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Five tips for starting a new business

Setting up your own small business can be exciting, challenging and ultimately rewarding. Make sure that your commercial venture achieves the success it really deserves by laying down the right groundwork.

Starting out

It’s easy to get carried away with a great idea and rush into establishing a business without assessing the practicalities. Before you even think about applying for finance, make sure you have a good business plan and a clear mental grasp on the reasons you’re branching out alone. Don’t be tempted to kid yourself when it comes to your motivations or your skills – in the long term, it pays to be practical.

Do your research

The first step in establishing a successful business is research. Look closely at your competitors and the market you intend to aim your product at – is there a space for your services? On the financial side, it’s also worth researching any state grants or funding that might be available to you.

Take advice

Don’t be afraid to ask for professional advice, particularly when it comes to finance. It’s also a good idea to seek the guidance of your accountant on the correct structure for your business.


Align your finances

One of the key points when it comes to the future success of your business is the state of your finances. If you have a solid business plan then it may be possible to borrow what you need to start up, but it’s generally best to invest an initial lump sum of your own. Most people save for many years before thinking about starting a commercial enterprise – if this is a route that you want to take, make sure you start your savings in a tax-free ISA such as Legal & General’s Index Tracking ISA to maximize the interest earned. If you require further funding from a bank or a loan company, ensure that you have a sound, well thought out business plan to support your ideas.

Prepare for the worst

While the hope is that your business idea will ultimately be successful, it’s worth erring on the side of caution when making commercial projections. Consider what might happen if you become ill, or if the product you’re selling doesn’t take off. Do you need to take out life cover or key person insurance? Consider all possible scenarios before establishing your business, and you’ll be well-placed to weather the bad times.

Hello

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1. Assess your financial health. Before you can set goals for the new year, it is useful to understand how your business fared in 2009. We all know our bottom line numbers, but how did you get there? What’s your ideal income stream (types of projects, mix of clients, and so forth), and did you achieve it? If not, why not?
2. Review your current client list. You know who they are, but do you like them? I’m lucky enough to work with clients I like–or maybe it’s because I’m unwilling to deal with the ones whose business practices don’t mesh with my own.
3. Develop a 2010 strategy. Once you have a picture of how your business fared last year and why, it’s time to set goals for 2010. Even if everything is going well, “keep doing what I’m doing” isn’t a good goal because it neither defines what you’re doing or why it’s working.
4. Reconnect with contacts. The new year is also a great time to reconnect with friends, business acquaintances, and other people in your business card stack, LinkedIn network, and Outlook or gmail contacts list. If you’ve followed my earlier advice, then you’re already top of mind; now it’s time to follow up.
5. Implement your plan. This seems obvious, but it’s also the hard part. The business of running a business is hard work, but hopefully these five steps will put you on the path to 2010 success.

Five tips for starting a new business

Setting up your own small business can be exciting, challenging and ultimately rewarding. Make sure that your commercial venture achieves the success it really deserves by laying down the right groundwork.

Starting out

It’s easy to get carried away with a great idea and rush into establishing a business without assessing the practicalities. Before you even think about applying for finance, make sure you have a good business plan and a clear mental grasp on the reasons you’re branching out alone. Don’t be tempted to kid yourself when it comes to your motivations or your skills – in the long term, it pays to be practical.

Do your research

The first step in establishing a successful business is research. Look closely at your competitors and the market you intend to aim your product at – is there a space for your services? On the financial side, it’s also worth researching any state grants or funding that might be available to you.

Take advice

Don’t be afraid to ask for professional advice, particularly when it comes to finance. It’s also a good idea to seek the guidance of your accountant on the correct structure for your business.


Align your finances

One of the key points when it comes to the future success of your business is the state of your finances. If you have a solid business plan then it may be possible to borrow what you need to start up, but it’s generally best to invest an initial lump sum of your own. Most people save for many years before thinking about starting a commercial enterprise – if this is a route that you want to take, make sure you start your savings in a tax-free ISA such as Legal & General’s Index Tracking ISA to maximise the interest earned*. If you require further funding from a bank or a loan company, ensure that you have a sound, well thought out business plan to support your ideas.

Prepare for the worst

While the hope is that your business idea will ultimately be successful, it’s worth erring on the side of caution when making commercial projections. Consider what might happen if you become ill, or if the product you’re selling doesn’t take off. Do you need to take out life cover or key person insurance? Consider all possible scenarios before establishing your business, and you’ll be well-placed to weather the bad times.