Starting a small business is exciting, but also nerve-wracking. There are so many things to bear in mind if you’re setting up a small business – from VAT to marketing. Whilst this guide is by no means comprehensive, it will list the 5 essential things you need to know before starting your small business.
- Research your market
No matter how great your idea for a small business is, it will be a drop in the ocean if you don’t know how to make a ripple (or a wave). Researching your market, figuring out who your target clients or customers are, and understanding your competitors are essential steps to take before starting a small business.
- Keep meticulous records
From day one, you should ensure you are keeping meticulous records in a place that is safe and easy to access. Before you can do this, you need to figure out what records you need to keep, what format they should be in, and what they’ll be used for. Finding useful invoice templates is one step in this process, but you should also find out how your business will pay taxes, if you need to register as a VAT business, and what information you need to record.
- Define your expertise and niche
What does your business offer that others don’t? Why should clients or customers choose you? If you can’t answer these questions, it’s time to go back to the drawing board. New businesses are cropping up every day, so unless you’re the next Bill Gates, chances are you already have a lot of competitors out there offering similar or identical products and services. Take time to define your expertise and niche so that you can return to this definition when promoting yourself.
- Figure out your startup costs
Successful small businesses require a lot of preparation and figuring out your startup costs is essential to this. Typical startup costs for small businesses include:
- Office space, equipment and supplies, and utilities
- Legal requirements like licenses, permits, and insurance
- Inventory costs
- Employee salaries
- Advertising and marketing costs such as paid advertising and making a website
Clearly set out your expenses. This will help you figure out long-term profits and is also a requirement if you need to attract investors.
- Wise up on marketing
Marketing isn’t as straightforward as paying for adverts or sharing posts on social media. Effective marketing strategies for small businesses require careful thought and preparation – and they can be costly. Before setting up your small business, make sure you understand how marketing works, what type of marketing will be most effective for you, and how much time and money you’ll need to put into your marketing plan.
Setting up a small business is no small matter and these five tips to consider before you get started are essential. That said, anyone can set up a small business and with a great idea, plenty of preparation, and the support and advice of those around you, you’ll be off to a good start.