There is a lot that can go wrong when setting up your own business, hence why it is probably one of the most challenging tasks. In the private sector in the UK, there were 5.9 million businesses at the start of 2019. Over 5.8 million of these were small businesses of up to 49 employees. This is a 3.5 per cent increase on the previous year which shows more people are deciding to start their own business.
Unfortunately, approximately 20 per cent of start-up businesses fail in their first year, with half succumbing to failure within five years. Preparation and meticulous planning are crucial if you want your business to have a chance of success. So, what should you be thinking about when setting up a new business?
How much energy you will use in your business? Do you know the type of energy best suited to your business at cost level? Natural gas and LNG are quickly becoming popular choices. This way businesses are also being conscious about harming the environment too. In 2018, 31 per cent of businesses used natural gas — four per cent up on the previous year — with many switching from oil to gas.
Be careful when choosing your energy supply as your costs can soar if you choose the wrong supply. The Big Six energy suppliers are starting to lose their grip on the UK energy market, so make sure you shop around and choose a deal which will most benefit you.
Location is extremely important when setting up your own business. Have you thought about all the logistics and key factors? Often, people will choose a handy location for commuting which comes at a low cost. However, this doesn’t necessarily mean it’s the best fit for your business.
Who will the main users of your services be? Will most of your footfall require walk-in traffic or a more professional set-up to meet clients? Even the best managed businesses can fall by the wayside because of poor location. Other factors you should consider before signing on the dotted line for a lease include:
- Previous receptiveness to a new business within the location
- Location of competitors
- Local incentive programs for start-ups
Insurance is essential when starting your own business. Even if you plan on going it alone and being self-employed, you must have the relevant insurance or you could find yourself failing before you even start!
However, this doesn’t mean you need business insurance – this depends on your particular business. However, employers’ liability cover is mandatory in the UK. It’s important you do your research into your insurance policies to make sure you are fully covered in all the relevant areas. But, like your energy supply, make sure you shop around to get the best price and option for your business.
One method to ensure your business is successful is to have a strong online presence. In 2018, only 60 per cent of UK businesses were using social media for brand awareness, with this figure slightly dropping when looking at small businesses. This means that they are missing out on potential interaction that can in turn lead to a conversion. Research has found that 39 per cent of social media users learn about products and brands on this platform. Also, 77 per cent of us feel an increased feeling of brand positivity when a business personally responds to a social comment.
If you don’t have a strong online presence when starting your own business, you could be alienating a whole sector of potential clients and consumers. It’s a cost-effective method to market your business and improve brand loyalty from the offset.
Not using social media will also look unprofessional. This will ultimately lead to not reaching your potential. Ensure you do your market research and utilise the platforms most suited to your venture.
You will most likely be hiring a team of employees — or even just a sole member of staff — therefore it’s important to brush up on your managerial skills. You may think you know exactly how to deal with people, but often this isn’t the case. Studies have found that half of the UK’s workers quit due to poor management. Worryingly, nearly one in five of us claim to lack trust in their boss, while 28 per cent believe their line manager is their ‘work enemy’.
Make sure you have good management tactics as this can help you build a strong workforce and build foundations to a successful team immediately. Good team management will spot any weak areas and quickly resolve them. It will also ensure employees feel involved and respected. Before you start your company, why not look into techniques that can benefit you going forward?
Finally, setting up a new business is never going to be easy and there are bound to be bumps in the road. Following these five steps and ensuring you have this covered is a great way to give you a push to success. Of course, there are a lot more factors need addressing, so be sure to fully prepare. After all, if you fail to prepare you should prepare to fail!