Top 5 Tips For Setting Up Your Own Business
Setting up and running a business can be like riding a roller coaster, there will be ups and downs along the way, but in the end you will be glad you took part.
From our many years of experience we have assisted and seen clients grow from very humble beginnings into successful businesses. We have put together our top 5 tips for setting up a business which we hope you find useful, especially if you have a great idea or product that you are thinking of turning into a business.
1. Research and Feasibility Study
Before you invest your hard earned money into any business you will need to research your product and its market. From this research you will develop a feasibility study which will outline the following:
- The Product/Service
- Customer Base
- The Competition
- Pricing Strategy
- Marketing Strategy
The above feasibility study will enable you to determine if you:
a) Have a viable product
b) Have a market that needs or wants your product
c) Can compete in the existing market
d) Can afford to go ahead with your plan
2. Business Plans and Cashflows
Once you have determined that you have a viable product or service, your next step will be to draft up a business plan. It would be advisable to seek professional advice when drafting your business plan as it will be the main document which you will present to potential investors or financial institutions, so you will need it to stand out.
A good business plan will include the following:
This will provide the reader with a summary of the product and should promote the Unique Selling Point (USP)
The background will outline details of your experience to date to provide investors a belief and confidence in both your product and yourself.
This section will outline your strategy to develop your idea/product into a successful business.
Competition, Market & Product
Here you will give the reader a brief outline of the market and where your product will fit into that market. You should also use this section to again promote the USP of your product along with its advantages over the rival products.
A good business plan will include cashflows and financial projections which will outline your projected sales, costs and financial requirements for the first three years. When completing your projections remember to be realistic, wishful thinking can be counterproductive.
Our recent blog on Goal Setting might be of assistance to you as part of the development of your business plan.
3. Financing your New Business
Now that you have completed your business plan, along with your cashflow and financial projections, you will be able to determine at what level your new business will break even and eventually achieve profits.
However, before you do start making profits you are going to require finance to get through the start up phase. Like a majority of people these days you may not have a lot of spare cash lying around but don’t panic as there are plenty of financing options available to you, some of which include:
- Micro Finance
- Enterprise Ireland
- Raising Equity / Private Investors
- Bank Funding
We intent to cover these options in more detail in next week’s blog.
4. What Legal Structure will you take?
There are three main legal structures which you can take when setting up your business. The structure you decide upon will be determined by your attitude to risk. Professional advice from either your accountant or solicitor when you are making a decision on which legal formats you would like to establish, is again advisable. The options available are:
- You make all the decisions
- Your personal assets may be at risk if the business cannot pay its debts
- You have the rewards of retaining all profits.
- Profits are taxed through Income Tax and the Self Assessment System
- You have a partner/partners in the decision making process
- The risks are shared between the partners
- The profits are shared between the partners
- A partnership agreement should be drawn up
- It is a separate legal entity
- The company is owned by the shareholders.
- The shareholders liability is limited to the share capital they have subscribed to.
- The company must submit an Annual Return to the Companies Registration Office each year.
Having a good support team around you is very important, especially if you are the person primarily making the decisions for your business. A good accountant that you can rely on to provide you with objective feedback will provide you with an excellent sounding board.
A professional advisor will advise you on the many aspects of your business such as tax registration, company formation, preparation of your business plan, preparation of financial projections and cashflows, keeping proper books and records etc. You may even outsource your bookkeeping function to your accountant as this will allow you to focus on what you do best……your business.
5. Networking and Marketing
At this point you have your Product, Research, Plan and finances in place, all you need to do now is tell the world about your amazing new product or service.
One of the best, and often free, options are networking events. Attending such events will give you an opportunity to meet like minded people who have experienced the same challenges and obstacles you may be facing. Listening to and taking on board their advice could help you resolve some of your own challenges much more efficiently. The Small Firms Association (SFA) or your local Chamber of Commerce often run very informative and FREE courses for small business owners.
While the above 5 tips will be key when setting up your new business there is one further trait that you will need, commitment! Setting up your own business is a big challenge and not one to be taken lightly. Your business won’t become profitable over night and you will need to make many sacrifices to see your dream become a reality. However, with the right tools, goals, plans, team and support it can happen.
If you have a fantastic business idea or are in the process of preparing your business plan and would like some advice or assistance please do not hesitate to contact a member of our team.