How to start a business: the six steps to success
Freelance writer and marketing consultant Libby Marks shares her secrets to success in the entrepreneurial world
By Libby Marks
Full disclosure: this article isn’t going to tell you everything you need to know about starting a successful business. We’d need a bit more than 900 words to achieve that! But it is going to give you some food for thought if you’re dreaming about starting a business but don’t know how.
After starting my own business in 2019, I’m evangelical about the freedom and fulfilment that self-employment can deliver. But there’s a lot I didn’t know when I started out on my own.
Here are some of the considerations, practicalities and processes I wish I’d known earlier:
Work out what you want to do
If you’ve got a passion or a hobby you want to make into a business, you’re already ahead of the game. But if you’re considering self-employment out of necessity – perhaps because you’ve been made redundant thinking up good ideas can be hard. Check out this article from Transmit Startups on how to choose a business idea to get your creative juices flowing.
Find out whether it could work
After you’ve shortlisted some options, you need to find out whether your business idea could work.
- Is it possible? You’ll need to think about the practicalities of your business idea. Can you actually deliver what you’d like to? Have you got access to the right resources? Have you got the skills?
- Is it desirable? Do people want what you’re planning to offer? You’ll need to conduct market research to find out. There’s no point building a business around something that there’s no demand for.
- Can it make a profit? To find this out, you’ll need to work out all of the costs you’ll incur to deliver your product or service, and use market research to determine what your prospective customers will be willing to pay.
Decide how to sell
It sounds obvious, but you need to know how you’re going to sell your product or service. This is often called your ‘route to market’. You’ve got something to sell, you’ve got people who want it – how do you connect the two?
For a business selling products, you’ll want to think about where to do that. COVID obviously narrows down your options right now, but looking to the future, will you sell online via your own e-commerce website or through third-party sites like Amazon or Etsy? Will you have a physical shop? Maybe you’ll sell through markets and trade fairs?
As a service provider, where will you promote and provide your service? Will you need your own premises? What about a website? Where will you advertise? How will you take payment?
These are just some of the things you’ll need to work out before you start your business. Which leads us on to…
Write a proper plan
It can be tempting to skip planning and simply get started with your business. But there are many benefits to writing a business plan.
- It helps you make sure you’ve thought everything through. It’ll force you to look at tricky topics such as budgets, marketing and business structure. After you’ve gone through this, you’ll have far more confidence in your business.
- It helps you secure finance. If you need to apply for a loan or are seeking investment, they’ll want to see your business plan to make sure you’re a safe bet.
- It keeps you on track. When you start a business, you’ll find that your to-do list grows exponentially and you have to juggle a lot of jobs. It can be easy to feel overwhelmed. A business plan helps keep you on track by giving you something to refer to and check your progress.
Find out more about how to write a business plan.
Figure out the finances
Some businesses have very low start-up costs, but others will require upfront investment in things like materials, equipment, stock, premises and staff. So depending on the nature of your business, you may need some money to get it off the ground. There are lots of options for funding a new business. From business loans from the big banks and startup loans from the Government to crowdfunding and angel investors.
Remember that your business is likely to incur costs before it starts to turn a profit, so you’ll need money in the bank to tide you over until then. Complete a personal survival budget to work out what you need to live on.
Once you’re up and running, you’ll need to balance your books. Small business finance is probably the steepest learning curve you’ll encounter. You’ll need to get a comfortable understanding of costs, cash flow and balance sheets.
If this is all new to you, it’s worth speaking to an accountant or bookkeeper to understand exactly what you need to keep track of.
Register your business
When you start a business, you’ll need to register with HMRC, and with Companies House if you want to be a limited company.
If you’ve never started a business, you’ll probably have no idea about business structures. Why would you?! But your choice will determine all sorts of important stuff, like the taxes you’ll pay and the paperwork you’ll have to submit to the authorities each year. So you need to decide this at the start of your entrepreneurial adventure.
The two most common types are sole trader and limited company, each with their own pros and cons. This article tells you everything you need to know about UK business structures.
And there you have it. My whistle-stop tour of things to think about before you start a business. It isn’t easy but it is worth it. Invest time and energy into planning your business now and you’re far more likely to succeed in your endeavours. Good luck!
Libby Marks is a freelance content writer, copywriter and marketing consultant based in Newcastle. Libby works with busy marketers and business owners, helping them attract and engage customers with high-quality written content. She specialises in writing search-optimised blog posts, articles, ebooks and guides, helping websites gain visibility and visitors: Write on Tyne: Copywriting and Content