Home Budget 2007 Company Profile Services Accountancy Zone Business Zone Tax Zone IR35 Update News Articles Feedback Search Legal Notice How To Find Us What Business? Either you have a product or service to sell, or an idea for one. Your best placed to know what skills and experience you have that may be attractive to potential customers. You may want to capitalise on the knowledge of a trade gleaned from a previous employment. Perhaps there are aspects of business training received or managerial experience gained that you could pass on to others. Of course, if you couldn't stand your job, you may want to strike out in a completely new direction. For example, there may be a hobby of yours which you could develop into a business opportunities. What about catering, writing, cabinet-making, dressmaking? You'd be surprised how, with the help of good advisors, how many individuals have grown what was once only an enjoyable past-time into a successful business enterprise. You may have an original business idea. Perhaps you have designed a new product that fills a gap in the market which everyone else has failed to notice; or you may have an idea for a service which would improve the workings of some industry. You may want to enter an established trade by operating a franchise or buying into a partnership, or by taking over a going concern. But if the trade is new to you, be careful. Can you cope with learning the complexities of a new business at the same time that you are learning how to run your own one. Considerations The decision of when to start will need to be related to how much money you've got at your disposal. It could be there is a period during which you will be paying all the outgoings, with little or no money coming in, while your own living expenses will still have to be met. Begin by taking stock of your financial resources and assets. Also be aware of your own limitations. Try not to take too much on yourself. It is usually cheaper in the long-run to buy in the help of, for example, a book-keeper to deflect some of the pressure from yourself. After all, you will have enough to worry about trying to get the business off the ground. Capital Unless your chosen venture requires virtually no initial funding you'll almost certainly need to think about how you can fund some of these up-front purchases: Premises - buying, renting or building; Plant and equipment; Goodwill, if taking over an existing business; Office equipment and furniture; Installation of electricity, gas, telephone and any other services; Initial administrative costs, legal and other professional fees; Business stationery; Advertising and publicity costs for the initial launch; Insurance, not only for premises and equipment, but also potentially for public and employers' liability. You should assess the extent of this expenditure as accurately as possible and consider ways of limiting it if necessary. For example, you could lease plant and equipment instead of buying it outright. But don't think merely of the start-up capital required. You'll also need to work out how much money you'll need to keep you going on a day-to-day basis. What we in the trade call working capital. Market Research This isn't as difficult as it first sounds. There is plenty of easily accessible information that may be of use to you. Why not try a business directory first? A quick look through the Yellow Pages will tell you what your up against. Understanding your competition is one of the most important tasks that you face in the early days. If you have nothing new to offer, why will their customers switch to you? Think about your unique qualities. What makes you different or better than the rest? How can you effectively communicate that to potential customers? Remember, you don't have to be world-class right from the start. Being better than the competition will do for the short-term. Remember the story about the two men lost in the jungle who spot a hungry tiger. One man bends down to put on some running shoes. The other man, looking puzzled, says "They won't do you any good - you'll never be able to outrun a tiger." "No," said the other, "but I only have to outrun you!" As long as you can run faster than your competitors, then you won't be eaten! You can also seek advice from any relevant trade organisations. These are listed in the Directory of British Associations which is available in most public libraries. This may also be useful if you are selling to any particular trade or industry. You'll be able to access a list of potential customers! Wherever business studies are taught there will always be the opportunity to consult experts or even to use students to conduct market research on your behalf. Finally, don't forget the power of the internet. An hour spent surfing through relevant web-sites will result in a wealth of useful information. Home Sweet Home If you can, try working from home. Not only can you save money on rent, rates and the utility costs, it also means that you don't have to fight your way through the rush-hour traffic. Be aware, however, that some house deeds prohibit the use of private dwellings for business purposes. Even where no such restrictions exist, it is possible that you may require planning permission from the local authority. To be on the safe side, you should inform the company that is insuring your house. Using it for business, particularly if you are storing any combustible goods, may invalidate the buildings and contents insurance even against totally unrelated disasters, such as a burst water pipe. Of course, there are plenty of small businesses run inconspicuously from home without permission because there is nothing in the work to inconvenience the neighbours or to alert snoopers. It's your choice. If you claim a proportion of the expenses of running your home as a business expense, there is a risk of your having to pay capital gains tax on the same proportion of the gains realised when you eventually sell the house. A small gain may well fall within your exempt allowance for the year in which you sell, but be sure to check the position with us before you blindly claim such expenses. [ Business Zone Home · Previous - Introduction · Next - Preparing A Business Plan ]