Running your own business offers a great deal of freedom and has become a remarkably popular choice for many people, despite the recession. The number of small firms is, in fact, rapidly growing as large organisations shed jobs across a range of industries. Self-employment may seem like a dream come true but before you set off on the road to independence there are a number of considerations to take into account.
- Don’t quit your job and take the plunge without planning ahead. Creating a business plan has a number of advantages but the most important is that having a plan gives you a structure to work to and it can also be useful if you need to find finance in the forms of loans or grants.
- Don’t put all of your savings, capital or take a second mortgage to fund your venture. Try to avoid taking on too many liabilities in the form of loans but don’t clean out your rainy day stash of cash – the chances are you’re more than ever likely to need it to fall back on in the early days.
- Don’t choose an “off-the-shelf” business that you have no experience in, or no real interest in. There are a range of franchise opportunities and online “work from home” opportunities, but running your own business often requires a secret ingredient – passion – and if your business doesn’t fire your enthusiasm you’ll be unlikely to succeed.
- Don’t focus on providing the cheapest service in your chosen field. The cheaper you price your stock or services, the harder you’ll have to work to make ends meet – this can be a recipe for long hours, exhaustion and failure.
- Don’t waste money on courses or training until you’ve spoken to local and national business start-up advice centres; Business Link has a wealth of information, guides and fact sheets all much of which is available free and they can offer access to excellent training and seminars in a whole range of industry specific subjects. Not all of the services are free but it’s a good place to start.
- Start out part-time during the evenings or weekends if this is at all possible. Whether you’re planning to leave work soon, or facing redundancy, testing out a business idea part-time can help to iron out issues before you are completely reliant on the income generated from your own firm.
- Learn to live on a small budget; cut back all and every unnecessary spending and save every penny you can to contribute to business costs. In the early days it’s best to be frugal at home and invest time and money in the business; if you’re a success you’ll be able to splash out again once the business is firmly established.
- Consider starting up with a friend or relative. There are up and downsides to this and you’ll need to choose carefully. However, working with a partner brings a range of different skills to your business and doubles the chances of success. It also can help to have two different views when tackling problems, and all business owners have wished for an extra pair of hands in the early days.
- Look beyond the obvious in terms of business administration and software. Most businesses today need a website, an online marketing strategy and you’ll also need accounting software and an accountant – don’t start up without either of these last two as accountancy is one headache that most small firms rarely learn to love.
- Find the right premises. Whether that’s the cupboard under the stairs or the most prominent shop on the high street, location can make the difference between success and failure. If you’re looking for real world premises there are a range of options on rental and many commercial landlords are keen to get and keep tenants; be prepared to haggle. If you’re working from home don’t assume you can manage without office space; a locked, bolted and keypad entry system may be required to stop the home part of your life wandering in frequently!
- From accounting software to premises there are a number of pitfalls to avoid when starting up your own business. Most are common sense and planning ahead is the most important of all.
Carlo Pandian is a business graduate at Birkbeck College (University of London) and blogs about payroll software, internet tools and start-ups covering everything from freeware apps to social media decks. Aside from his daily job, Carlo loves helping his local community center with his marketing and social media skills.
This was a guest post for TheEmployable