It’s not easy to start a business but this guide will walk you through the steps you need to take. The most important part of starting a business is knowing who your customers will be and where you can find them. If you don’t have any customers, you don’t have a business.
Starting a blog first is a terrific way to build up your raving fans before you quit your well-paid job, plus a blog can become a lucrative business in its own right. Read my post How To Start A Blog (The Ultimate Step-By-Step Guide).
Finding out “How to Start A Business” is a minefield. It’s not so much that there’s no information to be found. It’s more that EVERYONE seems to be an expert from your Gran to the woman in the seat next to you at the hairdressers. I remember when I started my first business with a friend, a clothing brand. We both tried to avoid the “What do you do?” question.
Not because we were embarrassed about starting up a business. We just knew that as soon as you mentioned “starting a business” everyone felt they had the right to give you advice.
Even if they had no business experience.
Let’s assume you’re here because you’re serious about making money. This isn’t just a bit of entertainment with one eye on the X Factor on a Saturday night. You’ve been thinking about starting a business for a while.
Maybe it’s always been a dream of yours. Maybe you’ve finally faced up to your fears, told your inner scaredy cat to shut up for once and thought okay, let’s find out what being an entrepreneur is all about.
Or maybe you have a terrible boss, a difficult work situation and it’s finally tipped you over the edge. Sent you screaming from the office thinking you deserve better.
I’m sure you do. But just to be 100% clear on this. This blog is for someone who’s serious about business. I don’t write about get rich quick schemes, pyramid selling or MLM’s.
Those are for suckers.
Starting a business is hard work. It means putting the very best version of yourself forward every day. Embracing the knocks and coming back stronger, better, more resourceful.
If you’re ready to grow as a person, take control of your life and build a business you can be proud of, read on. If not, no harm done, go back to watching Robbie on X Factor.
How To Start A Business
#Tip 1 How to Start A Business
First, it’s important to block out the noise.
Today, with the internet, overwhelm is one of the biggest issues when you’re starting a business.
There’s information everywhere! So much advice, so much choice, it’s easy to end up like a rabbit in the headlights diving from one shiny new idea to another.
And not make any progress.
It takes a strategy and a plan to get started. A clear idea of where you’re heading, and a plan broken-down into small achievable steps to get you there.
#Tip 2 Your Business Idea
Perhaps you’ve already got your “amazing business idea”. You woke up one morning and thought, I know, I’m going to open a poodle parlour!
If not think about what you enjoy. What gets you leaping out of bed on a Sunday morning? Do people come to you for advice? Are you an expert at anything? What about the challenges you’ve overcome in life. Does this experience provide a business opportunity?
Brainstorm. Ask your friends, family and get to grips with what you really care about.
Trust me. Whatever you choose as your business idea, you’re going to be spending a lot of time doing it. Best to come up with something you actually want to do, day in, day out.
You may have read The 4-Hour Week By Tim Ferriss. It’s a good read, but let’s be clear, Ferriss poured every hour he could into getting his business up and running. The 4-Hour Week skims over the 24/7 hours it took to get to that stage.
There are businesses you can fully automate, sit back and let the money roll in, BUT and yes, it’s a big but, you have to put the time in first.
#Tip 3 Will Your Idea Make Money
Getting an idea is the easy part. I’m sure if you really think about it, there are tonnes of things you’re good at, knowledgeable about, love doing, that could potentially become business ideas.
The trick is, will your idea make enough money to support you and your family, pay for that car you’ve got your eye on and the swanky holiday in Saint-Tropez? If not, you need to rethink.
I’m assuming you want to start a business to make money. Otherwise, you’re running a charity, and they’re different. If it’s a business, it needs to be something people will want to pay money for.
Something people want badly enough to hand over their hard-earned cash.
People spend money when they need something. It may not be the sort of need your Gran worried about during the Blitz in World War II (safety, food, shelter) but wanting perfect eyebrows, for example, is still a need.
If you have a cosmetic range that gives your customers what they want, (perfect eyebrows), has a unique selling point (fixes your eyebrow in 15 seconds) you’re on your way to a business idea.
The easiest way to make money is to find a niche. Take the eyebrow idea. There are tonnes of cosmetic companies offering the solution to “perfect eyebrows”. But how many are focused on “perfect eyebrows for redheads”?
That is a niche.
Test your idea. Seek out people who would pay for your product or service. Go on forums, Reddit, Facebook groups, anywhere these potential customers hang out.
Can you solve these people’s problems? Is it a big enough market? Will they pay for it?
If not, find another idea.
#Tip 4 Do the Research
Preparation is key. Find out as much as you can about your idea, your market, and your customers. The more work you do now, the better it will pay off once you launch.
Find out who your competitors are, how you’ll create your idea, do you have all the expertise (or do you need to outsource), and really get to know your potential customers.
Some people get stuck at this research stage — don’t. They tweak away at their idea and never actually get out of the starting blocks.
Your idea will never be perfect. At some stage, you’ll need to say “Okay, I’m 90% there, time to get going”. The remaining 10% you’ll figure out once you’ve launched. Spoiler alert — no one gets everything right the first time.
It’s the clangers you want to avoid. Opening a luxury goods shop in a town with high unemployment. Setting up a new social media platform like Facebook.
Trying to compete with Amazon.
#Tip 5 Get a Name
When you have a clear idea of what your business is about and who your target customer is, then and only then, come up with a business name.
Your business name needs to be easy to remember, short and most importantly, available. There are two ways of checking.
First, go on a domain checker such as GoDaddy. Ideally, you want the version for your target market. For example, if you’re based in the UK, get the “.co.uk” extension. If you think you might sell overseas in the future, you also need the .com.
I always try to get both.
Your ideal domain name is taken? Whatever you do, don’t start adding in hyphens or anything else that’s going to make your web address impossible to fathom out.
It takes time to hit that no. 1 spot on Google even if someone is searching for your business directly. Come up with a complicated web address and your customers will never find you.
Secondly, check if the name is available on Companies House. You need to check there’s no risk of passing yourself off as another company. This means if someone’s operating in your sector, you need a different name.
For example, if your intended company name is No Risk and you’re selling driving lessons, it would be okay to use the No Risk name. Other companies currently using this name are selling completely unrelated Fire Safety or IT Services.
If you decide to incorporate, your company name doesn’t have to match your trading name (brand) exactly. For example, your web address could be noriskdriving.com and your company name could be No Risk Limited.
Thirdly, check for trademarks. If the name you want to use is listed check the classes it’s listed under. If they’re unrelated you should be okay.
Done your checks?
Secure your name. Buy your domain name. Apply for your trademark. Register your business.
Go out and sign up for every social media service you can think of. It doesn’t mean you have to use them all (I recommend you don’t), but this way you’re covered. Plus, it stops pretenders, people passing themselves off as you.
#Tip 6 Do the Boring Stuff
This is all the things you need to do get your business running smoothly. These are the things that don’t make any money, so you need to spend as little time on them as possible.
#1 Choose your business structure.
The main choice (in the UK) is between a Limited Company or Sole Trader/Partnership. Your choice will depend on the type of business.
Forming a Company limits your liabilities. It’s more expensive, but it does tend to make a better impression for customers. It also means you’re normally protected if your company fails.
#2 Set up your company.
You can search company formations on Google for an off the shelf version or get an accountant to do it. From experience, you’re better off paying an accountant.
There are all sorts of stuff such as Memorandum and Articles of Association that needs to be set up properly. A decent accountant will charge you around £150 for this service.
It’s also less hassle and leaves you more time to spend on the money-making stuff.
#3 Register to pay taxes.
Your accountant can take care of this.
#4 Get a Bank Account.
Whatever your type of business, you need a business bank account. Go for the one with the lowest fees, preferably free.
#5 Set up payment providers.
Paypal, credit cards etc. How will your customers pay you?
#6 Keep records.
The best option is to get an online accounts package such as Xero and do the day to day bookkeeping yourself.
There’s no rush to set up your accounts in the first few months if you keep records of everything you spend (and everything you make). As soon as you consistently start making money, get a routine going for doing your books regularly.
If this freaks you out — find a local bookkeeper. With my first business, I paid someone one day a month to come in and crack through the books. It was money well spent.
#7 Find out about licenses, permits, and regulations for your chosen business sector.
Make sure you’re covered.
#8 Investigate trademarks, copyrights or patents.
This stuff is complicated. If you’re starting your business in an area where it’s important, get some advice. You can waste a lot of money in this area and in some sectors it’s just not worth it.
I found it was almost impossible to get a patent for clothing design. It can be soul destroying at tradeshows when the Big Players send their designers snooping around your stand, copying your ideas and you’re powerless to do anything about it.
The only way is to keep innovating, keep ahead.
#Tip 7 Money
If you haven’t got any money I suggest your first business should be one that doesn’t need any (or at least very little).
Maybe this mantra should apply to all first businesses.
I always cringe when I’m watching Dragon’s Den and there’s a business owner who’s sunk their entire life savings, and re-mortgaged the house, for a gadget to open cans more easily.
The desperation is etched all over their face, as they grasp at their last hope in the form of a fickle Dragon.
The problem is that entrepreneurs are really optimistic people. So optimistic, they’re convinced they can beat the odds of around 50% of start-ups not making it beyond the first 3 years.
It should be a sobering thought. It should be enough to stop you gambling your money on your “dead cert” idea.
Unfortunately, it isn’t.
There are plenty of options you can run as a side-hustle alongside your day job. Blogging, eCommerce drop-shipping stores, creating online courses, a Saturday Market stall, these are just a few suggestions you can start with little investment.
If you’re still convinced you need to raise money, here’s a list of your main options:
This is one of the most exciting sources of funding to appear in recent years. You need to be good at social media and you need to have a product that appeals to a community.
For example, I’ve seen a fitness brand launch by pre-selling affordable workout clothing. The potential is real if you get your pitch right.
#2 Angel investors
These are usually entrepreneurs who’ve made their own money and like to dabble in helping start-ups.
It can be a really great way of getting business funding. Pick the right investor and you also get a mentor thrown in for free. You do, of course, need to make sure you’re a good match.
#3 Venture Capital Firms
These look for businesses with huge growth potential. Think Tech Industry. They only deal in big numbers and will be reluctant to invest in an unproven startup.
Good luck with that one. Banks plus start-ups = Director’s loan secured on your house.
Just try not to go there.
Same with Government start-up loans. They all ask for Director’s Guarantees.
If you do go down this route, double the amount of money you think you’ll need. That’s unless you want to end up in Dragon’s Den with a look of despair on your face.
You’ll always need more than you think, and you can’t go back and ask for more. Remember, most start-ups fail through running out of cash.
There are still a few around. It will be interesting to see what happens when we leave the EU.
Most grants in the UK require you to match up to 50% of the value which is a real problem for most start-ups.
Plus, you’ll need to write that door-stopper of a business plan.
#6 Friends and Family.
Probably the easiest source of small funds. Just make sure they understand the risk and don’t be too generous handing out equity in return.
You’ll be the one doing the hard work.
#Tip 8 Make a 90 Day Plan
Most business advisors will tell you to “write a business plan”. These advisors help you gaze into a crystal ball and come up with a piece of fiction covering the next 3 years.
I’m calling it out as a waste of time unless you need to secure outside investment. These plans might be good for doorstops, but they’re not going to help you build an agile successful business.
Instead, you need an adaptable approach that will help you launch and grow your business. You need a 90-Day Plan.
Your plan needs a SMART goal. Something that’s Specific, Measurable, Attainable, Realistic/Relevant and Time-Bound.
Starting with a broad goal you apply the SMART criteria creating sub goals or actions that help you achieve the overall aim. Here’s an example…
Broad Goal: Start a Business
- Specific: I will start an eCommerce business on Shopify selling T-shirts.
- Measurable: The store will be set up and ready for my first order within 4 weeks. Within 10 weeks I will be selling a minimum of 10 T-Shirts a week from 5 designs.
- Attainable: I will build my store on Shopify first. Then I will design my T-Shirts and integrate a drop-shipping supplier. Finally, I will promote my business and build relationships with customers through word of mouth, social media, and referrals.
- Relevant: My business will be an outlet for my artistic skills and make extra money.
- Time-Bound: The Shopify store will be up and running within 4 weeks and I will have 5 designs selling a minimum of 10 T-shirts a week within 10 weeks.
SMART Goal: Within one month I will set up a store on Shopify selling T-shirts. This will allow me to make money from my artistic skills. I will produce at least 5 designs and integrate a drop-shipping supplier. I will promote my business and build relationships with customers through word of mouth, social media, and referrals. Within 10 weeks I will be selling a minimum of 10 T-shirts a week.
Make this SMART Goal the keystone part of your plan and chunk your plan down into achievable weekly and monthly steps.
Your 90-Day Plan is a working document. It’s not something you put on the shelf and forget about. Use it, review it, adjust it. Are you hitting your goals? If not, think about why? This brings me to my next tip…
#Tip 9 Feedback — If it isn’t working — Fix it
You’ve got your 90-day plan, all broken down into weekly achievable steps, but it’s just not working. You’re not getting enough leads, not making enough sales, there are problems with production…You’re not hitting your SMART goals.
Your plan isn’t rigid. You need to feedback what works well and what isn’t working. Collect data to back up your gut feeling, don’t just base your strategy on a hunch.
30 to 60 days is about the right time frame to discover whether a new strategy works. Try something, give it a chance to work, feedback, revise your plan.
No-one succeeds in business through luck. Behind the facade of every “lucky” business owner is someone with a plan who’s trying, testing, reviewing, revising, adapting.
Starting a business is an exciting time and it’s easy to get carried away leaping from one idea to the next. Yet to give yourself every chance of succeeding it’s important to make some plans and stick to them.
With so many startups failing in their first few years I’m a big advocate of starting really small. Come up with the smallest possible version of your idea you can think of and, if possible, run it as a side hustle alongside your day job.
Here’s a few links to give you ideas…
Ready to start making your plan?
Originally published at simplyhatch.com on October 23, 2018.