How to successfully start up a business
So, you’re thinking about starting up a business? Great! But if you’re entering unknown territory, you’re probably wondering where exactly to start, right?
The truth is, getting a new startup off the ground is no easy feat. It involves a lot of planning, making key financial decisions, completing a series of legal activities and picking partners you can trust. So, as professional accountants in Bolton, we thought we’d guide you through the process whilst answering a few of your burning questions.
What are good start-up businesses?
2020 – not a year many of us wish to repeat. But as the pandemic continues to take its toll on the country in the new year, and we’re all spending more time at home than ever before, now is the ideal time to take pen to paper and get your business ideas written down. You’re bound to have loads of brilliant suggestions.
However, the secret to a successful start-up business is thinking about how you can solve a problem or improve an existing product/idea. Can you offer a more affordable alternative to what is already on the market or build something for the future?
Without a doubt, the best businesses are ones that are a real labour of love. Especially during these difficult economic times, more people than ever before have turned to the things they love and are good at doing, in a bid to make this into a fruitful business.
And right now, the odds are in their favour.
With brick and mortar businesses still struggling due to the pandemic, online start-ups are thriving. Social media is as prevalent now as it ever has been, and individuals have become business savvy, turning to popular social platforms to market their business online at low prices.
Even as restrictions begin to ease throughout 2021, the amount of people still choosing to work from home to nurture their new digital businesses means that there has never been a better time to put your time and effort into your start-up business.
Need a little inspiration? Here, let us help…
7 brilliant start-up business ideas for 2021:
- Personal fitness – if you’re someone that takes an interest in exercise, and enjoy working out, why not start a personal training business from home? You can offer virtual training sessions for clients from your garage gym or workout space and use social media to promote your business.
- Home baking – like many businesses, bakeries have felt the effects of COVID-19 but the demand for baked goods remains high. Which is why many creative entrepreneurs have decided to start a home baking business – creating everything from tiered wedding cakes to brownies and gorgeous cupcakes for all occasions from the comfort (and safety) of their kitchen at home. If you enjoy baking and decorating cakes, why not do the same?
- Consultant – are you passionate about a specific topic? Do you want to share your knowledge with others? A consulting business is ideal. And the best bit is you can start small and hire more consultants as you grow.
- Online teaching – due to the coronavirus, many parents have been home-schooling their kids which has highlighted just how tricky it can be. So, if you’re a qualified teacher and have a specialist subject, why not start up a business and teach students online?
- Courier service – ever considered creating your own courier service? If you’ve got a reliable vehicle and good time management skills, then you’re already halfway there. You may choose to start on your own before hiring drivers to work for you.
- Mobile catering – with lockdown restrictions leaving restaurants with no option but to shut their doors and operate a ‘takeaway-only’ service, there has never been a better time to take your products on the road, selling delicious food and drink to hungry key workers. Plus the overheads and upkeep for a trailer/van are significantly less than owning a restaurant!
- Pet sitting – many Brits have welcomed new furry friends into their homes whilst they are there to look after them. But what happens when normality resumes? Pets are bound to miss their owners when they go back to work and the kids are at school. If you’ve always loved animals, pet sitting is a fantastic idea. You’ll get paid for watching over dogs, cats or other family pets; feeding them, giving them water, playing with them and taking them for walks.
Why do startups fail?
Yes, starting a business from scratch is very exciting but it’s harder than most people think. The harsh reality is that, without effective marketing and a team of passionate professionals who work together in harmony, many new startups fail before they make it to the 5-year mark.
Here we look at the key reasons why startups fail:
- Insufficient funds – even if you have the best business plan, the chances are it will fail without proper cash flow. New startups must have money in the bank in the early days – at least until they can start generating profits.
- Lack of market interest – one of the biggest blunders entrepreneurs make is trying to target every demographic. Once this doesn’t work, they focus on those in the local area which, again, is too broad. Instead of this, it’s worth taking the time to really define your niche (narrowing your options down) to make it easier to market products for the right audience.
- Good idea, bad business – knowing your target audience and what they want is key when starting a business. Too many entrepreneurs go into the market with high hopes, thinking that they have a great product or service, only to learn that there is no market for it. That’s why it pays to do your homework and create a business model that suits your customers’ needs, whilst making it profitable and scalable.
How many business startups fail in the first year?
To be clear, businesses fail for all sorts of reasons. But to fail at the end of year one (or sometimes sooner), it often comes down to inexperience, limited funding, poor planning and research.
According to GOV.UK, less than half of all UK startups makes it beyond 5 years after investing so much hard work and determination. 60% of new businesses will struggle to even last three years and an astonishing 20% of new startups will, sadly, fail within the first 12 months.
But it’s not all bad news and there are plenty of startup success stories. In the UK, a new company is formed every minute and more than 80% will survive their first year in business. Take a look at our blog ‘Starting a new business’ for tips to avoid failure.
How much does it cost to start up a small business?
Before you even launch a new business in the UK, you need to make sure you have enough cash to get it off the ground – otherwise, you’re going to run into financial problems further down the line. Which begs the question, how much does it cost?
Of course, the expense of a new startup business depends on several factors, including your chosen industry, location and venue. Needless to say, an online freelance business will cost you a lot less than opening an office that’s made of bricks and mortar.
On average, UK startups need £5,000 to get up and running but there will be additional expenses within the first year to cover things like registering the business, marketing and branding, professional and recruitment fees, equipment, business premises, office supplies, etc.
How do startups get funding?
Startup funding – sometimes called ‘capital’ – is the money that’s required to get a new business on its feet, turning an initial idea into a prosperous business. There are a number of avenues new startups can go down to get funding, such as:
- Angel investors
- Business grants
- Credit cards
- Friends and family
- Personal savings
Get in touch with our experienced team today
We appreciate that taking the plunge and starting a new business is both daunting and challenging, but it doesn’t have to be.
At Eve Accountants, our experienced business advisors and accountants are always on hand to help new startups and, as part of our free new business support service, we will guide you through the process – one step at a time.
We can help with everything from deciding on the most suitable business structure to understanding financial, accounting and tax obligations, branding and more. Whether you need just a little support in the beginning or weekly meetings to discuss your ideas, bookkeeping, marketing plans and strategies – you name it, our in-house team can help. Why not give us a call on 01204 891136 and take the next step towards starting up your business?