The number of business start-ups in the UK is on the rise – in fact the last available statistics reveal that in 2011 alone 500,000 new businesses were set up, and in 2012 the number of UK private sector businesses was higher than at any point in history. This may surprise some, given the pounding that the UK economy is enduring – but in fact, with the government sector shedding jobs and wages and traditional job security feeling considerable strain, we shouldn’t be surprised that more people than ever before are looking to start up their own business.
If you’re thinking about setting up a small business for yourself, here are some major things to consider.
1. What’s Your Idea?
Every small business has to solve a problem, and provide a product or service. If you have skills and experience in a particular field already, you may want to create a business that can leverage them. There may not be a need to re-invent the wheel, and you may have valuable contacts and a rolodex of ready made clients to tap into by staying within your industry of expertise.
2. Obtain A Copyright.
If you believe your idea to be unique, you may wish to get a copyright to protect it. There are several forms of protecting a product or idea – from patents and copyrights to trademarks.
3. Research Your Market.
A common mistake that inexperienced new business owners make is in spending a fortune on an idea they believe has demand – only to find out that it doesn’t. It’s important to research thoroughly before going big – this should involve talking to prospective clients and asking them if your proposed product or service is something they need.
4. Develop, Plan & Test.
Develop a prototype if you’re encouraged by the feedback from your research. Test the product with customers and look to improve on your prototype based on suggestions provided by your first customers.
5. Set-Up Your Business For Larger Scale Production
If your initial prototype sales have done well, and you’re getting positive feedback, you can consider scaling up. There are several things to consider now, such as finding suppliers and trying to negotiate volume discounts to lower your costs. Depending on your product or service and what demand you’re expecting, you may want to hire one or more employees to help you fill your order requirements.
6. Determine The Legal Structure Of Your Business
Once you’re clear your business has a positive future, you’ll need to determine it’s legal structure – the three major forms to choose from are sole trader, limited company and partnership. Each has a unique set of benefits and obligations.
7. Consider How You Will Fuel Growth – Funding Or Organic
While it’s great to grow your business organically, it may take some time before it creaks past break even and generates a profit. Small businesses often need external funding in order to survive and grow. This funding can come from various sources – such as friends and family offering loans, formal bank loans, selling shares in the business, taking advantage of government schemes and even the new peer to peer lending concept where you can borrow money online from people who loan it to you as if they were the bank.