Home 5 Work & study 5 Go exploring 5 The things you need to know to set up a business
6 minute read
2
views

The things you need to know to set up a business

Curriculum for Life editorial team
Curriculum for Life editorial team
Thinking about setting up your own business but not sure what steps go into it? Read this article to understand the mechanics of setting up and owning your own business.
a group of people a sat at a table planning
a group of people a sat at a table planning

The Reason

The idea of working for yourself can seem very tempting; working the hours when you want, not being accountable to anyone else, taking home the money that you earn, working on something you are passionate about. There are however, many things to consider when deciding whether to start your own business. The below is a broad guide on the things you need to do in order to set up a business, but you should go away and do your own research, and get independent financial advice before making any sort of decision.

The Idea

So you have an idea for a successful business, or you offer a service or trade that you would like to manage as a sole trader, but how do you make sure there is demand for your service before taking the plunge? This is where market research comes in:

  1. Look at the current market, how many competitors offer the same/ a similar service?
  2. Have a strong business idea, what problem are you trying to solve?
  3. Understand your audience, speak to people who might use your service and find out their wants and needs
  4. Test your own ideas and assumptions with your target audience

It is at this point that you need to consider whether your idea is viable, will it give you the income you need? Is there demand for it? If you have not got the answers you think you need, it is at this point where you should consider:

-Doing more market research to solidify your idea

– Changing your idea to meet the needs

-Consider not continuing any further with the idea… and this is ok!

Michael LeBoeuf
Michael LeBoeuf
A satisfied customer is the best business strategy of all

The Plan

A business plan is unbelievably important when starting a business. It describes what your business is, what the objectives are, the strategies you will be implementing including sales and marketing  as well as financial forecasts (how much money you need to start and how much you expect to be making).

You will need a business plan if you want to secure investment or a loan (see further below for more detail on this) but importantly it also a lesson for yourself too. Writing a business plan helps you:

  1. Clarify your idea
  2. Spot any potential problems
  3. Set out goals and ambitions
  4. Measure your progress

Take a look at the Kings Trust website for some business plan templates for you to start with. These might look a bit daunting, but it is important for you to completely understand how your business will function, including how much money it will make, how much money you need to live, and will allow you to see if the idea and plan is viable.

a decorative image of a highrise building

The Legal Stuff

Starting your own business comes with a long list of legalities to get through, and it is important that these are done carefully and with consideration to ensure you are not breaking the law!

The first thing you need to do is think of a name for your business, sounds easy, but this should resonate with your target audience. You then may also want to select a domain name, if you are wishing to have a website for your business. Read this article for more advice.

Then, you need to register your business, within this you need to decide whether you want to operate as a sole trader, limited company, partnership or another legal structure. For support on which legal structure to pick, check out this blog from the .gov.uk website.

You also need to make sure you have the correct type of insurance, licenses and permits, depending on what your business is. To find out more about which businesses need a license and how to get one, check out this page.

The Funding

Business finance options generally fit into three categories:

Grants

A sum of money provided to your business that doesn’t need to be paid back

Loans

A sum of money provided to your business that does need to be paid back, sometimes with interest or other conditions

Investors

Selling a stake of your business for funding

Take a look at the Natwest webpage that goes into more detail about these options and what they include.

The Marketing and Branding

Now is the point where you create an identity for your business. This might include creating logos, websites, a “brand voice” (understanding the best way to communicate with your audience) social media.

Understand how you can promote your business and the networks you should be involved with in order to grow your presence in the space.

This is also the point where you start to build relationships with clients and customers. Reputation is extremely important and so getting positive reviews will help you build trust and relationships with your target audience. If you are able to, get some testimonials or case studies showcasing the positive affect of your business or service which you can then promote wider.

A man staring at a board full of papers and designs

Related

Was this article helpful?
YesNo