If you are an aspiring entrepreneur you may be wondering if the new government initiative which has been widely promoted this week is for you. You may be considering whether the loan system is just what you need to begin to build your dream. Although the start-up loan scheme may not be for everyone, it may just be the break you have been waiting for. Mentors are going to be appointed and help will be at hand we are assured, which is a great thing, because if you’ve never started up a business you are going to make some mistakes. Being mentored through the process will save endless time and cash, so make sure you get the right one.
If you are thinking about starting up a business, you can get a head start by giving some serious thought to what is involved right now. I offer some introductory advice which might help you to formulate some questions for your mentor to help you decide if and how to get started.
Before you enter the process:
- If you have previously been employed, or have just come out of full time education; working for yourself can seem lonely. You need to have determination and self-belief at the outset and the ability to acquire resilience and the right personal qualities. It is not for the faint-hearted. Don’t let fear stop you however, if you’ve a great idea, with willingness, your personal qualities will develop as you grow your business.
- Gather all relevant information so you understand the implications before you invest any money or effort.
- Check you have industry level qualifications and experience relevant to your target market
- Look at competitor websites and publicity information to see how they advertise their credentials for what you want to sell or deliver.
- Develop your unique selling point, have some clear ideas about what will set you apart from the rest and be clear about your niche market.
- More details will follow I believe about the process and how to access a mentor. There are currently well established mentor networks which you will no doubt be signposted to. In the meantime, your local business enterprise organisations can help you discuss your intended new business start-up and give you expert advice.
- Work with a mentor who understands your industry/sector. There are many great business people from most industries who love to share what they know. When selecting a mentor, don’t be afraid to ask some basic questions to get the right one.
- You can be thinking about what you might use your loan funding for, as well as any other capital you may have to invest. Have a realistic idea about how much help you need and how much it might cost. Make some initial enquiries and then prioritise when planning to use your loan and or capital.
Once you’ve entered the process:
How will you promote your business?
- Consider your brand. It’s competitive out there and great branding can set you apart. Your branding should clarify your unique selling point and appeal to your niche market. A good brand can include a logo and how you design your publicity material. You need to consider protecting your brand or product, by patenting or trademark.
- Before you get started with a website consider exactly what the function of your website is. You need to be clear about the purpose before you go to any expense. Get some expert advice from more than one website designer, and be clear about the purpose and design needs so it is accessible and useful for your customers.
- When choosing your web designer, be clear about how fixed or fluid you want your website to be. How often will it be updated and will you do this, or will you be paying them to do this on an on-going basis?
- Understand on-going maintenance and hosting costs
- If you haven’t any marketing experience then your mentor should be able to point you to some local firms which might give some initial free or low cost advice to get you started. You will need a good feel for how much your start up marketing costs might be, and any on-going costs. Remember, the money you invest in marketing should be giving you a demonstrable return on investment, so get some evidence about effectiveness before you pay hundreds of £s to place that advert.
Understand how widely you will need to network
- There are many business networking groups based regionally. Networks can be great resources, offering news, learning and training events for members. These can help keep you up to date and current on many subjects. Some of these are free resources and some are subscription based.
- Do your homework before joining and make sure that the network group is right for your kind of business before committing to subscription based networks
- Get your social media networking right and if you aren’t already expert at this take advantage of one of the many courses out there. Online communities are growing especially on social networking sites like Facebook, Linked in and Twitter. At the very least sign up with these. But do not limit your online social media with just these three, there are many more. Much depends on how much time you have to develop relationships. Also search to find and join industry specific groups.
Consider where you might be located
- Get your location right. You may need premises, a virtual office or work from home. To be effective you may want to use a combination of these. You need to think not only about the cost of hiring any premises, but also insurance costs while you are using the premises. You also need to make sure that if you work from home, your home insurance covers you.
- If you work from home and wish to meet clients, you need to give some thought and maybe visit some local hotels to see if they have a business area you can use as a virtual office.
- If you work from home, you may wish to consider hiring a PO Box or linking with a local enterprise centre who can offer virtual office facilities.
Understand the legal and financial issues
- Don’t underestimate your initial investment and funding. You will need to provide set up costs and some on-going costs until your business begins bringing in customers. Most of the suggestions included in this article will have a cost attached to it, and you need to understand those costs before you start off.
- Understand how your business is to be structured. HMRC have a number of publications which can help you understand your anticipated tax liabilities. Book a free tax surgery with a local accountant
- If your new business start=up involves taking on employees, then make sure you get the right advice and understand what your legal responsibilities are. A good HR firm can give you expert advice and guidance at a relatively low price. ACAS also gives free advice and guidance with some great publications about employers’ responsibilities.
- You will need a business bank account, and appropriate business insurance. Some websites offer a wizard to work through so you can determine the type and level of insurance you need.
- Most banks offer free banking for the first year for new business start-up. There will be a monthly charge, but transactions are not billed. Banks offer a range of services included in their business bank account provision. Use a comparison website, or do your research to see which one will be best for you.
- Business insurance is not a one size fits all and you need to make sure your insurance is customised and contains all the elements you need. Use a good comparison site to help you work through the maze of what’s on offer. Industry specific insurance is usually more competitive and can provide details which more general insurance companies miss. This should be your first search.
- If your business will involve submitting tenders for contracts there will undoubtedly be insurance requirements. If this is over and above your regular insurance specification then make sure you cost this in.
You can find all the latest information about start-up loans at http://www.bis.gov.uk/news/topstories/2012/May/startup-loans
I hope you found these start-thinking tips useful. There is lots of great information out there, so do your homework and good luck with your venture!
Christina Lattimer is the owner of People Discovery, a Leadership, Management and Engagement consultancy. You can visit her site here. www.peoplediscovery.co.uk. Christina is a registered mentor with the Institute of Enterprise and Entrepreneurs.