1. Sole trader or limited company?
Which you choose will impact on the tax you pay and how much legal and financial responsibility is laid at your door. As a sole trader you take all the post-tax profits but you are also liable for all of your business’ financial dealings. For a guide on the pros and cons of each, click here.
2. Size up the competition
Who else is doing what you’re planning to do? By studying the competition you can learn from others’ mistakes – or even what their customers appreciate.
If one big player dominates the market space, focus on what they don’t do well or who they don’t cater for; provide a superior service and you could grab a share of their space. Alternatively, if the market is fragmented, there could be an opportunity to launch a brand that becomes the de facto choice for consumers.
3. Define your target audience
Appealing to everyone appeals to no one. You need to focus on your target audience and style everything from your website to your marketing campaigns around them. Make sure you are targeting the right people by sending out questionnaires, speaking to your customers through social media and holding focus groups. The only way to provide a product or service people really want is to get inside their heads. Involve your target customer in the development of your business and continue to test, test, test. Consulting your customers will also make them feel like they have a voice, will breed loyalty and, if you’re lucky, will increase the likelihood of them recommending you to others.
4. Paying yourself
How will you pay yourself? You need to think about this up front. With the best intentions of ploughing profits straight back into the business, you’re going to have to eat, put a roof and drink over your head. Cut back on the luxuries but figure out what you do need to live on and include it in your outgoings. The bank or any investors would much rather see this than you going back cap-in-hand six months after you told them your business plan made sense.
5. Your business name
Think long and hard about your name: you’re going to be stuck with it as rebrands are expensive and painful. It’ll need to work with an available web domain and will also often be the first thing prospective customers see. Consider what your name needs to say about your business. Should it simply be a case of ‘says what it does on the tin’ or communicate aspects of your brand identity, such as Innocent Drinks, or perhaps geography is important if you’re focused on serving or representing a local area – Manchester Landscaping Ltd or Premium Lincolnshire Sausages Ltd.
6. How you’ll get your name out there
No point having an amazing business idea if nobody knows about it – so how will you get your name out there? Use social media and network hard to start building a reputation with not just potential customers, but also local journalists, suppliers, fellow retailers, local business organisations.
7. Your web presence
Did you know that 50 % of small business don’t have a website? Most want one, but they either think they can’t afford one or don’t have the skills to put it together themselves. The latter may have been true a few years ago, but web building tools such as Moonfruit – available as part of Smarta Business Builder – mean absolute beginners can now get a fully e-commerce website up and running in no time. You might not need to sell online though, perhaps a simple brochure site showcasing what you do would be enough – but, then again, wouldn’t it be nice to take bookings? Start thinking about how much more business you could be doing by embracing an online market – then explore the available options to make it happen.
8. Your USP
If you offer something better or different, customers will only stop buying from other businesses in favour of yours. Your USP(unique sales proposition) defines what is special about your offering; what customers can’t get elsewhere.
Carefully sculpt your USP: perhaps it’s your product if it is genuinely unique, or maybe it’s about customer experience; after-sales support; the way you price or offer payment; or that everything you do is organic. Maybe, like Tom’s Shoes, which donates footwear to Africa for every sale made, you appeal to consumers’ growing demand for ethical trading. Find your angle then make sure everything you do is true to it.
In an ideal world you would have enough money to self-fund the launch of your new business. For the majority, that’s not an option. If they may be willing to help or you can look into getting a bank loan or seek out an investor, instead you can ask friends or family. You should also look into what business grants are available: they’re hard to come by but brilliant if you manage to get one. If you can’t secure the funding you need to launch your master plan, start small and prove the business works – then go back to the bank or investors with more evidence.
10. Find an accountant
An accountant is much more than just a bean-counter. They should be a valuable and trusted source of financial and business advice. Usually armed with many years’ experience they can help you steer the company away from danger and advise you when and where to save your money. Seek a local accountant with experience in your sector who’ll see you as a big enough client not to just pass you onto a junior. Ensure you can afford to pay for help like this by not frittering away money getting them to sort out your shoebox of bills and invoices.
11. Write a business plan
Business plans rock – really! Don’t view them as a chore you must do for the bank or an investor – use this as a chance to prove to yourself that every aspect of your business plan and model works and makes sense. If it doesn’t, do you really want to go ahead? The LivePlan software in Smarta Business Builder takes you step-by-step through every process of putting together a business plan, from the executive summary to the cash forecasting.
12. Route to market
This one’s really simple – how will you sell to your customers? What’s your route to market? Consider all your options, from market stall to eBay shop to mail order, to retail unit or concession, to picking up business at networking events and on social media to telesales or integrated partnerships or simply via Google Adwords. Where will your business come from? Where’s the obvious place to start? You can’t possibly write a business plan until you’ve worked out your platforms and route to market and how much each will cost you.
13. Potential partners
Who could you benefit from working with? Forming a relationship with a business in another sector could help you tap into a whole new customer base. For example, if you’re a florists you could find a wedding planner and supply flowers for them at a discount. You’ll get access to their customers and you can recommend people to them too. It’s beneficial for both parties. Find someone to share half the workload and you’ll move twice as fast.
14. Licensing and legal issues
When launching a business you should speak to the local authority to find out whether you need any special licenses to sell in your area. If you are selling alcohol or food you need a license. You’ll be fined and could ultimately be closed down if you fail to produce one. There are a host of other legal obligations to consider and it’s best to get at least one session of legal advice. You should also ensure processes – from sales to supplier agreements and terms and conditions – are legal binding and contracted up. Smarta Business Builder provides access to a library of legal contracts written by award winning solicitors that can personalised to your business.
15. Find the best business bank account
You’ll need a business bank account – but don’t just go straight to the bank you’ve used as a consumer. Find one that understands your business and who you feel comfortable with. Most banks also offer incentives for new sign-up.
16. Staffing requirements
Will you need employees from day one? If not, how about day 100? You need a plan for this so you’re organised, prepared and resourced for whenever – if ever – that day is. Employing someone is a big commitment to the individual but also to your bottom line. Don’t jump into it and be clear before making any appointment exactly what that person will do and what added revenue they will bring to the business: it’s usually an equation that results in a quick rethink! Look and utilise freelancers what you can outsource if you can.
You are required by law to have employers’ liability insurance if you have any staff and public liability insurance if you expect to welcome customers or suppliers onto your premises. You must also insure any vehicle you use. , if you sell products explore if you need product liability insurance.
It can be expensive, but think if your business could survive should the unthinkable happen and your premises, equipment or stock was stolen or damaged.
Shop around for the best deal and ask your bank for any deals that may come as part of your account. Premiums are increasingly annually, so research ways you can keep quotes low.