In 2016, UK professionals founded 80 startups an hour, setting a new record for the country.
These small businesses range from retail shops to fast-growing tech companies. Despite their varied goals and functions, every founder has one thing in common: the desire to turn their dream into a reality.
These entrepreneurs face immense challenges — and an uphill battle to solidify their new business in a competitive market. The pivotal first year sets a tone for the company. By implementing these actionable tips at the beginning, you set a solid foundation for a growing company:
1. Check Your Motivation
A lot of people think that starting a business is lucrative — and it can be for dedicated, strategic business owners. But if you’re starting a business solely to make money, it might not be the right choice.
Ultimately, business owners work for little pay (in the beginning) and even less acknowledgment. They dedicate their time to developing a thriving company, which takes passion and grit.
These dedicated entrepreneurs outperform their competitors. As Reid Hoffman says, “The person passionate about what he or she is doing will outwork and outlast the guy motivated solely by making money.” In short, make sure you’re intrinsically motivated to succeed with this business idea because it will be a huge part of your life for next few years.
2. Create and Test a Concept
Here’s where the fun begins. If you have an idea for a business, flesh it out. Here are a few questions to get you started:
- What is the purpose of the business?
- Does this fit a service business model or are you selling products?
- What would make it appeal to customers?
- How would it stand out from competitors?
Once you’ve nailed down this idea, consider the target market for this business. For example, let’s say you want to create a small boutique featuring local artisans. Define your ideal customer, their demographics, and their personality traits.
With these details, you can test the plausibility of the business by talking to people who fit the profile of your target customer. Also consider testing the waters by selling your product (or offering your service) on a smaller, limited scale. This bootstrapped approach can help you gauge the strengths and weaknesses of your idea before you invest a ton of money and effort to get it off the ground.
3. Develop a Rock-Solid Business Plan
A business plan connects the dots between your concept and its implementation in the real world. Plus, it’s essential if you apply for a loan or a grant.
The UK Government offers an awesome template for creating a business plan from scratch. Start with your concept, and whittle it down to a two-minute elevator speech. Get comfortable sharing this introduction to your business; it will come in handy when talking to people in your community and pitching the idea to investors or potential co-founders.
This business plan can also become a touch point for you as a business owner. Revisit it often to ensure that you stay align with business goals and fulfill the purpose of the company. If you adjust the business as it grows, make sure to make corresponding changes to the plan.
4. Determine the Ideal Structure
There are a few different ways to set up your company. The vast majority of small businesses function as a sole trader, limited company, or partnership. Register your business with the government under one of these three options:
As a sole trader, your finances and responsibilities are mixed in with the business. You’re responsible for debts and liabilities, as well as accounting.
This approach is the preference of most freelancers and sole proprietors. It separates the business from personal finances — and it means you’re not personally responsible for any professional liability. With this structure, an accountant or bookkeeper can help you manage extra reporting.
If you work with other partners, this option is for you. Creating a partnership means you share accounting responsibilities, debt, and liability. Before formally registering, make sure there’s a clear understanding between all partners about their responsibilities and the shared vision for the business.
5. Fund Your Business
There are a lot of ways to fund a new business. We break down each option, so you can make a fully informed choice about the best direction to take:
Some business owners bootstrap their companies, using their own savings to start a company. The benefit of this approach is that you’re not dependent on anyone else — the drawback is that you’re betting personal savings on your business success.
Traditional Startup Loan
Banks across the UK offer startup loans of varying sizes, over a range of time periods. If you already have a relationship with a bank, ask them about your options. Speak to a local banker about what you need to do to secure a loan.
Awesome platforms like Kickstarter, Indiegogo, Crowdcube, Seedrs, and SyndicateRoom make it easy to get investments from customers — or investors. The booming beer company BrewDog crowdfunds all of their endeavors to great success.
Government Grants & No-Interest Loans
The government and non-profits offer grants and low-interest loans for budding entrepreneurs. Check out Better Business Finance for a comprehensive breakdown of all the grants available to you.
Explore VC Funding
Funding can be hard to come by, but it’s worth exploring. Look for early-stage venture capital firms with an interest in your market. Try to connect with investors through networking events, especially if you’re in the tech space.
6. Read Up on Government Protocol
The UK government upholds clear laws that business owners need to comply with from day one of starting a company. Here are a few topics to cover before you open your doors:
There are a few different kinds of insurance you may need, starting with employers’ liability insurance (which is mandatory). Speak to a local agent about the possibility that you also need to buy motor or equipment insurance.
Businesses are responsible for taxes associated with services and products. Almost all startups benefit from the help of an accountant to figure out tax liability. Ask local business owners for a good recommendation.
Employee Pay and Benefits
Licenses and Permits
If you serve food and beverages, work on public property (parks and streets), or act as a musical venue, you may need additional licenses and permits. Check here for more information.
7. Ask for Help
It takes a lot of helping hands to build a business. Ask people in your network to lend their expertise at each stage of the process. If you have the resources, offer to compensate them — or trade your services for theirs.
At some point in the process, it may make sense to hire an employee. Look for candidates that express interest in seeing the nuts-and-bolts of building a business from scratch.
It’s so important that all your workers are up-to-speed and experienced enough to tackle any challenges before you open the business. Use a scheduling software like When I Work to set up the calendar in advance. After extensive training, conduct a dry run (or two) for family and friends to make sure everyone understands their unique role.
8. Scout Out a Location
Do you need a physical address? If so, work with a real estate agent to let a location that will adapt to your purpose while giving you access to your ideal customers. Think deeply about how you maximize the space, since buying furniture and equipment is a serious investment.
You also need a domain or virtual home for your website. If you haven’t already, use Google Domains to find the ideal URL. Ideally, buy all the most popular endings (“.com,” “.me,” etc.) to keep competitors from using the same domain.
On the other hand, if your first choice is already taken, look for an alternative ending like “.co” or “.biz.” You can also add a local element if you’re a brick-and-mortar business. For example, a bakery named “Rosie’s Cakes” in London could use “rosiescakeslondon.com.”
9. Develop an Awesome Brand
Marketing is as essential to your company as the product or service you sell. Invest in a visual logo and branding that makes you easy to identify and appealing to customers. Even if you have a small budget, try to hire a designer for the initial mockups.
From there, you can build other visuals — fliers, social media graphics, and press releases — through Canva, which is a handy drag-and-drop design software. In the 21-century, a website (and accompanying social media accounts) is a necessity even if you have a brick-and-mortar location. Create an affordable and professional website through Wix or Squarespace.
Reach out to local press ahead of your opening to garner interest. If possible, invite local bloggers and avid Yelp reviewers for an early opening. These influencers can get you extra traction on social media and through in-person referrals.
10. Get Started!
Now, you’re ready to launch! Even if you took years to start your business — and you worked diligently to get every detail in place — there are still going to be issues you need to fix along the way.
Don’t bend to the temptation to be discouraged or overwhelmed. Instead, encourage your staff to adapt to any unexpected hurdles on the fly. By leveraging your creativity and taking a customer-first approach, you can create a dynamic business that grows through challenges. With this perspective, there’s nothing that will stop you from turning your dream into a reality for you, your staff, and your customers.Starting Your Own Business: 10 Tips For Launching in the UK Nick Lucs