5 things to consider before you set up your new business by Neil Debenham
So, you’ve got a dream company you want to make a reality? You’ve even come up with a catchy name. But like most things in life, there are some more important steps to follow before you can get up and running, writes financial business guru, Neil Debenham.
Do your research
First things first. Do you really know your market? Who is it that is going to buy your products or services? Even if you think your idea is unique, chances are there is someone out there already doing something similar so you’ll want to make sure customers in your area come to you rather than go browsing elsewhere. Think what you can offer that is better or different, e.g more ethical or discounted rates for long-term custom.
To succeed in a new business, you really need to know your industry. You’ll want to dominate your local area. Be sure you know about any local competitors, so do your research down to the nitty gritty… know what they’re selling and who their market is. It’s all about delivering what your customer wants, adds Neil Debenham.
2. Write a business plan
One of the biggest mistakes in setting up a new company is not having a business plan. Ah, I’ll just make one up as I go along, you say, I’ll just see how it goes. Not a good idea.
Business plans can help you to obtain sources of funding, identify costs that may be involved, investments that many need to be made and details regarding your customers, as well as any challenges you may face down the line.
Who was to foresee one of the worst pandemics this country has ever faced, could happen, leaving businesses shut down for months up and down the country. If this was to happen to you, you’d need plans in place for an emergency cash stash, for example.
It doesn’t need to be world-beating, it just needs to cover the main points about your proposed cost or service. If you need a simple guide, The Small Business Administration offers a great template to help you write one from scratch.
3. Market yourself!
There are loads of ways to get your name out there. If you can’t afford to hire a PR team or marketing consultant at first, you’ll need to do it yourself. Check out similar businesses’ facebook pages and check out how they interact with their customers. Do the same. See where your customers exist. Are they insta-kids or are they still lagging behind on Flickr?
Market to them based on their lifestyles, where they go and what they do.
4. Tread carefully with cash
One of the major reasons that new businesses flunk is because they run out of cash. Perhaps you invested your savings, you borrowed to the max or you had to cease trading before and so lending again is proving difficult.
Neil Debenham, who acts as an adviser and troubleshooter to a range of financial businesses, says a cash flow system is crucial from the off. This includes writing invoices on time and keeping track of when they are paid, as well as sending off those late payment reminders. There are dozens of apps such as QuickBooks to help you do this.
5. Tell the tax man
You must not miss out this step. Register your business with HMRC as soon as you can or you might end up with some unplanned-for surprises just when you think you’re coining it in.
Depending on your position in your new company you may have to pay different taxes to if you’re a sole trader, so you’ll need to check out all of the options. You may also need to register to pay VAT, depending on your profit.
You can access several software providers such as FreeAgent, which let you know when tax deadlines are coming, as these can be very costly if missed! If you’re unsure, it’s always worth hiring an accountant, which will prove essential if you’re a limited company.