Having spoken to entrepreneurs, we have highlighted these guiding factors from their experiences, including Graeme Donnelly, a founder of online company formation agent Quality Formations.
Graeme Donnelly is an entrepreneur with multiple businesses, with almost 20 years' experience. He has founded several leading online company formation agencies, which have offices around the UK. Quality Company Formations has worked with Barclays, Lloyds and Namesco.
These factors to consider when starting a small business could help you to eliminate the risks and obstacles you'll face on the journey – take note to help prepare you for success!
Our below guide will give you detailed advice on what to consider when starting a new business. If you're itching to get going, fast, then the best thing you can do is structure your planning as you get ready to launch.
We recommend using the free monday.com project plan template to ensure nothing gets missed. Every step involved in the business planning process – from ideation to strategy, marketing, and financing – can easily be mapped out for you, ready to be filled in with your business must-do's. You can see the template below, or click to try it for yourself by signing up to monday.
We recommend creating an account with monday to use this free template – doing so means you can start your entrepreneurial journey on the right foot.
Are you planning to start a business of your own? Not sure what the road ahead may entail? Well, there are some important factors to bear in mind when launching a business.
1. A great idea
“No business can develop in the absence of a great idea. A great and a practical idea is the only thing on which the development of your business will depend. Moreover, as a lot of companies are involved in the market, you need to have a unique idea that stands out,” says Graeme Donnelly of Quality Formations.
Every year, we research the top industry trends to suggest the best new ideas to start, including the cheapest ideas to get going quickly on a budget. Our 2022 business ideas campaign highlighted 8 key trends that are going to be popular this year:
- New ways of working
- Sustainability
- Finance made easy
- Healthtech
- Wellbeing
- Pet care
- Connecting with customers
- Easing life's hard decisions
2. Funding and budget
“The next important factor that should be considered involves the funding of your business. You need to properly identify the sources through which you will be able to get the funding for your business. Moreover, it is better to have a plan so that the budget of a company can be properly maintained.”
Raising finance is a important part of starting a business – in fact, it's one of the biggest barriers to getting set up. If you're not bootstrapping your business (self-funding), you'll need to find alternative methods of raising capital.
Business loans can be really useful here. Particularly if you're buying big-ticket equipment like a delivery van or an electric massage chair, a small loan can get you up and running much more quickly.
Given current high interest rates, it's a good idea to shop around. Startups' specially-designed online tool is a good way to compare loan provider quotes so you can find the best deal with a realistic and achievable repayment plan.
Startups.co.uk can help your business succeed
At Startups.co.uk, we're here to help small UK businesses to get started, grow and succeed. We have helpful resources for helping new businesses get off the ground – you can use the tool below to get started today.
What Does Your Business Need Help With?Project Planning Creating a Website Getting a Business Loan Business Bank Account
Get StartedOther options include:
- Crowdfunding
- Invoice financing
- Angel investors
- Incubators
Before you engage in any early-stage finance rounds, it's a good idea to download accounting software – a way to manage and keep track of funds, and carry out cost estimations through revenue forecasts.
Get started with accounting software.
Use our smart quote-comparison tool to find the best deal for your business's specific needs.
Compare accounting costs It's 100% free and takes just one minute.
3. What is your business plan?
Most people have heard of business plans through shows like The Apprentice. However, few of us actually know what should go in one.
Graham tells Startups: “No business can develop fully in the absence of a business plan. Writing a business plan can help you determine if your idea is feasible and provide direction. With a business plan, you will be able to know every next step that should be taken.”
Visit our business plan template page to get started.
Competitor analysis is a key aspect of designing a business plan that many entrepreneurs jump straight past. But it can come back to bite you down the road.
As Graham says: “You need to know what your competitors are doing and what their strategies are. With this knowledge, you will be able to take appropriate decisions about your company. It will also help you in developing a much more effective strategy for your business.”
If you're unsure how to carry out competitor analysis, we recommend using project management (PM) software. Some of our top small business PM platforms cost very little and make market analysis simple and easy.
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4. Legal documentation
The next factor that needs to be considered is the completion of legal documents. Registering your business is the first step – the evidence of which is known as business formation documents.
As well as this, you'll most likely need:
- Governing Documents
- Intellectual Property Assignment Agreement
- Nondisclosure Agreements
- Shareholder Agreements and Buy-Sell Clauses
- Employee Contracts
Graham says: “For the sale of some specific products and services, there are some requirements for the preparation of legal documents. Make sure you have already done all the legal documentations for your business.”
5. Passion
It might sound whishy-washy. But being passionate about your business idea is absolutely key if you're going to be working on turning it into a reality for the next 12 months.
“It is one of the most important things that will help you in passing all the challenges and difficulties,” Graham agrees. “There will be a lot of risks and hurdles you will face in this process and the only thing that can save you will be your positive attitude. You will have to work hard to develop a company of your own.”
6. Find the right equipment
Investing in small business software is hugely important for increasing business efficiency. Purchasing it early is a good idea so you can get ahead of what your business goals are.
Here's some of the top software products that SMEs should consider:
Accounting and bookkeeping software – Startups recommends: Quickbooks
As we've touched on, financial tracking and management is particularly crucial for startups. Installing a small business accounting software will make sure you're on top of your finances from the get-go.
Payroll tools – Startups recommends: Iris
Whilst not the most exciting software, small business payroll tools are absolutely fundamental for paying yourself or staff.
Website builders – Startups recommends: Wix
Particularly for today's startups, a website can be the face of your entire business. Decide early on what small business website builder you're going to use, as it will likely have an impact on your next steps.
Ecommerce builders – Startups recommends: Shopify
Online retail has boomed during lockdown. Lots of startups are setting up ecommerce stores – similar to choosing a small business store builder, it's a good idea to get this sorted early.
CRM software – Startups recommends: monday.com
If your business is going to take any form of transaction, we recommend installing a small business CRM (Customer Relationship Management) system as early as possible for a streamlined sales process that can bolster brand loyalty and awareness.
Marketing software – Startups recommends: HubSpot
Brand building is a key priority for those that have just started a business. You need to immediately work on getting your brand name out there and generating customers – for which we recommend HubSpot.
7. Know when you need help
“The development of a business is not a matter of seconds, it will involve a lot of time that is spent with hard work,” Graham counsels. “However, in this process, you will be needing the help of some experts. Make sure you already have an adviser who can provide you with the best advice at the hour of need.”
One of the most common pieces of feedback we hear from startup owners is that starting a business is a lonely journey.
Mentors and community groups can provide important guidance and experience on the industry. They also might help you to avoid costly mistakes, and encourage you to analyse your progress to gain insight and advice about your business direction.
Commonly, entrepreneurs can find local community or business groups on social networks like Facebook.
But it doesn't have to be so formal. We've pulled together a list of the top 7 Instagram accounts every small business owner should follow, for example. These can play just as important a role in helping you to navigate the challenges of running a business.
How should I use social media for my business?
Today, having a social media presence is not just a good idea for business owners – it's a necessity.
Our expert article on how to use Instagram for your business is just one of our many digital marketing guides that can show you how to develop a strong supply chain network.
Next steps
The above guide has given you a quick rundown of what to consider before starting on your new business journey.
Next, visit our full guide on how to start a business for more ways to help you get going and take your startup from its basic form to its full glory.