When you start up your own business it can be a very exciting time, but it can also be daunting. Many business owners start their new business venture because they have a good idea or a great product and they are passionate about what they do. But very few have all the skills needed for a successful business simply due to experience. A new business dictates that you need to know about all aspects of running a business, from marketing, HR, legal and financial.
So here are my 3 P’s to a Successful Start-up:
1. Your Product (or Service)
You can’t have a great business without a great product, whether it’s goods or services you offer, you need a great product, something that sets you apart in the market place. This doesn’t mean that you have an exclusive offering but something that sets your business apart, meaning a well-defined product (or service) that differentiates itself in some way.
You need something that sets you apart from your competitors and the power to influence people to work with you or buy your product. This could be your approach, the way you physically present or/deliver a product, your after-care service, or how you package and price your product or service. Or a unique combination of these factors.
2. Your Plan
To quote from Benjamin Franklin “If you fail to plan, you are planning to fail!”
When starting your business make sure you have a plan. At least something that puts into writing what you want to achieve and how you intend to go about it, this will help in so many ways not least keeping you on track when times are tough but also informing others of your vision.It will help to get finance from banks and highlight areas where help is needed.
It will also helps you understand what turnover or number of sales you need to cover your costs (pay your mortgage!) or pay your staff/office overheads. It really helps to have that level of granularity – I need to sell X or have Y number of clients spending £Z per month to hit turnover target of and my overheads are ABC, etc.
Lastly, remember the opportunity cost of running your own business, if you were working for someone else, how much could you expect to earn? This question often puts the profit level into perspective.
3. Get Professional Advice
Professional advice is invaluable at the start of any business. This will help prevent costly mistakes made simply because you’re not aware of certain aspects, particularly when it comes to accounting. You can miss out on tax allowances and advantages simply by getting the timing wrong.
For example, one client missed out on the temporary increase in the Annual Investment Allowance (AIA) by buying a large piece of equipment costing over £200,000 by not seeking my accounting advice before the purchase. They bought the equipment in December 2012 when the AIA was £25,000, if they had delayed the purchase slightly they would have been able to claim the whole cost of the equipment against tax as the AIA temporarily increased to £250,000 from January 2013. So instead of a deduction of £200,000 against profits they got a deduction of £56,500, the remaining £143,500 would be carried forward for use against future profits at a rate of 18% per annum.
Starting up in business?
If you are in the process of starting up your new business, it’s a great time to seek professional advice. Get in touch for a no obligation chat about your business plan, cash flow forecasting, and accounting requirements, I’d love to talk to you.