and friends to follow your social media pages and share your posts.
Paid advertisement: It has been around for so long because it is effective. Establish a budget for advertisement on different platforms. Marketing your product or service to the right platform is imperative. Although social media marketing alone is successful for most goods and services, traditional print and broadcast advertising also work wonders. Depending on your ideal customer, choose a platform with a lot of traffic and where potential customers for your product can be concentrated. You can also hire a professional from Fiverr to help with marketing and brand awareness.
Think long-term, identify other business needs: Having easy access to information will make your business more organised and practical when dealing with any situation. You can use organisational and enterprise software to help you access and manage your business data. There are many software available for various business needs, however, the sooner you identify your specific business needs the better you can plan for future growth and efficiency. For example, many companies spend their valuable time and money on multiple software subscriptions each year not realising that a bespoke software that meets all their needs in one place can be more cost-effective in the long run. Not to mention the peace of mind that comes with having your own software that can be scalable according to your business requirements. AO Dynamics specialises in helping start-ups and SMEs identify their business needs and develop affordable bespoke software.
It’s also important to plan for business expansion and identify any manpower needs. Having the right number of people with the right skills is crucial for any business’s growth. Even the need to plan for larger premises to accommodate more customers or employees should not be left to the last minute.
Most of all, have patience and keep going. Some businesses take longer than others to establish and be profitable so don’t rush, plan ahead, follow the steps above and as they say hope for the best but prepare for the worst.
Disclaimer: The above guide is based purely on my personal research and experience. It is not a substitute for legal, financial or professional business advice. I or AO Dynamics Ltd will not take responsibility for any issues that may arise as a result of following the above steps or for losses or failure of any kind as all individuals should carry out necessary risk assessments before starting a new business.
CommentsThese are some great tips! I agree that you have to have patience and keep going. The same rule applies for blogging, you just have to keep going and wait and that's what I try to follow as well.
This is a great article and one any entrepreneur needs to read. I’ve got 2 bank accounts aside from my savings account. It makes taxes so much easier. Having a vision for your busy is so important too.
Planing is very important, and many great tips! Thanks for sharing!
Great tips! Knowing your ideal audience is so important.
What a great layout and sound advice! Thank you!
By Emily Maxfield
Great article! These are definitely some great tips to think about!
Thank you for simplifying it into such understandable steps. This is super helpful for anyone looking to start a business.
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