Setting up a new business
There might be many different reasons for wanting to start your own business and to be your own boss. However, if you are thinking about setting up your own business there are a few practical things that you should consider first.
Market and product or service – make sure that you have done some research and are confident that you have the right product or service and a suitable market to sell this into. There is no point selling ice to Eskimos but they might like a fur lined coat! Silly example I know but hopefully it emphasises the importance of thinking carefully about your product or service before you launch your business.
Pricing – it is important that you understand how much it is going to cost to produce your product or provide your services and what is an appropriate selling price. You need to ensure that you have a large enough margin to ensure that your business is profitable and that it will provide you with a decent living. Putting together a budget and cashflow at this stage will save you a lot of heartache later if it becomes apparent from this exercise that you will not be able to pay yourself a wage. I would always suggest that you show this to someone first just to make sure that you haven’t missed any expenses which could radically alter your decision.
Initial Funding – make sure that you have thought about how you are going to fund your business. It is unlikely that your business will be profitable immediately so you need to have a plan in place. Are you going to borrow from friends and family or are you going to talk to your bank for some funding? Having a budget and cashflow in place is essential if this is your planned route. Nowadays there are more options available such as crowdfunding, but you will still need to have a plan in place.
Recording system – you will need to ensure that you have some form of recording system in place to record all of your income and an Excel spreadsheet is perfect in the beginning but if you anticipate lots of transactions then an online accounts package such as Xero is a good idea. A lot of businesses fail in the first couple of years because they have not recorded everything in a timely manner and so have not been in control of their finances. Xero is fantastic as it integrates directly with your bank account and allows you to raise and email invoices directly. It also connects to many other systems in the marketplace such as Paypal, all of which helps you monitor and control your cash.
Advisors – setting up your own business can be scary, but it is also exciting and with the right advisors on your side there should be nothing to stop you from living your dreams. It is also important to think about your own skill set and what you are good at and also like doing and to build a team around you that brings a range of other skills together.
Marketing and publicity – once you are ready then make the most of all of the different opportunities there are to reach your target customers and to tell them about your products or services. From social media, to websites, advertising and PR campaigns this can be done to suit a range of budgets but it is vital to help create awareness and a demand from customers.
If you have recently set up or are planning to set up a new business and would like advice there are a range of services which we provide at Kreston Reeves to help you achieve your business goals. Contact Alison Jones, Partner, to discuss further.
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