Thinking of starting a small business ?

There are more that 500,000 small business startups in the UK each year. Additionally over 300,000 small businesses fail or close down each year. It’s never been easy starting and running your own business but with careful planning you can avoid being one of the failure statistics and actually enjoy paying your annual tax bill to HMRC !

So before you startup your small business, what should you do?

Startup business planning - although this may sound boring to most people, if you plan properly this little document can be a life saver. The areas you need to concentrate most on are marketing and your financials. Start with your finances. Certainly in your first year you need to cover all your costs including repaying any bank loans - see how many sales you need to achieve each month to cover your costs. You may be surprised at how little or how many you need to make. This can be an eye opener.

Either develop a simple spreadsheet or purchase one of the many business planning tools that are on the market. These are really a very small investment and should be a top priority when starting up any business.

Skills and knowledge - there is little point in you starting a new business in an area you know nothing about unless you can buy in the experience. You will surely fail as your competitors already know their businesses and you will unlikely be able to tap into their market place. Do start a business you have some experience or expertise in.

Start up small and grow steadily - there are very few businesses that generate millions of pounds in their first few years but many business plans state exponential growth which will be far from reality. Most businesses start off small and this way you can manage your growth, learn much about your market and customer base and develop products and services to satisfy their needs. If you grow too fast you will find it hard to provide excellent customer service.

Keep costs low - don’t be spending out on expensive items you simply do not need. When your bank financing first hits your bank statement it may start to burn a hole in your pocket but keep to your plans. Keep bank fees as low as possible, keep staff costs low, employ a good accountant and pay yourself as little as possible. As much money as possible should be re-invested into your business for long term success rather than pay for luxury holidays or expensive cars.

Get expert help when you need it - not many of us know everything and it will waste your time if you are searching for free advice or don’t take any advice at all. It really is worth paying for a good accountant (this should be around £1,500 per year), good staff and good marketing advice. There are plenty of business forums around where you can find trusted networks and people that know what they are doing and can ensure your startup gets customers and keeps in profit. Don’t put off any business problems or challenges - get help as soon as possible.

Other factors worth considering - if you want to run a retail business ensure you have the right location. Don’t sign a lease for somewhere that gets little passing traffic, is difficult to find, has limited parking or requires much shop fitting. When signing a lease make sure you have break clauses for unforeseen events. Get quotes for everything you need. There are so many businesses vying for your custom you can always get better quality for a cheaper price.

If you have any other hints or advice for new small business startups then please let us know. Good luck.