Setting up your own business can be very daunting. Particularly because so much can potentially go wrong. In the private sector in the UK, there were 5.9 million businesses at the start of 2019. Over 5.8 million of these were small businesses of up to 49 employees. This is a 3.5 per cent increase on the previous year which shows more people are deciding to start their own business.
20 per cent of start-up businesses fail in their first year, with half succumbing to failure within five years. Preparation and meticulous planning are crucial if you want your business to have a chance of success. So, what should you be thinking about when setting up a new business?
When starting a new business, you may think you have the perfect location picked out. But have you? Have you thought about all the logistics and key factors? Often, people will choose a handy location for commuting which comes at a low cost. However, this doesn’t necessarily mean it’s the best fit for your business.
Who will be the main users of your services? Will most of your footfall require walk-in traffic or a more professional set-up to meet clients? Even the best managed businesses can fall by the wayside because of poor location. Other factors you should consider before signing on the dotted line for a lease include:
• Previous receptiveness to a new business within the location
• Location of competitors
• Local incentive programs for start-ups
Every business must be insured. Even if you plan on going it alone and being self-employed, you must have the relevant insurance or you could find yourself failing before you even start!
You don’t necessarily need business insurance – this depends on your particular business. However, employers’ liability cover is mandatory in the UK. It’s important you do your research into your insurance policies to make sure you are fully covered in all the relevant areas. But, like your energy supply, make sure you shop around to get the best price and option for your business.
In today’s climate, the internet is one of the most powerful selling tools. In 2018, only 60 per cent of UK businesses were using social media for brand awareness, with this figure slightly dropping when looking at small businesses. This means that they are missing out on potential interaction that can in turn lead to a conversion. Research has found that 39 per cent of social media users learn about products and brands on this platform. Also, 77 per cent of us feel an increased feeling of brand positivity when a business personally responds to a social comment.
Eliminating this interaction from your start-up, could alienate a whole sector of potential clients and consumers. It’s a cost-effective method to market your business and improve brand loyalty from the offset.
By not having a social media presence on platforms your customers use will also look unprofessional. This will ultimately lead to not reaching your potential. Ensure you do your market research and utilise the platforms most suited to your venture.
Most business owners plan to hire a team of employees — or even just a sole member of staff —therefore it’s important to brush up on your managerial skills. You may think you know exactly how to deal with people, but often this isn’t the case. Studies have found that half of the UK’s workers quit due to poor management. Worryingly, nearly one in five of us claim to lack trust in their boss, while 28 per cent believe their line manager is their ‘work enemy’.
By ensuring your management tactics correct straight away can help you build a strong workforce and build foundations to a successful team immediately. Good team management will spot any weak areas and quickly resolve them. It will also ensure employees feel involved and respected. Before you start your company, why not look into techniques that can benefit you going forward?
Are you aware of how much energy you will use with your business? As well as that, do you know the type of energy best suited to your business at cost level? Natural gas is quickly becoming a popular choice. This way businesses are also being conscious about harming the environment too. In 2018, 31 per cent of businesses used natural gas — four per cent up on the previous year — with many switching from oil to gas.
If you choose the wrong energy supply you could see your costs soar. The Big Six energy suppliers are starting to lose their grip on the UK energy market, so make sure you shop around and choose a deal which will most benefit you.
Finally, setting up a new business is never going to be easy and there are bound to be bumps in the road. Following these five steps and ensuring you have this covered is a great way to give you a push to success. Of course, there are a lot more factors need addressing, so be sure to fully prepare. After all, if you fail to prepare you should prepare to fail!