Maybe the pandemic made you reassess your lifestyle and work, or maybe you already had considered going it alone and have been waiting to take the plunge. Either way, if you have decided to start your own business you should be prepared for a challenging time as you get to know your market, find out about funding and gather new skills. We spoke to entrepreneurs and experts for their tips on how to get a new business off to a great start.
1) Do your research
The idea for your business could arrive in any of a number of ways – it may be based on your skills, the bits of your current job that you enjoy the most, the realisation that there is a gap in the market for a product or service, or seeing a successful business in one industry or area and realising it could be emulated.
However you hit upon it, once you have had the idea you should check that there is a demand for it. You can do some of the research online and by asking your friends and family.
Tools such as HubSpot’s customer persona creator can help you build a profile of your potential client. You could also use online tools such as SurveyMonkey to ask people specific questions.
Think about what you like and dislike about your competitors. How are they attracting customers? If your idea is already out there, can you do it better?
There is plenty of free help on offer. The British Library Business and IP Centre is an amazing free resource for startups, where you can access reports on the latest trends for every industry. It also offers webinars, remote support and potential funding options. The library has 19 national network centres around the UK offering free resources, and a programme, Startups in London Libraries, offers remote workshops.
Be willing to change your plans once you see the results of your research, or there is not much point doing it.
2) Draw up a business plan
This is the blueprint for your business and should pull together information on what you are offering and how it differs from competitors, alongside your plans for funding, marketing and sales. You need to create a business plan if you want to secure investment or a bank loan. It can also be used to measure your progress. There are masses of tips, free templates and examples online.
Start with a brief summary of what your business will do, and go from there.
The Virgin StartUp scheme offers a template that you can download, and mentors you can access for your first year. Helen Hardware, the founder of the women’s coaching business Empowering Transformation, sought help from Barclays’ Female Founders First. “The scheme taught me how to write a business plan, forecast, brand and market,” she says.
Talk through your business plan with someone you trust, to raise questions and identify research areas or opportunities you might have missed.
3) Look for funding
Self-funding your business is the simplest option but it’s often not possible. Besides, using your savings or taking on debt may cause additional stress at a busy time.
Since the start of the coronavirus pandemic many regional and local bodies have launched financial assistance for startups. The West of England Combined Authority, for example, offers support for the creative sector.
Some organisations that offer loans, such as StartUp Britain, also offer mentorship as part of the process, alongside a cashflow plan for your first year.
You could also try crowdfunding through Kickstarter, and even the National Lottery Project.
There are masses of UK angel investors who benefit from tax breaks for investing in startups but it’s not as simple as Dragons’ Den may make it look. Will Turner, the CEO and co-founder of the social fitness app GoJoe, spent more than a year seeking funding. He says: “We found investors through LinkedIn approaches, cold emails to investors on Crunchbase, and pitches through networks such as GC Angels.”
Turner eventually raised £160,000 in October 2020 and a £50,000 grant from the Liverpool City Region Future Innovation Fund. “We were working evenings and weekends on GoJoe for over a year, juggling our day jobs as lawyers with trying to develop our product and raise investment in our spare time,” he says.
Sophia Waterfield, who founded Paranting magazine in April 2021, took out a startup government loan from the British Business Bank. “I started with £10,000 as well as my own money,” she says.
4) Choose the name carefully
Kristina Loudon, the founder of the musical performance company Streettheatre.co.uk, says: “I had a list of names, which shrank after my searches. I then sent these out to a diverse group of people and friends to get feedback.” Some of her castoffs included Doorstep Drama, and West End at Home, which she decided were too restrictive.
5) Tackle the necessary red tape
You will need to notify HMRC when you start working for yourself. You can be employed and self-employed at the same time but it’s essential that you keep the relevant records.
Whether or not you need to register with Companies House depends on your business structure – you will need to if you are starting a limited company.
If you are a sole trader, you need to register with HMRC for self-assessment tax and class 2 national insurance contributions.
Martin McTague, a national vice-chair of the Federation of Small Businesses, recommends trademarking your intellectual property, such as your logo. There is a step-by-step guide on gov.uk. “Failing to protect your IP if needed can be really costly for startups; your competitors will want to copy anything that has value, if it’s unprotected,” McTague says.
Insurance is something every small business will need – but a florist won’t need the same cover as an IT consultant. If you are working from home, check if your home insurance covers anything business-related.
If you are dealing with clients in person, you may need public liability cover, and you should consider professional indemnity insurance if you are providing advice or services. Check the law in your particular business area and what cover may be required.
6) Consider your visual identity
Your personality and business values should be expressed through your branding and design. This is about more than just your logo, says Rich Ford, the strategy director at the creative agency Sherlock Studio.
“Consider your brand colour palette, typeface, photography, tone of voice, sound and motion,” he says. “Settle on something that works across all your communication and sales channels. Is it flexible enough to look fabulous on Instagram as well as packaging or a physical space, such as a pop-up shop?” You need the visual building blocks to set you apart from potential competitors.
7) Sort out your finances
You can use your personal account for payments if you are a sole trader. However, if you are working through a limited company, you will have to set up a business bank account, and it is worth shopping around.
“Most accounts come with a monthly fee – typically £6 to £10 a month for new businesses,” says Andrew Hagger, a personal finance expert at Moneynet.co.uk. “That’s not where the charging ends, though– if your business takes in cash and cheques, this can be expensive.”
You can compare business accounts at Moneysupermarket.com and Uswitch.com. Look beyond familiar, high street names as plenty of smaller online-only or app-based banks offer good deals. Hagger recommends Starling Bank, which offers a fee-free business account. Virgin Money charges £6.50 a month, with no other fees for the first 25 months for switchers or new startups.
Set money aside for your tax bills. A good accountant can be worth their weight in gold when it comes to managing tax. Ask people for recommendations and find someone who is used to dealing with small businesses. You could also sign up to accounting tools such as Xero, QuickBooks or FreeAgent to manage your cashflow and send invoices. These can often be linked to your business account.
8) Tell your story
If you have the budget and a decent story to tell, consider enlisting the help of a PR agency. Or if you don’t have the budget, contact local newspapers and magazines, key trade press or national newspapers yourself. There are useful Facebook groups such as Lightbulb – Entrepreneur and Press Hangout, a community of business founders and journalists seeking case studies and experts.
Journalists like to speak to real people with real stories to tell. A few hours spent phoning or emailing around could reap significant rewards, and any coverage you generate can then provide content for your social media channels.
9) Lean on your network
You can learn masses from other entrepreneurs, so make the most of networking opportunities online, at events and via startup schemes.
You could even pool your skills with other startups to boost your business. For example, you could offer business coaching in return for someone else designing your website.
Check out startup support from business incubators, Enterprise Nation and NatWest’s accelerator programme, for example. All of these provide opportunities to expand your network and access support from other founders.
Millie White, the founder of the gift box provider The Little Leopard Co, recommends joining a small business community, such as the E-com Growth Hub or The Mamahood, and networking with like-minded small businesses on social media. “I’ve met wonderful founders who have become virtual friends, there to bounce ideas around with, share knowledge, ask advice, rant at. The list is endless,” she says.
10) Look after yourself
Setting up a business can be a stressful time and could lead to burnout. Your business may suffer, too, if you are struggling to cope, so it’s vital to take time out for yourself. Decide what definitely needs doing but avoid the temptation to tackle everything.
Meanwhile, find your personal coping mechanisms. “I start every day by journaling for 20 minutes about anything from my hopes or aspirations for my business to why I’m not feeling motivated that day or what I’m afraid of. It helps start the day with a clear head,” says Leila Vibert-Stokes, the founder of a homewares and textile design store. “The most important aspect of running a startup is mindset.”
‘I use social media and built up a following before launch’
Anja Ffrench started Mud & Bloom, an eco-friendly nature crafts and gardening subscription service for kids, in 2017 because she wanted a job she could fit around her young family.
“I was working for a charity. I resigned from my job. I was subscribing to craft boxes for the boys and I really liked getting them, and the fact you had everything you needed to do an activity together,” she says.
“I started looking into it and I was amazed that there wasn’t something out there that was about nature, that was eco-friendly.” With an idea in mind, she spent 11 months developing the concept and getting the business going.
She says she “couldn’t recommend the British Library highly enough for startups”. It advised her on getting a government grant, worth £7,000. To raise more funds she and her husband remortgaged their flat.
As well as working on her first subscription box, before the launch Ffrench put time into creating a customer base. “I use social media – Instagram, Facebook and a bit on Twitter, and I built up a following before launch,” she says. “I told people that we were launching and collected email addresses. I gave these people a special offer. We had 100 subscribers in the first week.”
From the start there were costs – for teachers, who help put together the content, illustrators and designers – but Ffrench got some help from family, too. “I don’t think we made any money in the first year,” she says.
Less than four years later, the business sends out 10,000 boxes a month and employs 40 people, all paid at least the real living wage, and Ffrench’s husband. The couple draw a set salary – and can pick up and drop off their children every day.
“I didn’t realise how all-consuming starting a business is – it’s always there, always looming in your mind at evenings and weekend,” she says, “but I wouldn’t want to do anything else.”
Jack Howker set up the cyclewear business Albion with two friends at the end of 2016. “We were three friends who were riding a lot” he says. “A lot of the cycling brands seemed interested in European races, the Tour de France and the Giro d’Italia. We were cycling in Wales in the pouring rain and it didn’t feel like there was a brand that was talking about that.”
After deciding there was a gap in the market, they decided to fill it, holding their first business meeting in Howker’s girlfriend’s kitchen and designing the type of gear they wanted to buy.
“We had an idea. We knew we wanted to do something. We knew what space it was in. But we didn’t have a name,” he says.
That came to them after a trip to Wales, and Howker says they quickly registered it with Companies House and grabbed a good website URL. But that did not offer much protection. Taking legal advice on how to register the name against copycats was too costly at first but then they found a firm offering help to startups. Although this was still an expensive part of the process, Howker says he would recommend it to other new firms.
For three years they worked in their existing jobs alongside running the business. “We had to get the business making a certain amount of money before we could quit,” he says. That happened in 2019, and they now have different roles within the firm. Since starting the business they have invested a huge amount of time, and some cash. In early 2020 they raised funding from outside the company.
“The timing was perfect as we then went into Covid, which was a daunting time,” he says. “We were lucky as cycling was a good industry to be in because it was one of the things people were able to do.”
Original article: Small beginnings: 10 ways to get your business off to a good start | Work & careers | The Guardian