Starting a new business is a very exciting time – however, it is also very challenging. Luckily there is plenty of help at hand for those who are clever enough to look for it. Did I say clever? Yes, I did, because many entrepreneurs charge headlong into their pet projects without giving due consideration to the resources available to them. While the energy levels for all entrepreneurs tend to be very high, it is important to step back, when appropriate, to ensure that the proper advice is being obtained. For many people, a new business is like a boat sailing in uncharted territory. One can reduce the inherent uncertainty and risk with good advice, appropriate planning and a dollop of experience. The following article contains some advice and recommendations for those starting up in the
Where to Start?
Given that one area of particular interest for us is business planning, it seems like a very good place to start. You must resist all temptation to skip writing a business plan. Preparing a business plan is a vital first step on the journey of all entrepreneurs. Sure, it may seem like a difficult proposition, especially if it’s the first time you have to write a business plan. However, the business planning process will really help you get a feel for the various elements that will determine your success, from cash flow, to sales forecasting to your personnel structure. You skip this critical process at your own peril.
Naturally, we recommend Business Plan Pro 11.0 (RRP £79.99) as the best means available to write a business plan. Business Plan Pro helps you to structure your business plan, is exhaustive (meaning you cover everything) and offers help at every step. Alternative methods include writing the plan yourself, using products such as Microsoft Word and Excel, or paying someone to write it for you. Unfortunately, these other methods either leave you staring at a blank screen, or simply help you avoid thinking through the conceptual and financial issues critical to your business. Whatever method you choose, you will find more information on writing a business plan at our business plan site.
If the industry is relatively new to you, I’d recommend you purchase a Business Information Factsheet or Business Opportunity Profile from Cobweb. These fact sheets will help you understand some of the live issues within your sector. These profiles include options such as ‘How to Start a Coffee Shop’ to ‘How to Start a Recruitment Agency’ and cost about £5.
I cannot stress enough at this point the importance of getting advice. The great thing about starting a business is that there are lots of experts who may be blogging about their experiences or have written about the issues they faced and some of the hurdles they have overcome. Here are some of my personal tips for some key areas in getting started:
Accountant
Speak to an accountant early on in the process. They can help you decide the best legal structure for your business, explain VAT and also advise you on other financial obligations. Aims Accountants are a group of accountants that are scattered around the
Accounts
You must get a grip on finances from day one – don’t assume it can be all outsourced to an accountant or bookkeeper. I would recommend taking a look at products such as Intuit’s QuickBooks or Sage 50 Accounts 2008. The bottom line here is that certain things, such as cash-flow management, are often neglected by entrepreneurs. If you have to pay for things up front and only receive cash 30 days later you will have a potentially crippling financing gap. By ensuring you invoice promptly and manage accounts receivable/ debtors you will be in a better position to ride out any credit problems.
Antivirus Software
All computer users should have an antivirus package in place (at the very least) to protect against viruses, etc. Packages are available online and from stores such as Amazon and PC World. Market leaders include Norton and McAfee, but there are also good, lower-cost alternatives available such as AVG.
Bank Account
You will also need to open a bank account. There are many different banks offering good opening offers for start-ups, so do your research. You can also follow threads on websites such as UK Business Forums or Bytestart to read reviews from current customers. Naturally, it is vital that the bank is competitive and has a good online presence so you can manage your accounts online. While you are researching bank account options, speak to them about other financial services products, such as company credit cards and merchant services (an ability to take credit card payments). Whatever you do, keep business expenses, costs and accounts completely separate from your personal ones.
Business Books
Looking for some books to help get you started? We recommend the Pearson range and also The Essential Business Guide. To avail of discounted copies please go to our business planning resources. Business Plan Pro 11.0 includes Hurdle: The Book on Business Planning by
Business Cards
Business cards can be easily ordered online from the likes of Vista Print. There is no reason not to be creative with the cards to try and help you stand out from the pack. A business card should contain the name of your company and contact information, at the very least, and once you get them printed be sure to carry sufficient quantities with you. The next step is to go networking and to attend events such as Growing your own Business and Business Start-up so as to get your name and your card out there.
Broadband
Fast Internet connectivity is vital for any entrepreneur in the
Data Backup
Given the extent to which your business will probably rely on computers, you should put a data backup system in place. There are two main options: remote backup to an online server, or backing up to an external hard drive. Again, there are pros and cons to both. The cheaper option is probably to buy an external hard drive such as those offered by Maxtor. These come with a USB connection and you simply plug it in and back up the files to it (in essence you are just copying the files to another device). If your business takes online orders or has any significant digital data needs, you will likely want the additional reliability and security of a remote, online automatic backup. There are a myriad of data backup providers out there. It is really a commodity offering, so either get a recommendation from someone or go with a lower cost provider.
Domain Names
A domain name is the name that people type into their Internet browser to get to your site; for example, you would type www.paloalto.co.uk to get to our main business plan site. Having a good domain name is an asset, and ideally it will positively represent your company or product name. After that, it is a case of deciding which countries you want to have websites for. Most
Email for Website
Once you get a website up and running and are receiving traffic to it, you will need to manage email from the ‘Contact us’ page. While it is tempting to route email to an Outlook account on an individual computer, this has many drawbacks: it’s not accessible remotely, you may have uncoordinated customer responses, and what happens if that computer is down for whatever reason? There are a number of new innovative solutions available that enable remote online access. We at
Fax
Harnessing the power of the Internet means you do not have to invest in hardware, such as a fax machine, that you may use infrequently. Don’t waste your money buying a fax. Instead subscribe online to an electronic fax service from the likes of eFax. The number of people sending faxes has declined significantly with the advent of email, but in some professions they remain an invaluable tool. Once you set up, be sure to sign up for the Facsimile Preference Service to ensure you are on the list of those not opting in for unsolicited faxes.
Free Stuff
All start-ups tend to be very careful with finance – after all, there are all these outgoings set against uncertain income. From a provider perspective, new businesses can offer a lifetime of purchasing so they are very attractive as customers. The key with all of this is to assess the nature of the competition in the industry from which you need to source products, and then to see whether the service provider is prepared to offer free trials, etc.
Funding
There are numerous different ways to finance a business. The bottom line here is that you do need to consider which options best suit your needs. You can find a lot more detail regarding the types of financing available by clicking here . There is also a collection of financing PDFs available at BPlans. Finally, as with all larger decisions, it is worth involving a professional such as your accountant when deciding upon the optimal financing arrangement.
Google AdWords
The Google search engine is one of the most powerful ways to market to customers. When users search for products such as ‘Business Plan Pro’ the results contain a mix of ‘organic listings’ and ‘paid for’ listings. Organic listings are simply the list of website links Google decides are important. These cannot be influenced by paying more to Google so as to make you appear at the top of the rankings. Paid for listings are the links that people pay for.The beauty of this setup, from an advertiser’s perspective, is that you only pay for adverts that are clicked on. The Google AdWords system also supplies significant amounts of data, so you can manage budgets, track Return on Ad Spend (ROAS) and so on. Business Plan Pro 11.0 includes a free £30 Google AdWord Voucher to help get you started.
Google Alerts
Once you have identified your main competitors and the main search terms people use to find your goods or services, you should set up alerts. Google Alerts is a free process that emails you alerts when your chosen terms show up. This is a low-cost way to monitor the activities of competitors and competitive providers.
Google Analytics
While Google is best known for its search engine, it has been adding to the breadth of its service offerings over the past few years. With Google Analytics you add some tracking code to your website and this enables you to obtain rich data about the behaviour of users. Marry this to AdWords and you can really get a bird’s-eye view of user behaviour vis-à-vis the effectiveness of your marketing. The best thing is that it is free, although Google does get access to all of your user behaviour data. So if you are concerned about your Internet data you may want to explore paying for a locally installed analytics tool.
Homeworking
Homeworking i.e. working from a home office is an increasingly popular means for people to start businesses in the
Instant Messaging
Along with email, instant messaging (IM) has proven to be one of the most used online applications for Internet users. By opening a messaging account, you are adding an extra communication tool to your portfolio, ensuring you can communicate effectively with colleagues and customers. If you want to offer an IM service to your customers, you can add applications such as LivePerson to your website. If it is just for in-house communication, free products such as Yahoo! Instant Messenger will suffice.
Insurance
It is vital to ensure that you are adequately insured from day one. This is particularly important if there are obvious risk areas, such as public access to premises. In such instances, you will need Public Liability Insurance. It is also worth undertaking a risk assessment to understand where insurance is needed across the business. Obviously, buildings and other assets such as vehicles will need to be insured. If you are providing a service where people will be relying on your advice, you may also need Professional Indemnity Insurance. Thankfully, insurance is pretty competitive so it’s a case of just shopping around.
Legal Structure
The main legal structures in the
Location
With the increase in entrepreneurship, there has been a growth in the facilities available, from offices from the likes of Regus to people working from home offices to short-term lets. It is worth taking some time to work out both your immediate requirements and requirements 6 -12 months down the line. Be prepared to negotiate terms – have a walk around the building and try and assess occupancy levels. Obviously this will give you a feel for your bargaining power. Most office rental options will include phones and Internet, but make sure you have flexibility to leave if it just does not work out. Many providers will be keen to lock you into a 24-month contract with two to three months of rent up front. There has been an increase in hotdesking operations which offer you more flexibility if you are a new business and have yet to generate sufficient sales to suggest that you will have a guaranteed income to support longer term commitments.
Logos and Branding
You will need to design a logo and brand for your company. While the start-up stage is often characterised by expense after expense, it is important not to cut costs with your brand. Assuming you’ll have a website; it is worth getting a designer to create a site brand template and logo to ensure a professional feel. You can see how effective this can be by viewing our business planning
Marketing Plan
Once the business is set up, a key requirement will be the need to market effectively so as to attract customers. A marketing plan will help ensure that focus is on the correct areas and that marketing activities are prioritised. Palo Alto Software produces Marketing Plan Pro, which is ideal for the creation of a marketing plan.
Office Equipment
The cost of equipment has come down a lot in recent years, largely as a result of increased competition but also price transparency. People nowadays would not even think twice about sourcing office equipment from the likes of eBay. Again, it is a matter of personal circumstances. Are you going to be receiving onsite client visits? If yes, then it will be necessary to purchase good quality equipment. If, on the other hand, you are running a website without visitors to your physical location, the aesthetic qualities of the equipment are not as important.
PR
‘Public relations’ is a broad term for activities that help get your name out in the open. It is a vital part of any marketing initiative, and for smaller companies it can be managed in-house. When you finally launch your offering, a press release is issued to draw attention to the offering. These press releases are fairly standard and can be released through websites such as Daryl Wilcox Publishing.
Startup Websites
A number of specialist small-business websites exist in the
Trade Marks
The annoying thing about registering a Trade Mark is that it can be a costly and drawn-out process. Nonetheless, it is important to ensure that the brand name you have chosen is not already in use. One quick way to check is to use Google to see if there are any obvious conflicts that show up. After that it is a case of securing a trade mark for your product within certain geographic areas. Obviously you will also want to ensure that the trade mark is available as a domain name so people can find you. There are numerous companies that can help with Trade Marks including RM Online.
Websites
Practically every business nowadays creates a Web presence to market their wares. It is definitely a highly recommended option regardless of your business. Thankfully, it is a very competitive marketplace so the cost of getting online has come down significantly in recent years. It is worth doing a competitive review to assess the quality of competitor websites. You can then use these to help you map out the sections you require. Once you get a website live, the next challenge is to get traffic to it. This will be one of the key strands of your online marketing activities.
Summary and Conclusion
Starting a new business is a very exciting time. It is not a time to make snap decisions when investing a small amount of time can help ensure you set up on a solid foundation. Thankfully, countless other people have experienced the same feelings you are feeling now, and there are plenty of resources available, if you know where to look.
This guide is designed to help signpost some of the key resources you need to consider to maximise the chance of survival. As you will undoubtedly have heard, the first few years of a new business are the most challenging. While this guide was not designed to be exhaustive, I am hopeful it will have helped in some small way to reduce the challenges you face.
Finally, it is worth noting that the above recommendations are personal and are not based on any commercial relationships. One problem I feel that entrepreneurs in the
{ 1 comment… read it below or add one }
I am trying to produce a business plan for my start up -cash strap business which is just clocking a year, and virtually limping.
I have found information in your web site very usefull and professionally written.
i may have to call you for future assiatance.
my business is a security guarding company, virtually being set up by me with my own limited finances.
i have also taken down the details of David fox accountants.
all the best
felix