Start Your Own Business 2010: How to Plan, Fund and Run a Successful Business (Startups)

291 Pages·2009·3.12 MB·English

by  Ian Whiteling

This edition first published in Great Britain 2010 by
Crimson Publishing, a division of Crimson Business Ltd
Westminster House
Kew Road
Richmond
Surrey
TW9 2ND
First edition published by Crimson Publishing 2009
Second edition published by Crimson Publishing 2010
© Crimson Publishing, 2009
All rights reserved. No part of this publication may be reproduced, transmit-
ted in any form or by any means, or stored in a retrieval system without
either the prior written permission of the publisher, or in the case of repro-
graphic reproduction a licence issued in accordance with the terms and
licences issued by the CLA Ltd.
A catalogue record for this book is available from the British Library.
ISBN 978 1 85458 489 2
Printed and bound by MPG Books Ltd, Bodmin
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CONTENTS
INTRODUCTION 1
1.0 IDEAS FOR STARTUPS 25
2.0 DECISION TIME 59
3.0 PRE-STARTUP RESEARCH 83
4.0 W RITING A BUSINESS PLAN
AND FINANCE ISSUES 103
5.0 SETTING UP 139
6.0 F INDING A NAME AND
CREATING A BRAND 167
7.0 PRODUCT PREPARATION 183
8.0 TELLING THE WORLD 223
9.0 OPEN FOR BUSINESS 247
10.0 N EXT STEPS: REVIEW
AND IMPROVE 279
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CONTENTS
INTRODUCTION 1
Still a good time to start up… 2
Entrepreneurs are people like you 4
Can you do it too? 24
1.0 IDEAS FOR STARTUPS 25
The right startup for you 26
Shoestring startups 28
Other popular options 40
Protecting your business ideas 50
2.0 DECISION TIME 59
What it takes to become an entrepreneur 60
The reality of starting up 61
The average UK entrepreneur 62
The entrepreneurial personality 65
How and when to quit your job 70
Women entrepreneurs 73
So you’ve made your decision… 79
3.0 PRE-STARTUP RESEARCH 83
Market research 84
Understanding your competition 97
4.0 WRITING A BUSINESS PLAN
AND FINANCE ISSUES 103
Why write a business plan? 104
Preparing data for your business plan 106
Your break-even point 108
Key elements of your business plan 110
Forecasting your sales 114
IV
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CONTENTS
SWOT analysis 116
The people 120
The mission statement 121
The executive summary 123
Getting people to read your plan 124
Raising finance 129
5.0 SETTING UP 139
Limited company 140
Sole trader 147
Business partnerships 152
Banking on success 157
6.0 FINDING A NAME AND CREATING
A BRAND 167
What’s in a name? 168
What you can and can’t call your business 170
Checking for originality 171
A great name is good marketing 172
Your domain name 175
7.0 PRODUCT PREPARATION 183
Searching for the right premises 184
Before you secure the space 190
Equipping your office 192
Building the right team 194
Once you are an employer 202
Finding and dealing with suppliers 206
Insuring your business 216
Pricing 219
8.0 TELLING THE WORLD 223
What is marketing? 224
Building a marketing plan 225
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CONTENTS
Getting your message heard 229
Public relations 231
Low-cost marketing strategy 234
9.0 OPEN FOR BUSINESS 247
Paying yourself 248
Making a sale 249
The importance of getting paid 253
Travel and expenses 267
Bookkeeping 268
Why you need an accountant 272
10.0 N EXT STEPS: REVIEW
AND IMPROVE 279
Time management 280
Self-motivation 287
Enhancing performance 290
Personal development 291
Personal and staff training 294
Over to you… 301
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INTRODUCTION
WHAT’S IN THIS CHAPTER
■ What are the elements of a successful business?
In this chapter we profi le four successful, inspiring
businesses, learning what drove them to start up,
the challenges they faced along the way and the key
lessons they learnt.
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START YOUR OWN BUSINESS 2010
Still a good time to
start up…
If you have picked up this guide and are reading this page, the chances
are that you are thinking about starting your own business. And,
despite whichever direction the prevailing economic wind is blowing
in, you are not alone. Until the recession in 2008, more and more
people were feeling the entrepreneurial urge. More than 200,000 new
businesses registered for VAT (value-added tax) in 2007, according
to the latest government statistics in November 2008 – a rise of
23,700 over 2006. Although the 2008 fi gures won’t be available until
late 2009, indications are that there will be only a small decline in
VAT registrations, despite de-registrations – those companies going
out of business – expected to increase signifi cantly, according to the
Department of Business, Enterprise and Regulatory Reform. This
is because many people who have lost their job are starting up on
their own.
Despite the downturn, small- and medium-sized businesses
remain a key driver of the UK economy. The days of hundreds of large Despite the
companies employing thousands of staff are no more. The number downturn,
of aspiring entrepreneurs starting small businesses has surged in small- and
recent years, and their companies now make up 99.9% of the total medium-sized
businesses in the UK, and are responsible for almost half of the UK’s businesses
workforce. remain a key
driver of the
economy
Starting a business in a
recession – pros and cons
Reasons not to start in a recession
1. People are spending less money
2. It will be harder to raise money
3. It feels risky at a time when everyone is scared of risk
2
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INTRODUCTION
Reasons not to start in a recession
1. It is cheaper to start now than at any other time
2. So it needs less cash to start than at any other time
3. Your opportunity cost is small
4. People and businesses still consider some new options
5. Creative non-cash deals easier to do e.g. partnerships
6. Easier to hire great staff/consultants
7. Your positive energy amid a sea of depression will stand out
8. Cheap acquisitions
Technology has advanced to such a stage, it’s now possible to
start a global business from a laptop, forcing the entrepreneurial
doors wide open to everyone from teenagers to the retired and those
who quite sensibly want to dip their toes in the water (or at least on
eBay) before taking the plunge. There’s also a greater range of fi nance
available to help make your entrepreneurial dreams a reality than ever
before. Even though some of the key sources of fi nance, such as
banks and equity investors (which take a stake in your company in
exchange for fi nance) have been badly hit by the credit crunch, and
are investing less in new businesses, money is still available. So if your
idea is good enough – and presented in the right way – people will
want to invest in you. (For a detailed discussion of fi nance options,
see Chapter 4). What’s more, if you can gain investment in tougher
economic times, it’s tantamount to a rubber stamp of success.
There has also never been so much help and information for people
who are thinking about striking out on their own, and the government
CONTACT
has never been so geared to encourage enterprise. The National
The National
Enterprise Academy, which will open its doors in September 2009,
Enterprise
Academy will deliver the UK’s fi rst full-time accredited courses in Enterprise and
www.thenea.org
Entrepreneurship. It is the brainchild of Dragon’s Den entrepreneur
Peter Jones and its aim is to give students – aged from 16 to 18 –
the skills, experience and support to learn how to set up and run
successful and innovative businesses, or to become enterprising
employees, helping to grow existing businesses – skills that can be
used across any business sector, and skills for life.
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START YOUR OWN BUSINESS 2010
Prime-time television shows such as Dragon’s Den, The Apprentice,
Tycoon and Risking It All have pushed the idea of running your own
business to the forefront of the national psyche – no longer is it
exclusive to the daring or the pinstriped, it’s for everyone. Of course,
startups.co.uk has been championing business pioneers and helping
those inspired to follow in their footsteps for some time now, through its
website, awards and other events. As such, startups.co.uk has been
more aware than many of the rise in interest in entrepreneurialism. But
even we were surprised when our fi rst book How They Started, telling
the startup stories behind some of the UK’s best-loved brands, from
Innocent Drinks to Pizza Express, hit Amazon’s Top 20 on its release in
2007, and garnered considerable media coverage. Such is the current
buzz around business.
The startups.co.uk website has become a font of knowledge
and debate on starting your own business, and Start Your Own
Business 2010 draws all this vital information together in a defi nitive
guide to starting your own company. The book is presented in the
readable, sharp, jargon-free style that characterises startups.co.uk,
with key tips, action points and engaging case studies to help you on
your way. Whether you have designs on becoming the next Richard
Branson or simply want to go it alone and be your own boss, you
have come to the right place. The following pages will guide you
through choosing the right business to run and deciding whether
you are up to the job of launching your own company, to drawing up
your business plan and everything else involved in preparing you for
take off.
So fasten your seatbelt and get ready for the ride of your life…
Entrepreneurs are
people like you
For some people, the word ‘entrepreneur’ automatically brings to
mind Peter Jones and his ilk – those high fl yers who set up and run
4
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