Now that we are well and truly into 2018 and back to work, many of us are looking for a change and for some this may involve plans and ideas to start your own business, with January being one of the most popular times of year for new business registrations. At CHW Small Business Accountants in Bolton, we are always excited to work with entrepreneurs and provide advice and support along their journey. We have a specialist package ‘LaunCHWorks’ for new businesses whereby we handle everything you need to get your business off the ground including all the required Company registrations, advice on start-up finance and an introduction to our wide-reaching network of contacts.
Nicola Roby, Director at CHW Small Business Accountants sets out some common mistakes to avoid if you are considering setting up your own business:
Do what you love. As long as what you love doing can pay the bills!
The ultimate dream for most of us is to get paid for doing what we love. However, no matter how passionate you are about your business idea, if it doesn’t have a commercial backbone it is unlikely to be a success. Attempting to profit from a something you enjoy where there is no real business opportunity could quickly turn sour, especially if you are giving up a paid job to do so.
That’s not to say there isn’t scope for commercialising hobbies, but as with any business idea you must consider – is there a genuine gap in the market?, who are your competitors?, what are the start-up costs and overheads?, what is my pricing model and are potential customers likely to pay that price?, as just a few examples. Within our LaunCHWorks package, this is something we run through at the outset.
You also need to consider that once your hobby is a business, there will be a hundred other things you’ll need to do to make a success of it and you could end up spending less time actually doing the thing you once enjoyed.
Having a great product or service idea is crucial, but one of the main reasons small businesses fail is because they run out of cash. Proper financial planning at the outset is crucial.
This will help you calculate how much capital you’ll need to get your business idea off the ground and once you’re up and running you will need to closely monitor your income and expenditure, to enable you to make informed decisions.
It is important to have access to current financial information that provides a clear picture of your company’s cash flow. Many businesses will require funding, either at their launch phase, or in the form of ongoing working capital. Benjamin Day, Funding Director says “We are always excited to advise our clients regarding funding when they are setting up their new business venture – there are a whole host of options on the market and it is important to select and secure the product which is right for you.”
Consider the impact on your lifestyle
Having your own business can sound glamorous and appealing, but to make a real success of it you need to embrace the lifestyle. In reality, this could mean sleepless nights, limited personal income and having to constantly navigate issues ranging from cash flow problems to HR issues.
You may need to learn to thrive under the stressful conditions that entrepreneurship brings and prioritise your business over other aspects of your life.
Don’t try to do everything alone
Clearly, entrepreneurs looking to have a successful business need to be 100% committed, but that doesn’t mean you can or should try to do everything yourself. One of the biggest traps you can fall into is spending too long working in rather than on your business.
Your company’s growth could become stagnant if you don’t think about your strategy. Try not to focus too heavily on the details rather than key activities that move the business forward. Surround yourself with a team who you can rely upon to take control of all the crucial elements that make a business run efficiently. Consider outsourcing tasks that eat into the time you should spend growing your business. Many leadership books strongly advocate the art of delegation, citing that a good leader surrounds themselves with a great team.
Start-up failure rates remain high, and turning dreams into reality can be fraught with difficulty. However, the satisfaction of doing so and your achievement may make it all worth it. Every new entrepreneur should be prepared for a bumpy ride, but avoiding some common pitfalls could help you get your business off to the best possible start.
To discuss how CHW Small Business Accountants in Bolton can help with your new business venture or for any other advice on Small Business Accounts, contact our Accountants in Bolton, Nicola Roby on 01204 534031 or via our enquiry page.
Want to find out how we can help you and your business? Get in touch today and let's have a chat.