From coming up with that killer business idea right through to forming your company and registering it with Companies House, there’s plenty to think about when you start up a business. Whilst it feels like you’re bursting to just dig your heels in and start, there are a few things you’ll need to have planned out beforehand, to ensure things run as smoothly as possible when it’s time for the word ‘go’.
For instance, are you aware of all the funding options available to you via the government, and other, alternative methods? Do you know which sorts of resources are available to you, particularly when seeking out advice? And where it comes to your business itself, how solid is your idea? Do you have a name yet? Are you going to form as a sole trader or a limited company?
To help prepare you for this year’s Global Entrepreneurship Week (GEW), we’ve laid out the essentials to help give you a crash course in what you need to think about before you take the plunge. After all, having a more solid idea of what you create will only help you get more out of the week’s events.
Coming up with a name
It might seem a vain, trivial thing, but coming up with a name for your project makes it feel more tangible as a venture, and helps to solidify the direction of your ideas. Your business’ name will also reflect its personality, and the product or service it offers. There’s a number of things you’ll need to keep in mind when you come up with options:
- What appeals to your target market?
- Create a connection – make sure your business name doesn’t make people uncomfortable
- Steer clear of ‘clever’ – just because you understand the joke, it doesn’t mean everyone will
- Plan ahead – whether you’re starting off small or local, consider where you want to take your business, and don’t restrict trading to a particular location, or to maintaining a certain size.
- Be web wise – check to ensure the URL for your chosen business name is available – domain names are being used more and more as a means of remembering your company.
- Test and learn – once you have a shortlist of business names, try them out on a few people. As well as friends and family, choose some of the people you think may be customers.
Which type of business do you want to be?
We aren’t talking about industries or sectors here. Most startup businesses in the UK fall into either of the three categories of sole trader, limited company, or business partnership. Whichever you choose will determine how your business is structured, and how responsibility is allocated. Here’s a brief breakdown of the three:
- Sole traders – being a sole trader doesn’t mean other people can’t work within your business. You’ll have sole responsibility for your business and you can keep all of your profits after tax but if things go wrong, you’ll be personally liable for the debts of your business.
- Limited companies – setting up an organisation to run your business, you can still take sole responsibility for your company, but if things go wrong, your personal liability is limited, so you won’t put your personal assets on the line. You can also share the load with other directors. And setting up a limited company is a great way of protecting your business name too.
- Business partnerships – when going into a business partnership, you don’t need to register with Companies House, although you’ll still have to file returns with HMRC. It’s recommended that you see a solicitor to formalise your agreements. Each partner shares responsibility for the business and profits are also shared between the partners.
Writing your business plan
There are plenty of events at GEW this year to help you make headway on this one. However, it’s a good idea to get familiar with what’s required of you before you dive into the deep end. Your business plan will help you get everything straight in your own mind as you go through the process of starting up, and is also a key document you’ll need to put forward when seeking out funding. It’s a way you’ll prove you really mean business.
Your business plan should include:
- What your business is all about
- Market, competitor and customer analysis
- Product/service development
- Organisational structure
- Financial requirements and statements
Financial incentives to start your own business
Securing funding can seem daunting, but it’s important to remember that there are plenty of incentives and initiatives out there designed to help give small businesses a boost. For instance, there is government funding available which works in a three-tier system: local, regional, and national.
Often local councils offer grants to businesses which are seen as serving a particular social need, or ones which have the potential to create sustainable employment. On a larger scale, grant programs like the Regional Growth Fund aid businesses that are seen to be stimulating economic activity in a defined regional area. National grants like the Growth Accelerator Scheme have a focus on growth and capital investment.
The government are not the only ones who make grants available to new businesses. Various trusts, funds and competitions operate independently throughout the UK. Though competition for these grants can be fierce, it is an excellent idea to apply to them as the monetary benefits for your business can be huge.
Your first step should be to thoroughly research what is out there, and find the grants that best apply to your business, as this will give you the greatest chance of success. It often pays to build good relationships with councillors, and prominent community leaders. The best way to hear about local grants is by maintaining this kind of involvement — you’ve got a better chance of gaining support if people already have knowledge of your idea.
The British government have a useful website which lists many of the schemes they offer to entrepreneurs. Alternatively, you can download the small business app which gives practical advice on how and where to find funding.
Once you have found a few schemes worth applying to, you need to tailor the presentation of your business to suit the criteria of each fund. Just about every grant out there has a lengthy application process, however, you can prepare for this. You will have to meet their conditions, and be able to sell your idea in a manner that is appealing to that particular fund. It is crucial that you clearly define what the money will be used for. Don’t rush this process: it could be the difference between success and failure.
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