Is 2023 going to be the year you launch your new business? If so, we know it can feel exciting, but also overwhelming!
In our job as business accountants, we get to work with so many great new start-ups every day. We’ve seen many thrive simply because they started with the right approach from day one. So, in this blog we wanted to touch on a few key tips for you and your fledgling business.
1. Start with a plan
One of the key mistakes new businesses owners make is not planning their finances. You don’t need to create a super complex plan, but you do need to understand things like:
- How are you going to fund it?
- How much cash do I have to survive on personally?
- How long can I go before getting paid?
- What happens if it takes longer to get the customers I expected?
- What happens if my customers do not pay me as quickly as I’d hoped?
- How will tax impact on my home finances?
Not sure how to start? First, check out our cashflow blog, which includes a downloadable, (very) simple spreadsheet that you can use to help you plan.
2. Know your offering
Know your product or service before you start. Make sure you clearly understand:
- What you are selling
- How to price it
- The benefits to the customer/client
That final point is a key issue often overlooked by business owners. We’re talking benefits here, not features. For example, why is one big red button on your widget better than six smaller ones? The feature is the button, the benefit is the ease of use.
You need to be able to do the following:
- Explain what you do in a short statement
- If someone asked the question “How much does it cost and can you explain exactly what I will get” – can you answer it easily?
- Consider “Why does the market actually want my product?”
- Explain what is different about your offering
Having asked many of our new business clients these questions, a lack of clarity is very common. This will be a major problem when you are trying to find and communicate your value to potential customers/clients!
3. Decide what you are going to trade ‘as’ (and sort the practical issues)
These days there are a few options for ‘business structures’. For most businesses, it usually comes down to a choice between a limited company or sole trader.
To help with this decision, first check out our blog on why you should set up a limited company (or not).
If you decide to trade as a limited company, see our beginner’s guide on how to set up a Limited Company from scratch.
Whatever way you choose to trade, there will be tax registrations that will need to happen. For more on the practical details (like making sure you can get paid!), check out our useful articles here on our website:
4. Have a solid plan for getting customers
One common misconception we see is new start-ups believing it is easy to get customers or clients. For most businesses, this is simply not true at the start, at least not without massive effort.
Some key truths about getting clients and customers:
- The internet is not (usually) a magic wand for gaining customers, although it is a key part.
- Having the perfect website does not mean people will miraculously do business with you. (If only!)
- Attending a few networking events won’t magically generate customers/clients in a short time frame. (But it will help you connect with other businesses, which is a Very Good Thing in the long run.)
All of the above can and do work, but they take a lot of effort and a lot of time. Time can be a key issue if you don’t have a solid financial plan, as you can run out of cash whilst waiting for clients and customers to start to bite.
Having a firm idea of what you will do with your marketing and sales is very important. You need to factor in time as well as spending on your marketing.
5. Consistency and action are the key
From our experience working with small business, consistency is vital. Whether it’s financial planning or your marketing efforts, the consistency of repeating these key tasks over time is critical to business success.
Some commonly seen ‘fails’:
- Being amazing at planning your finances once at that early stage, but then hardly looking at anything other than your bank balance.
- Sticking out a stock imagine a day on your social media for 2 weeks, not getting much interaction and then quitting as “It’s not working”.
- Not following up with that prospect you spoke to.
In short, show up, do the boring stuff regularly, and our experience says you will have more success.
In order to achieve consistency, you need action. Many people say they are going to start that business, and never put in the action required to turn it into a reality.
So, stop thinking and get going.
Help is at hand
Hopefully all this has given you some food for thought.
For further start up help, subscribe to our YouTube Channel for video content or browse our extensive blog/article library. If you prefer podcasts, great , we have one of these as well right here.
If you prefer in-person help planning those finances or sorting out your business structure, please do get in touch with the team. We offer a paid 1 hour, 1-2-1 consultation if you have a shedload of straightforward questions. You don’t have to become a client, so it’s an easy and hassle-free way to get the help you need, when you need it.