Each business can be different from the next, so always do your own research and check for legal advice whenever uncertain. A business can range from selling cupcakes at a village fête to an international multi-billion-pound company. Depending where you are on the spectrum of business ambition, you will encounter different challenges, but also similar ones.

When offering a service, it’s normally related to your time, and of course may include materials or products to be able to deliver the service. Is this something you can offer remotely online, or do you need to physically deliver the service in person? Again, you need to factor in all the costs involved. You should be able to easily find examples similar to the business you are thinking about setting up. They might have a great guide to think about areas you’ve not thought about or realised you need to factor into the costs.

This is a great point to stop and think about is it realistic to create a business from here. Most businesses fail because they don’t have enough capital to start with, you always need money to start your business. Do you have enough to start making your product / offer your service? Even if you are able to produce your initial offering for free, do you have money to get it in front of your potential customers?

Do your research

So now you must do some market research to understand who and where your customers are. Why should someone spend their money with you? And how much will it cost you to get to your customers? You might have the best product, but you don’t have enough money in the pot to advertise to reach your exact customer base. A common mistake starting out, is to say that your customers can be anyone. This is too wide of a scope, of course, it may well be anyone, but to get more for your money when marketing, it’s good to start focusing on a particular group of customers. The more you learn and earn, the more you can expand to other customer groups, or different offerings.

This is another point to stop and think now you’ve done your research, either it costs too much for you to produce your product / service, or to reach your target market might be unachievable. It’s okay to put the idea down and not pursue it or shelve it and wait for when the time is right to push it forwards. This will save you a lot of money and time, when you can be spending it on a better idea.

You’re now in a great place, you understand what you are offering, the costs involved and have done your market research. You now have to build the most important piece of the jigsaw, the business plan.

This is effectively bringing together all the knowledge you have gained already and putting together a plan and strategy on how the business will move forwards. This can be really tricky, especially going into new territory not knowing a number of factors until you get going. This may mean you need to do even more research in these areas.

Once you feel you have done your best, there will always be unknowns, but a good plan will try and mitigate as many potential problems as possible. It is always better to put a plan together and accept that it’s going to twist and change as you progress. If you find you just don’t know something, for example, what is your first month worth of sales? Just put a rough number down, this may be accurate or way off, something is better than nothing. As you progress you will start to get a better understanding of numbers and how your business runs. There are many business plan templates and tools online to get you started.

Something that is important to realise from the start, what is the ambition of the business? Are you just monetising a hobby and it’s nice to have some extra cash? Are you trying to become the best international seller of quality bookshelves? Or does your business give back to the community or the environment? To achieve these things, do you need your business to make £100 or £1m in the first year? It’s important to have targets and understand what the business is aiming to achieve, otherwise you, your customers and staff won't know or understand what the business means. What does the success of the business look like to you?

This might be something you fit in at the weekends, or something you feel you want to dedicate all your time to. As mentioned before, it’s important to ensure you have not only enough money in the pot to get started, but you need to ensure you can cover ongoing costs. A great way to reduce the risk of starting a business is to work part time elsewhere to ensure you have an income until your business is big enough to start bringing in a bigger income.

You will need to decide legally how to set up your business, you can be self-employed, form a partnership, or set up a company. There are different company types, but most companies are a ‘Limited’ company. With all of the approaches, it’s important to understand what they mean and choose the most appropriate set up for your business. If you are unsure, then reach out for advice from a business adviser. Business advisers come in different forms, there are often schemes to help starting a business, see https://growthhub.swlep.co.uk.

You might find it useful to speak to a business bank manager, they will often have guides and templates to help factor in costs for starting a business. Accountants also offer great advice for starting up, and quite often they will offer the service to register your company through Companies House where all companies need to be registered with. There may be a cost here, but that may save you time and money to allow you to move forwards knowing you are good to go.

It’s always good to find an accountant, especially one that has experience in the business area you are covering. They will often offer great advice on how to structure and organise the money side of your business. It’s important to always understand the current money situation and forecasting the future.

Regardless of which direction you take your business, if you are making money, then you must ensure that you declare your earnings to HMRC. It is more straightforward to submit your end of year tax return online than you may think. However, if you are unsure or find it overwhelming, always reach out to an accountant, they will be able to do it for you. You can even call HMRC directly and ask them questions. It is highly recommended to do this early and not leave it to the last-minute deadline, as if there are any questions or issues you need to resolve, this will give you the time to sort them.

Good luck with all your business ideas and entrepreneurial flair.