5 things you need to do before starting a business
Thinking about starting your own business? Before you do, consider doing these five things to help set your business up for success.
1. Who is going to buy your product or service?
It might sound obvious, but this is something you want to think about carefully. It's a common mistake to assume everyone will be interested in your product or service, so you need to know who your target market will be. Asking yourself these questions, can help you figure this out:
You're offering a product or service, but you're unlikely to be the only business in the area providing that product or service. So why should customers pick your business instead of your competitors? What is it about your business that is unique? Knowing what sets you apart will help you to focus on what’s important as you further develop the idea for your business.
3. Write a plan
A solid business plan is a key part of starting a business. Set out what you want to achieve and how you're planning to achieve it. Writing your business plan will help ensure you've thought through every aspect of running a business and may also help you identify any potential weak points.
An accounting system is a must for almost all small businesses, and a little extra effort at the start can save you some headaches come tax time. Another key step to take is opening a specific business bank account - it's important to separate your business income and expenses from your personal for:
Better cash flow management
Reconciling your accounts and tax returns
Presenting your business as more professional
5. Pace yourself
Don't try to grow faster than you can handle. Most owners who've spent years in the game agree focusing on growth you can sustain over the long-term is the best way to build your business.
As you expand, you'll face all sorts of challenges and you can burn yourself out trying to move in too many directions. While it's easier said than done, try to factor in regular time off. In the long run, this should help you to maintain your energy and enthusiasm, keep a clear head and generally give yourself your best shot at success.
This page is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and should not be relied on. This information has been prepared without considering your objectives, financial situation or needs. We recommend you seek independent professional advice and contact Inland Revenue before acting on this information.