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5 essential tips for starting a successful new business

2nd May 2014 Print

Starting something from nothing is never an easy task.  You might have a Big Idea but no business experience.  You might have a master plan but no financial backing.  It's essential to seek advice, gather feedback and set up some security for your new business. Our 5-step guide to starting a successful new business will hopefully take you from planning to profits, as you turn your Big Idea into Big Business.

1. Do Your Homework

Leaping into a project without prior research is like flying without a radar.  Research is an essential first step towards understanding your target customers, your competition and your pricing strategy.

Find a few potential customers and talk to them.  Show them your product or discuss your service.  Suggest a price.  Gauge their reactions and take it all on board.  It doesn't matter  whether you're taking a survey of a thousand or interviewing a handful of people, it will all be invaluable information. The knowledge you gain through research could save you thousands of pounds in trial and error further down the line.

2. Draw Up a Solid Business Plan

This crucial step is often overlooked by eager entrepreneurs.  A thorough examination of your business structure and marketing strategy won't just help to highlight any weaknesses in your approach.  It's also an incredibly useful tool for proving to investors that your business model can work. Try and speak to people who started their own businesses to get their advice and feedback on your business plan before you show it to any potential investors. Experience can be invaluable in helping you craft a convincing business plan.

3. Secure Your Funding

Most banks won't consider you for a business loan without a well-prepared business plan.  But banks aren't the only source of funds to consider.  There are Government Schemes to support new enterprises and crowdfunding websites dedicated to getting your project financed. Research all the funding possibilities thoroughly as many people start businesses without realising the wealth of potential help available to them.

4. Establish Yourself

It's important to find out exactly which legal structure is best for your business before you register.  A sole trader pays no corporation tax, but faces higher risk.  A limited company must pay 20% of its profits as corporation tax.  But when disaster strikes, its liability is limited.  Find the right way to register your business before you bite the bullet.

5. Protect Your Future

It's easy to get swept up in the excitement of a venture that hits the ground running.  But even the smallest business with the most simple structure can find itself on hard times when the unexpected happens.  A sensible company insurance policy can protect your revenue, your property, and ultimately, your livelihood.  Don't let all your hard work and planning go to waste. Insurance could be a vital safety net for your business, particularly when you're in the process of establishing your market and building a customer base.