Setting up your own business? Some points to consider

Working for yourself is empowering and stressful and kind of exhilarating.  Once you have tried it, you probably won’t ever want to go back to working for someone else.  But self-employment is no game: a bad day at work can cost you money; a series of bad days can threaten the roof over your head.  So before you go ahead and set up your dream business, there are a few points to consider.  Some of them are listed below:

1.  It’s not about what you want to do

Do what you love - but don't expect to make a business out of it.

Do what you love – but don’t expect to make a business out of it.

Let’s suppose you enjoy building matchstick models.  Everyone says how lovely your models are.  You give some away as gifts and people are delighted to display them.  They rave about them. You spend hours and hours on your matchstick models, so much so that you decide you want to follow your passion and use your talents to start up a small business selling them.  This is the number one error made by business start-ups.  Very few people can make a living from something that was once their hobby.  It really doesn’t matter how talented you are or how beautiful your matchstick models are, nor how many thousands of followers you have on social networking sites.  If there isn’t a demand for what you are selling, you won’t be able to make a business out of it.  On the other hand, if you don’t enjoy your area of business you won’t be able to make a success of it.  Do what you enjoy: but only if it’s a viable business.  This brings me to my next point:

2.  Do you need to run your business part-time or full-time?

Don't give up your day job to sell crocheted owls.

Don’t give up your day job to sell crocheted owls.

All businesses take time to build up so it sometimes makes sense to carry on with your ‘day job’ if you can.  This doesn’t apply to businesses such as cafes and shops, which really need to be open at times when people expect shops to open (Monday – Saturday from 9am – 5pm, as a general rule).

3.  Staffing is a huge luxury

At the inception of your business it is imperative that you do as much as you possibly can yourself.  This is partly because nobody will ever understand (or care about) your vision quite like you do and partly because staffing is expensive.  If you want good, reliable staff you need to pay them properly – and that’s a moral AND fiscal imperative.  Starting your own business always, always costs more than you think and every penny in wages comes out of your turnover.  You probably can’t afford to employ staff in the beginning.

4.  You have a new boss

You can win at running your own business - but only if you plan carefully.

You can win at running your own business – but only if you plan carefully.

The biggest revelation about self-employment is that you now work for … your customers.  Your customers are not like a boss; they don’t need to follow employment law or company guidelines.  If they don’t like your product or service or disagree with your prices, they can go elsewhere.  They’re not obliged to be polite to you or reasonable in any way.  This means that the ability to build a good relationship with your customers is very important.  Are you a people person?  You’d better be!

5.  You won’t make a profit for at least a year

Your business will not make a profit for at least a year.  Many businesses do not make a profit for two years or more.  Some never make a profit.  Turnover (the money that comes into your business) is completely different from profit (the money that is left over when you have paid your running/ manufacturing/ making costs).  You need to know this before you start out.

6.  Location can decide the success or failure of your business

Location may be key to the success of your business.

Location may be key to the success of your business.

Location is absolutely key.  First, consider whether you need premises.  Premises are a good idea if you need passing trade or if you need customers to come and see your goods or talk about your services.  Your matchstick models do not need shop premises.  Instead you could find shops that might want to stock them, sell them at craft fairs or at Urmston Market or sell online.  Online selling, by the way, is not an easy option and often requires considerable investment.

If you do need premises, try and make sure they are as visible as possible.  My own business is on Urmston’s main crossroads.  Thousands of cars and passersby see our signage every day. Avoid deserted side streets and take a good look at several properties before you rent.  Avoid being tied in to a lease for years on end.  Remember point number one above: it’s not about what you want, so don’t make the mistake of thinking you’ve found a great location because it’s very close to your house.  You need a location with great footfall and close to other businesses that are thriving.

You don’t need a MBA to start your own little business but you do need to consider whether your business is viable, whether you can afford to strike out on your own and whether you’d even enjoy it.  I have been running my own business for close to six years.  I am uniquely qualified to advise on starting your own business because I run one of the most successful independent tuition centres in the country AND one pretty unsuccessful baby clothes business, so I do know the pitfall and the peaks of running one’s own business.  I hope to work mainly for myself for the rest of my career, but it’s not for everyone.  Is it for you?


2 thoughts on “Setting up your own business? Some points to consider

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s