More micro and small businesses get started up each day than ever before now, and in 2020 it might just be the year to develop your business idea and actually get the ball rolling. This article will clue you up on everything you need to know before beginning your new start-up business.
Business start-up statistics in 2020
UK Web Host Review have compiled together a series of statistics about small businesses, and it shows that they are much more commonly found than larger companies. They state the following facts:
- Medium-sized businesses account for only 0.6% of business in the U.K.
- 3% of all businesses in the U.K. are classes as small businesses (fewer than 50 employees)
- Micro-businesses (0-9 employees) account for 96% of all private sector companies in the U.K.
- Less than 4% are small businesses (10-49 employees)
- There are more companies without any employees in the U.K. than the total number of business (82% compared to 25% of companies)
This means you should never be put off by the size of your business venture, and instead take confidence from the fact that almost all businesses are micro-companies now with 0-9 employees.
Some of the smallest companies have taken off in recent years and grown to huge levels, so you should have belief that it can happen. Obviously ground your expectations to a certain extent but be quietly confident when beginning your new business.
The biggest success stories
The Telegraph has listed some classic examples of small businesses becoming massive corporations:
- Virgin Group – Sir Richard Branson, the entrepreneur behind one of the world’s most iconic brands, started his business career in a church crypt. At the age of 15, he published a student magazine, borrowing £300 from his mother to launch it, and running operations from a local church that a vicar let him use. Today his Virgin Group holds more than 200 companies, including Virgin Trains and Virgin Atlantic.
- Carphone Warehouse – Charles Dunstone founded Carphone Warehouse in 1989, when most mobile phones were still the size of house bricks. Investing £6,000 of his savings, Dunstone launched a business selling mobile phones from his flat. Today Carphone Warehouse is Europe’s largest independent mobile phone retailer. In July 2000 the company floated on the London Stock Exchange and was valued at approximately £1.7bn.
- Dyson – The garden shed is usually a place to escape to and hide among garden tools and the odd tin of paint, but for British inventor James Dyson it was the workshop where, in the early 1980s, he set out to turn his vision of a bagless vacuum cleaner into reality. Five years and 5,127 prototypes later, the world’s first cyclonic bagless vacuum cleaner arrived. Dyson then spent two more years scouring UK and Europe for someone to license the product, before taking it to Japan. Income from the Japanese licence eventually enabled him to manufacture a new model under his own name in the UK. Still privately owned, last year Dyson announced profits of £367m, up 13pc.
The importance of planning
It’s important to have a clear plan for your business when beginning a new venture. Have clear goals and set yourself deadlines to have pieces of your planning done by. Not only will planning lay out clearly what you need to complete in order to achieve your business goals, it will also help to keep your finances stable. Include budgeting in your planning process and allow yourself plenty of time to complete objectives.
Nationwide views business plans as roadmaps that help to guide the business founder, keeping them on track. They write, “Whether you’re starting a small business or exploring ways to expand an existing one, a business plan is an important tool to help guide your decisions. Think of it as a roadmap to success, providing greater clarity on all aspects of your business, from marketing and finance to operations and product/service details”.
All successful businesses start with a plan, it doesn’t necessarily mean you have to stick to it completely over time, but it will help to guide you and keep you on the right road at the start of your business and beyond. Your plan can include all kinds of things, meaning it will likely be unique and completely different to others.
All business plans are different, but share a few key similarities throughout. Your plan may cover elements such as social media, venture capital, how much office space you’ll need, etc. This is how widespread they can be and why it’s such a good idea to create one. If your business required a bank loan, you would also most likely have to show your business plan to a representative of your chosen bank too.
Wave Blog understand the importance of business planning in regards to finance. They write, “If you’re planning on pitching to venture capitalists, borrowing from a bank, or are considering selling your company in the future, you’re likely going to need a business plan. After all, anyone that’s interested in putting money into your company is going to want to know it’s in good hands and that it’s viable in the long run. Business plans are the most effective ways of proving that and are typically a requirement for anyone seeking outside financing”.
Having a business plan will also prove the viability of said proposed business to yourself. Instead of relying on your passion alone to create something, you’ll be able to get a clear glimpse of how exactly your idea will raise finance and generate profit. This will also tell you if you have something that can go long term and if you have access to everything businesses require.
Pursuing the right idea
It’s crucial to choose the right idea when setting up a business, this should be something you’re passionate about and ultimately something you believe can make money. Discovering what you want your business to be can actually be one of the most difficult tasks for start-up business owners.
Starting a new business should be a time filled with excitement, but it’s sure to bring its fair share of frustrations. Basing your start-up business around something that peaks your interests is key to getting through the tougher times and longer nights you’ll have to endure as a business owner.
The Guardian say that passion is absolutely a key element when pursuing a start-up business of your own. “Starting your own business is an amazing and rewarding experience – it’s also the beginning of a journey that’s likely to have its share of frustrations, dead ends and late nights. If you’re going to make your business the success it deserves to be, you need to have the drive and self-belief to weather any storms. And sometimes the difference between business failure and success is simply the passion to see it through”.
Essential business marketing
You can have the greatest start-up business idea in the world, but if nobody knows it’s out there it simply won’t turn over a profit. Luckily, marketing is in many ways easier than in the past today. You have so many forms you can target and advertise on, and while the internet can be a crowded space, gaining an online presence can be cost effective these days.
Using social media is a great way to have a free online entity for your business. It doesn’t cost anything to set up social media accounts for companies. Instagram, Facebook and other social media outlets allow you to set up business-specific pages that are easily identifiable to consumers.
It’s useful to know what audience profile you’re aiming your product/service at. This will help you to identify where the majority of your marketing materials should go, allowing you budget accordingly in this area. You’ll need a website of some kind as well for your social media pages to link back to, it will allow your business to appear professional and may even be an added dimension of driving sales, depending on what type of business you own.
Getting people to spread help push your business over social media is the new word of mouth technique for modern day businesses. Seek out simple, helpful acts from friends and family by asking them share posts about your business across social media. Building from the ground up like this is extremely important for new start-ups.
Location location location
Many businesses today start at home. Working remotely is now proving to be more popular than ever. If you choose to conduct your business from home, then you’ll need to provide yourself with a high level of comfort, finding a space you believe you’ll work efficiently from.
The Guardian believes working from home can be a positive experience, but only if you’re in the right environment. “A very important part of starting a home business is finding somewhere comfortable and quiet to work. Clearing a space on the kitchen table among the morning’s breakfast dishes isn’t going to set you up for a productive and inspiring day. Instead, find somewhere where you have space to spread out documents if you need to, and where you aren’t faced with the distracting sight of piles of ironing or half-done DIY. If you’re a sociable person, you may want to think about renting a co-working space once or twice a week, too”.
If working from home isn’t for you there’s plenty of opportunities to rent office spaces, this will be completely dependent on where you’re based and where you want your business to locate, but all towns and cities will have buildings available to rent.
The perfect company name
Coming up with a name for your company is an obvious, but crucial step in the creation of your new start-up business. This can be something that describes to the customer exactly what your business is, or something more abstract, the decision is completely up to you.
One thing which you will need to consider however, is the originality of your chosen name, check that no other business has the same title. GOV offer this handy name checker service to everyone starting a new business, so ideally you’ll be able to look on their before attempting to make your business go live.
The name you choose will be the identity of your new business and will stick with it throughout it’s lifespan, so think long and hard about what you want it be called before you make the decision. Go for something memorable that carries with it some meaning to you.
Most new businesses will obviously need a boost of funding to help them take off from a standstill point. This will allow start-ups to take big steps forward, saving them both time and effort in the pursuit of building up custom and becoming a recognisable brand.
Now that bank loans are becoming increasingly difficult to acquire for small and new businesses, many people go down the route of alternative finance options. Merchant cash advances can be a useful way for start-ups to to build up at the beginning of their active business life.
PDQ Funding is a market leader in start-up business merchant cash advances, and you can get a quote from a friendly member of our expert team today by visiting our website.