Everything you need to know if you're starting a business...
Posted: September 6th 2016
Being an entrepreneur can be one of the most rewarding and exhilarating jobs there is, but never underestimate the organisation and hard, hard work you have to put in to make it a success. If you’re not 100% committed to starting a business and determined to make it work, quite simply: it won’t.
It’s said that three quarters of business start-ups fail within the first three years. A third of those crumble in the first six months. But please don’t forget that golden quarter that have the innovation to succeed. Thinking of starting a business? Consider these vital factors in the first instalment of our new business tips and make sure you’re in that top quarter of the bunch whose businesses fly sky-high...
Is your business idea viable?
It may be glaringly obvious but if you have a business idea, you need to consider whether it will actually work. Is there a gap in the market a company like yours? Do you have the right skills and finance to allow it to do well? You need to make sure your competitors aren’t too much of a threat and that your target audience will definitely buy into your idea. There’s a lot to take on board when you’re bringing your business idea to life, but with a logical thought process and educated advice, you’ll eventually find the right path to go down.
In business, individuality is key. Take Sunderland's independent record store Pop Recs Ltd for example – this is a business that’s unlike anything else in the city. It hasn't always been easy for them but they've made their business work. Michael McKnight, one of the owners of Pop Recs, said: “I think the first thing we had to establish was 'what do people want?' Pop Recs kind of works as there's not really anything similar around here. There hadn't been many bands here since the 70s, Sunderland was down to just one record shop (there use to be tonnes) and trendy coffee hadn't hit our city yet. We kind of just ticked all those boxes.”
If you can find something that has its own niche like Pop Recs Ltd did, you’re onto a winner.
What will your business name be?
You need a business name that is going to work for you and that people are going to love. Some key things to think about are: how it sounds, how unique it is, how easy it is to pronounce and – perhaps most importantly in this day and age – how easy it is to type into a QWERTY keyboard. People need to remember your name and it is the first impression you’ll make on potential customers, so you need to make it shine.
An example of an excellent business name is at a relatively new micro-pub on Middlesbrough’s Baker Street called The Twisted Lip. This name is quirky and snappy, and although the idea comes from a Sherlock Holmes book to tie in with the street name, it is unique. In other words: if you type The Twisted Lip into Google, this pub is all you see, from social media pages to articles about the pub. This is just what a new business needs – individuality and online coverage.
Have you thought about your corporate structure?
When you’re working on a start-up business, you need to know whether you’re going to work as a sole trader or as a limited company. This decision can have implications on your tax, legal and financial responsibilities so it’s not one to be taken lightly.
You might be wondering: what’s the difference between the two? Well, setting up as a sole trader is the easiest option if you are the only owner of the business. It simply requires registering your business name and you will have complete control over the business at all times. Registering as a limited company is a huge step in a different direction. A limited company is completely separate to its directors, meaning that if there are any problems with the company, it is not the solitary responsibility of the business owner, but of the company itself. Essentially, even as a business owner, you are paid as an employee as well as a shareholder.
There are pros and cons to being a sole trader and a limited company – you need to weigh up your options and plan what is most affordable for you. As stated by Matthew Smith, a Corporate Lawyer based at Tilly Bailey & Irvine Law Firm’s Commercial office, “The first consideration is selecting the right corporate structure (i.e. sole trader, limited company, partnership etc.). This is crucial as it is not always easy to change the model once you have started down a certain path. Setting off on the right foot, with correct documentation and the correct model will make growth much easier and potentially faster. Each structure has its own benefits and limitations and which one you choose is dependent upon a number of factors; for example; tax, personal liability and whether or not you intend to introduce additional shareholders or partners to the business. You should think very carefully about your long-term intentions for the business and how you want it to grow before deciding on your preferred corporate structure.”
Have you put together a business plan?
Having a great idea is one thing, but actually planning how it will work is another. Have you really thought out, week by week or month by month, what you want to achieve with your business? There are countless ways to put together a strategy for your business in this day and age, so there's no excuse to be lazy with it. As stated previously, many start-ups fail within the first six months, and you can guarantee that the ones who make a success of themselves had a well-thought-out business plan. There are many ways to do it – you just have to choose what suits your business and run with it.
As professional speaker and business coach Ian Dickson states, “Sometimes a single sheet of A4 might be enough to plan your business out over the next month, quarter or even year. But a plan for your bank manager or potential investors will likely need to be more structured and detailed.
“Bottom line – if you are planning to have a successful business you need to generate some sort of plan as to HOW you will achieve that success. This gives you a clear route and end destination on paper that you and your team can follow. Without getting into clichés – if you fail to plan in business you are planning to fail.”
What about your logo and other promotional material?
To have a business idea that is fresh and exciting but then give it a poor logo and little promo would be a serious waste of your efforts, so once your initial concept is final, you need to work on the branding aspect of your project. Consider what you want your company to be perceived as. Make it memorable and insightful or people won’t give it a second look, no matter how fantastic your product is.
According to Diamond Press and Design, a leading business print and design company based in Middlesbrough, “One of the major components of your brand is your logo. Think of how we instantly recognise the golden arches of McDonalds or the simple, but powerful eagle of the USPS. As the ‘face’ of a company, logo design is critical because that simple graphic will be on every piece of correspondence and advertising. A professional logo design is simple enough to be memorable, but powerful enough to give the desired impression of your company.
“Furthermore, a professional appearance builds credibility and trust. People are more likely to purchase from a business that appears polished and legitimate. Emotional reactions are hardwired into our brains, and those reactions are very real influencers.”
Enjoyed your first dose of pointers for starting up a business? Keep your eyes peeled, because the second instalment will be with you on the Surge blog soon!