Make sure that you are aware of the reality of running a business.

Running a business does not suit everyone. You need to have a passion for what you are doing, may have to put up with stress, loss of sleep, and lack of money. Sounds great doesn’t it? The upside can be freedom, not having to answer to ‘the boss’, the opportunity to spend your days doing something that you love, to work the hours that you choose, and the possibility of uncapped income. But be warned, IT IS NOT EASY!

It is right that you should approach starting a business with positivity but don’t let this cloud your judgement. There are plenty of benefits but there are real drawbacks too and you should be fully aware of both.

Thankfully, there are no formal qualifications required to run a business and anyone can have a go. The truth is only the most determined and hard working survive. If you love what you are doing or can convert a hobby into a business, you stand a much better chance of success.

Whilst some people start a business to make a fortune, the majority of small business people probably earn less than their employed counterparts. Independence, creating something new, flexible hours, and personal satisfaction are better, long lasting incentives. The desire to make money is not usually enough by itself to get you out of bed on a cold and miserable morning when not everything is going to plan.

Do you have the support of your nearest and dearest? The pressure and responsibility of running your own business can sometimes result in extra stress and having less time for other things. It is best to make sure that your friends and family are 100% behind you before you begin.

Self-employment can provide a realistic alternative career if your circumstances make it difficult to find or hold onto a job. The flexibility makes it possible for anyone to set up on their own. Single parents, people with disabilities, the unemployed and ex-offenders are often able to support themselves without the need for benefits.

It is wise to have a clear and honest understanding of how much you need to earn (after tax) to make sure that you can survive personally. Do not jack in the day job until your business can pay you the same in wages AFTER costs and a fair profit…that could take a while.

The most common pitfalls that you need to avoid are:

Taking advice from the right people will dramatically increase your chances of success. If you only take one thing away from this guide, please can it be that getting a second pair of eyes to review your plan is probably the one single action that will have the most impact on your chances of setting up a sustainable business… as long as the eyes belong to the right person!

Identifying an opportunity or spotting an idea is a great start. However, it is not enough to fall in love with an idea and pursue it. Asking yourself a few simple questions can make the difference between succeeding and failing.

Think very carefully about your strengths and weaknesses and be honest with yourself. You are unlikely to be able to do everything yourself – certainly not effectively. The way to succeed is to do all the bits that you can do well, then either take appropriate action to plug your skills gaps or get help for the rest.

How to give yourself the best possible chance of success.

Deciding what business to set up needs careful thought but you can dramatically increase your chances of success by planning carefully.

Sadly, money rarely comes in or goes out at the most convenient time (for example you may have to pay for your stock before you can sell it). A cash flow forecast will help you work out roughly what you can expect financially in the future – even if some of it will have to be based upon guesswork. This is vital information, particularly if you are planning to borrow money – it is best to plan for the maximum amount that you will need rather than having to keep going back to ask your lender for more.

Your market research should have helped you to identify your target market, where they are located, what their needs are, how they spend their money, and how they find their suppliers. The next step is to make them aware of your business and to encourage them to buy from you.

There are so many ‘opportunities’ to promote your business, you could easily spend every penny you earn on marketing. So, how can you create the maximum impact without breaking the bank?

When deciding where to spend your budget, be very wary of ‘special offers’ and impressive circulation figures – it is better to reach one customer who will buy than 100,000 who don’t!

Word of mouth advertising is probably the best marketing tool in your armoury. A recommendation from a satisfied customer is far more persuasive than any paid advertisement. Harness this secret weapon by asking for referrals and positively encourage your happy clients to tell their friends.

Business structure?

Business name?

Other considerations?

When it comes to deciding the legal structure of your business, you have plenty of choices but which would suit you best?

The most common forms of enterprise structure are:

Sole trader is the term used for a “one-person” business with or without employees. You do not need to register the business, although you do need to notify HMRC to avoid incurring a fine.

You are personally liable for all your business debts; if your business fails, both business and personal assets will be used to pay off the debts.

• The very latest you can register with HMRC is by 5 October after the end of the tax year for which you need to file a tax return.
• You will be issued with a Unique Taxpayer Reference Number (UTR)
• You must submit a self-assessment tax return for each financial year
• The deadline for online filing is January of the following year BUT prepare your end of year accounts MUCH EARLIER!!
• Tax and NI (class 2 and class 4) are payable in the following January (you may also have to pay money on account for the following year)

Sole trader is the term used for a “one-person” business with or without employees. You do not need to register the business although you do need to notify HMRC to avoid incurring a fine.

You are personally liable for all your business debts; if your business fails, both business and personal assets will be used to pay off the debts.

In a limited company, the personal liability of the owners for the debts of the company is limited to the nominal value of their shareholding i.e. other personal assets are not liable. The company is a separate legal entity and therefore, can sue and be sued just like a person.

You are not “self-employed” in a limited company, but employed by the company as a director. The directors as employees, therefore, pay tax under PAYE and National Insurance deducted from their earnings.

There are other types of enterprise structures although they are not as common among start-ups as those already described.

All you need to know about Tax, National Insurance, and VAT.

HMRC will take a keen interest in your venture. Legally, you are obliged to supply them with information that will determine how much tax, National Insurance, and possibly VAT that you will have to pay.

Income tax and national insurance contributions will be payable annually on any profit/income over your personal allowance. Your annual self employment ‘income’ will be total revenue minus expenses So, you must have accurate details of the revenue and the ‘allowable expenses’ to ensure the profit/income calculation is correct.

There are a number of key dates that you must remember, but these vary depending upon the legal status of your business and whether or not you employ staff.

Value Added Tax (VAT) is a tax on certain goods and services supplied in the UK. At the moment, you only have to register for VAT when your ‘taxable turnover’ is more than the current threshold.

For more information visit: gov.uk/vat-registration-thresholds

Also: More information about VAT

Almost everyone who works for a living pays N.I.
It goes toward pensions, benefits and healthcare. Class 2 NICs are payable by anyone who is self-employed.

Keeping track of income and expenditure is vital to the financial health of any business, as is complying with the demands of the revenue!

Careful planning, book-keeping and compiling annual accounts are often best left to someone with the required experience and skills – an accountant or qualified book-keeper.

If you operate a profitable business, a good accountant will save you a lot of aggravation and possibly money too! The tax laws are complex and accountancy fees can sometimes be covered by their knowledge of how to legally minimise the amount of tax that you have to pay.

Making Tax Digital is a key part of the government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs.
As a result, small businesses are increasingly looking to cloud-based accounting solutions to manage their bookkeeping, payroll, statutory accounts and annual tax returns.

Learn more online at: Cloud Accounting Options For Small Business

Find, win and retain customers – your business lifeblood!

Marketing should be more than just having some business cards printed, building a website, or putting an ad in the local paper and waiting for the customers to come flooding in. Preparing a marketing strategy will help you think about where your business will fit into the market and how to get it there. It is no good creating a fantastic product or service if nobody knows about it.

Before you can begin to sell your product or service to anyone else, you have to know how it can stand out from the crowd. This is especially important when your product or service is similar to those around you.

Very few businesses are truly unique, so the key to effective marketing is what advertising and marketing professionals call a “unique selling proposition” (USP). This is the factor that makes your business different from your competitors.

As they say, “you don’t get a second chance to make a first impression”. For many of your clients, the first time they encounter your business will be online, via a letter, flyer or advertisement. It is vital to make sure that your message is as strong as if you were there in person. 

A great starting point is to think about branding your business. If you think only big corporate names need to think about their brand identity, think again. Branding is all about the simple things like logo, consistent colours, fonts, style, and image. That’s as true for a one person home-based business as it is for a multi-national conglomerate. 

At the very least, you will have to consider ordering stationery (letterheads and business cards) that portrays your business professionally. It may be tempting to print something off at home on your computer, which may save you a few pounds, but it could cost you much more in lost business. 

There are so many different ways to try and attract the attention of your potential customers our challenge/goal is to decide which marketing channels will be most cost-effective and to make those work well. 

You could spend every penny of your income (and more) on marketing but knowing where to get the best results is a bit of an art. Check out our step-by-step guide to thinking about and writing an effective marketing plan. 

Whether you like the thought or not, the having ability to sell will prove to be a distinct advantage. However, this does not mean that you have to become hard or pushy – in fact the best salespeople are often the complete opposite.
Selling is the art of finding out what a customer needs and satisfying those needs with the benefits of your product or service – not forcing something on them that they do not want or need.

Business Networking is a great way to make new friends and business contacts. We would strongly recommend that you consider adding networking to your marketing strategy. Not only does it widen your circle of business contacts, but it can also keep you in touch with what is going on in the local business world, and potentially bring in more trade! 

An elevator pitch is a brief, persuasive speech that you use to spark interest in what you or your business does, a useful tool, particularly if you plan to go networking.
A good elevator pitch should last no longer than a short elevator (lift!) ride of up to a minute, hence the name. They should be interesting, memorable, and succinct. They need to explain what makes you – or your organisation, product, or idea – unique. 

Effective use of PR can provide a strong way to get your business known. You will have to work extra hard to create a buzz, as only the most interesting stories will get you the free publicity that you crave.
(Many publications now insist that you advertise with them before giving you ‘free’ editorial – even more reason to make sure that your story is genuinely ‘news-worthy’). 

Finding new customers can be extremely expensive, so treat your current customers well and they will keep coming back to you. 

Word of mouth advertising is probably the cheapest and most effective marketing tool in your armoury. A recommendation from a satisfied customer is far more persuasive than any paid advertisement. Harness this secret weapon by asking for referrals and positively encourage your happy clients to tell their friends. 

Make the ‘web’ and social media work for your business.

It can’t be clearer than this – EVERY NEW BUSINESS SHOULD BE ON THE WEB!
If you aren’t, your competitors certainly will be, as will your potential customers. The real challenge though is to make sure that they can find you when they are looking.

If you are in a Town Centre, consider this is your second shop window, surely you can’t afford not to have too many windows to sell to customers?

If you’re serious about promoting your business, then a good website is your virtual shop window, enticing potential customers, instilling confidence in you and the goods and services you offer. So if you cut corners and don’t have a website, you could be doing your business more harm than good! 

Your website may be as simple as letting people know your phone number and opening hours – a digital business card or as complex as a fully automated booking system or an eCommerce store that runs even when you are asleep.

Can they really design a site that will put you above your competitors? Will they be around to support the site if errors appear? It can seem like a saving but it could have serious consequences to your business. 

These are your options 

This means encouraging search engines, like Google to move you up the search engine results page rankings. The practice is commonly known as Search Engine Optimisation or SEO. Your website content is crawled by search engine robots, or crawlers, to collate the data and index it in search engine archives.

Then, when a relevant search term is used, Google will return your site as a result. The ranking determines how relevant your site is to a user’s search term, so effective SEO is essential if you want to generate more business online. 

A domain name is the name of your website or your website address. It’s the place where users will find you on the Internet and it’s unique to you or your business. Each domain name is made up of two parts. For example, our own domain name is syob.net, the first part is the name we chose ‘syob’ (the initials of ‘Start Your Own Business’ and the second part is the extension ‘.net’. 

Web hosts are companies that rent out space on a web server (big computer!) to host (give ‘webspace’ to) websites on the internet.

Once the hosting company hosts your website, users can access it by typing in your web address (domain name) in their web browser. When they do this, their computer connects to the server and shows it on their screen.

Social media is the social interaction among people in which they create, share or exchange information and ideas in virtual communities and networks. In simple English, it is lots of different sites that allow you to spread the word online. 

Do you know that by just having a Social Media account, and if possible a website too, a physical street based business will have a positive pond ripple effect on their town for attracting more footfall? By using Social Media to promote your services and products, you are inviting customers to come and visit. After they visit you they may pop in next door to see them too, and then their neighbours, maybe have some lunch in an independent coffee shop, use public transport…

What are the benefits? 

There are now hundreds of social media ‘channels’ but which ones are the most important? Here are the estimated number of monthly visitors for some of the top sites:
Facebook – 2.2 billion, YouTube – 1.8 billion, Twitter – 645 million, Instagram – 300 million and LinkedIn – 200 million

The key implications of taking on employees.

Recruiting staff is a major commitment and should be approached with caution. Whilst it is often a vital step if a business is to grow, it also brings with it financial and legal implications. 

Before taking on the responsibility of employing a new team member, please consider whether this commitment is really necessary. Can the task be outsourced or undertaken by a sub-contractor? 

The key thing and first step is to identify exactly what type of person is needed for the job. The next step is interviewing effectively. Various techniques and approaches significantly increase the interviewer’s understanding of the candidate’s personal qualities, motivation and skills and chances of successfully determining how they will perform. 

As soon as a member of staff begins work, they are entitled to certain statutory rights. These relate to health & safety, terms and conditions of employment, equal opportunities, pay and more. You must: 

See The ACAS website for full details. 

Government Sites

Get help and support for your business – gov.uk/business-support-helpline

You can get advice and financial help from government-backed schemes.
Enter your details and select the type of support you need.

Tel: 0300 456 3565/0191 581 0052.

Working for yourself
Self-employment (detailed) 
Set up as self-employed (a ‘sole trader’): step by step
Set up a business
Starting a company: detailed information
Employing staff for the first time
Set up a limited company
Set up a business partnership
Running a business from home
HMRC
Companies House – Find company information.
Health and Safety Executive – Regulation and enforcement of workplace health, safety and welfare.
Intellectual Property Office –  Intellectual property & trademarks. 

Federation of Small Businesses  – The FSB is the UK’s largest campaigning pressure group promoting and protecting the interests of the self-employed and small firms. 

Enterprise Nation  – Enterprise Nation has helped thousands of people start and grow their own successful business. 

Forum of Private Business – FPB offers tailored legal cover, and helps you to stay up to date with ever-changing regulations, make savings and give you a voice. 

Institute of Enterprise and Entrepreneurs  – The IOEE is for anyone who is thinking about starting or already running their own business, those who support them and entrepreneurial businesses. 

Start-Up Loans – A government funded scheme to provide advice, loans and mentoring to start-up and early stage businesses (up to 24 months).

Association of Business Mentors – An independent, not-for-profit body for Enterprise and Business Mentors. 

4Networking – Relaxed, fun and friendly business networking. Network locally, regionally and even nationally. 50,000+ members online. 

BNI – BNI have over 13,000 members in the UK and Ireland alone, passing nearly 680,000 referrals worth over £409 million every year! 

British Chambers of Commerce – The British Chambers of Commerce (BCC) is an independent business network with accredited chambers in every nation and region of the UK. 

Find Networking Events – The UK’s number one resource for information on Business Networking Events, Workshops, Seminars and Business Shows. 

ByteStart – First established in 2004, ByteStart is now one of the most popular small business information sites in the UK. Independently run, ByteStart provides no-nonsense guides and help for start-ups and small businesses. 

Entrepreneurial-Spark – Aims to develop entrepreneurs who have a #GoDo attitude with a solid grasp of how to create value…which makes them investable. With mentors, ambassadors and supporters, workshops, pitch practice and a full time ‘entrepreneurial enabler’ the focus is on the individual. 

SmallBusiness.co.uk  – Provides useful resources, products and services for small business owners and start-ups. Free online advice, news articles, guides, tips that can point you in the right direction to start your own small business. 

Startacus  – The go-to space for start-ups, entrepreneurs & self-starters! List your start-up, connect with entrepreneurs, be informed and inspired by a range of articles. 

StartUp Britain  – A campaign by entrepreneurs, for entrepreneurs. They offer inspiration, resources and guidance to help people start and grow their own business. 

Start Up Donut  – Aimed at helping businesses to succeed by providing reliable information and resources that can save business owners time and money. 

Startup Grind  – Startup Grind is the largest independent start-up community, educating, inspiring, and connecting founders in over 185 cities. 

Start Your Business  – Our site! Useful information, local contacts and a FREE start-up pack which contains everything that you need to get started. It has been put together to ensure that you do not miss anything important. 

Startups – One of the most comprehensive advice platforms available on the web. Covers everything you need to know to start, buy, run or sell a business. 

Virgin Startup  – Virgin StartUp, with support from the Virgin Group is run on a not for profit basis, so every pound goes towards their commitment to change the prospect of start-ups, for good.