You’ll also need the passion and persistence to get it off the ground. And you might need some money to help you with startup costs.
Our step-by-step guide tells you everything you need to know about starting a business from scratch.
STEP 1 : Research the business idea…and yourself
There’s no denying the appeal of being your own boss. Spending every day doing something you love. Choosing a living that suits your lifestyle. But is it really as easy as that? At Transmit Startups, we’ve loaned millions of pounds to thousands of startup businesses so that they can start a business they love. It isn’t easy. But with the right planning and support, we know you can do it. The first step is to understand yourself and your business idea a little better.
Consider the pros and cons of running your own business
There’s a lot to think about before you start a business. And that doesn’t just mean daydreaming about how you’ll spend your earnings. You need to think about practical, financial and personal factors before deciding whether business ownership is the right route for you.
|Freedom: You’re free to follow your personal passions||Benefits: You’ll miss out on some the benefits of being an employee, like statutory sick pay and employers’ pension contributions|
|Autonomy: You get to make all of the decisions||Responsibility: You have to make all of the decisions|
|Money: You’re working to benefit your bank balance, not your boss’s||Hard work: You’ll have to do everything in your business, even the bits you don’t like|
|Flexibility: You’ll be able to choose how, when and where you work…but it might take a while to achieve that dream lifestyle||Hours: It may take a while to achieve your ‘work less, live more’ dream|
|Stress: If you find it stressful working for other people, being your own boss might work for you||Money: Some businesses require considerable financial investment, and you may be liable for any losses|
|Stress: It can be stressful trying to balance the demands of business ownership, like marketing, finance and admin|
EXPLORE THE PRACTICAL, FINANCIAL AND PERSONAL CONSIDERATIONS
- Have you got a great idea for a business? How do you know?
- What do you want your dream business to look like and deliver?
- Do you want to stay small or scale up fast?
- What will your startup costs be and how will you finance them? Can you afford to start a business? Maybe you need a business you can start with no money?
- Do you know how much money you need to make to meet your minimum monthly outgoings? Can you afford to give up your day job yet?
- What sources of business funding are available to you?
- Thinking of making your hobby into a business? Will you still enjoy it when it is your work?
- Do you have the personal qualities – like drive and determination – to see things through?
- If you have a family, are they onboard with your big dream?
USE MARKET RESEARCH TO TEST YOUR CONCEPT
If you’ve considered your options from all angles, and still think that starting a business is right for you, the next step is market research.
Market research helps you to:
- discover the size of the market for your product
- understand the needs and feelings of your target market / ideal customer
- find out what, where and why they buy
- identify what your competitors offer compared to you
- consider the opportunities and threats in your marketing environment
You can use surveys and focus groups, original and existing research, and good old brain power to work out whether your business has strong potential.
Once you’ve explored your appetite for the entrepreneurial life – and the public’s appetite for what you offer – it’s time to start business planning.
Not sure where to start with market research?
We’ve got everything you need to know: from focus groups and online surveys, to competitor analysis and SWOT.
STEP 2 : Create a business plan
WHY WRITE A BUSINESS PLAN?
Writing a business plan lays the foundations of future business success. It doesn’t need to be over-complicated but it does need to be done. A business plan is your opportunity to work out the details of your business and make sure you’ve thought about all the ins and outs.
It is extremely beneficial to your business to write one because:
- it helps you pin down the details of your business and prove it’s viable
- funders will expect to see a business plan if you are applying for a business loan
WHAT DOES A BUSINESS PLAN INCLUDE?
A business plan generally contains the following information:
- Executive summary
- Description of the business
- Market research and sales strategy
- Business structure and staffing
- Description of your operations
- Financial forecast
DOWNLOAD A BUSINESS PLAN TEMPLATE
There’s no need to reinvent the wheel. Download a business plan template to help guide you through the business planning process. You’ll need to think through a lot of details, which may take time and additional research.
DO YOUR SUMS
You might find it relatively easy to describe your business plans and structure. It is the financial forecast that’s going to take the most of your time. It is worth spending time getting this right because, without good potential for profit, you may be barking up the wrong business tree.