Starting a business? Here’s what you need to consider…

Last year 608,110 businesses were incorporated according to data from Companies House. This is a year-on-year increase of 26,937 on the 581,173 businesses started in 2014.

However, figures from the Office for National Statistics show that 55% of new businesses fail within 5 years.

In order to avoid becoming part of this statistic, it is important to lay the groundwork before starting off on the path of business ownership and management.

Testing your idea

While you might think that your business idea is uniquely brilliant and a guaranteed success, you may be in a minority of one. Testing your idea before you invest time and money can prevent future frustration, financial losses and failure.

Market research is an effective way to determine whether your idea is viable. Researching the market for the product or service you are looking to provide can usually be done by spending some time online.

There is a plethora of information about most business sectors found on websites of potential competitors, relevant business associations, trade publications and local and national government websites.

In addition to this you may want to spend some time learning about your potential customers, their buying habits, their needs and wants and any gaps in the market. A good starting point is creating customer and sector profiles and working out whether your business can fulfil their needs.

Before starting any research, write a list of questions that need to be answered in order to meet your aims.

An impartial expert can also give you an objective, unbiased response to your research and suggest elements that you may have missed.

We can advise on the financial viability of your new business idea.

Writing a business plan

A good business plan is important if you are looking for funding and support from your bank or external investors.

It can also ensure that you focus on precisely what needs to be done to make your young business a success.

Business plan essentials

  • What the business will do or supply.
  • The structure of the business.
  • How the products or services can be accessed or purchased by customers or clients.
  • Long and short term objectives and financial benchmarks.
  • Timelines to meet your objectives.
  • How you will price the business’ products or services.
  • Customer analysis: who they are, where they live, what they do, whether the product or service is an essential or a luxury, why they should purchase from your business.
  • Competitor analysis: who they are, where they are located, what their pricing is, where they attract their customers from, how they market the company.
  • The location of your business.
  • A marketing plan.
  • Financial forecasts including profit and loss, sales projections and cash-flow.
  • Contingency plans.

Structuring your business…

To continue reading our guide to starting a new business please click here