Are you planning on starting your own business in 2017? One of the worst things you can do is just dive in without any preparation. Here are six important steps for laying a strong foundation for a successful business enterprise.
Adequate knowledge about the economy and general market conditions can increase the survival prospects of any new business. Conduct research about the product or service being launched and network with similar businesses to assess the existing market.
A clearly defined business plan gives clarity to a new business’ goals and objectives. It can also help determine if predicted turnover is adequate to meet the current and future overheads of your new business. If you intend to look for external finance, such as a business loan, lenders will use your business plan to assess the viability of the project (and the risk).
Seek advice before committing to any long-term borrowing, especially with private lenders, as their interest rates could be much higher than those offered by banks and mortgage companies. Financial help from family and friends is a bonus as it might offer easier repayments or lower interest. Keep in mind that if your family home has been used as collateral on a loan, you run the risk of having your home repossessed.
This is an important step to ensure that your new business fulfils all the necessary legal requirements. A solicitor can help you draft contracts and an accountant can ensure accurate records of all financial information relating to the business.
Be aware that there are different rules and regulations for different business types. Sole traders, partnerships and limited companies all have separate requirements. In the UK, you must handle your own registration with HM Revenue and Customs if you are self-employed (or get your accountant to do it) and with Companies House if you are running a limited company. You may also need a business license or a permit that allows you to operate in your area. If the business turnover is expected to exceed a set threshold, the business must also register for Value Added Tax (VAT).
A business name identifies your business, and for professional reasons should be visible on all business stationery. Check to see that the chosen business name is not already in existence to avoid any legal complications and customer confusion. It is wise to keep your business account separate from your personal account to simplify accounting matters.
Insuring your business safeguards it against any costly mishaps. Building insurance, employer’s liability insurance and public liability insurance are only some of the premiums required for any business. Talk to your accountant about the requirements for your specific business and review them regularly.
Even before your business appears on the high street or on the Internet, marketing strategies can create awareness among potential customers. Some offline marketing tactics include flyers, brochures and newspaper advertising, while a professional and well-presented website is essential when maintaining an online presence. Additional networking strategies include frequent interaction on social networking sites like Facebook, LinkedIn and Twitter.
The success of your business relies not only on luck and funding, but on your business acumen. The more you plan, the better your chances of survival and long-term success. Use the tips in this simple guide to start on the right path and get your business off to a flying start in 2017.