Thinking of starting a new business in 2021?

Are you feeling stuck in a rut in the corporate world, or worried about your job? Have you been made redundant?  Or, has your furlough made you think about things very differently? Do you have some amazing ideas, but are unsure how to make your dream a reality? Are you ready think about setting up on your own? If the answer to these questions is “yes” then this blog may help you prepare to step out of your comfort zone, get all your ducks in a row, and set you on your way to starting a new business!

If you are confident in your “why” and you have the passion and resilience to get back up after any setbacks; you have the financial backing in place; and the support of those around you; then you are at least part way there.

But even if you are only starting to consider a new venture at this stage, whilst it may be a huge step, it need not be too overwhelming with the right guidance.

Whilst this blog is aimed at those looking at starting a new business, corporate financial planning in its entirety is one of our areas of expertise.

From a sole trader start up, partnership or Directorship, through to purchasing an existing business or commercial property and discussing financial benefits for your Management Team or staff, our independent financial advisors work with you to cover all bases.   

So, read on for more guidance if you are in the start up phase, or it is something you may consider further down the line.   

Starting a new business – be in the minority for the right reason!

As mentioned in our previous blog, seeking the most appropriate and independent financial guidance is crucial – whether leaving a business or starting a new business.

In fact, most start-up businesses fail in the first year.  Why? Poor planning, being financially ill-prepared, little research done to validate the business idea, or the ‘entrepreneur’ is simply not cut out for the responsibility and level of commitment needed.

But we know you want to be in the successful minority! The business owners who have taken their time to:

Produce a business plan - Know your vision, your objectives, and goals. Who is your target market? Who are your competitors? Does the marketplace need your business? What makes your new business stand out from others? What are your timescales?  Can you predict your financials?

Budget - This is one of the most important factors – not just considering profit, loss, and cashflow within the business. But also ensuring personal financial security if launching the business takes longer than anticipated. Or indeed if the business fails. The right financial advice really could be the difference between failure and success when starting a new business.

Be realistic - Particularly if this is your first solo venture. Do not be tempted to rush, cut corners, or just use estimations and follow the ‘wishful thinking’ approach. Without being realistic, your dreams and vision will always stay that way.

Validate - use various methods of research to test and validate the business plan. It may take you further outside your comfort zone but seeking opinions other than those of friends and family will prove much more effective. Test the water with those who genuinely are your target market.  

Adapt the original plan, as often as is required, using the results of the research. Be honest when reviewing the results. And then start again if necessary.

Put systems and support in place – including deciding on your company structure, if appropriate, and business name. Register with HMRC. Technology. Banking and Accounts. Staff, location, and equipment. Compliance, licences, and training. Long term plans.

Market and promote the business, ready to launch!

What if you don’t want to face it alone?

Whilst some entrepreneurs are happy to go solo, others may find this one step too far. After all, there are pros and cons to working for yourself and by yourself.  

Advantages of working alone - earning an income by doing what you love; working on your own terms e.g. flexible hours; building your business around your life/family; no responsibility for other staff; flexibility to implement new ideas; quick decision-making; no chain of command; stress on your terms.

Disadvantages of working alone – high level of discipline is required; responsibility for the entire business – success or failure; all financial risks and business decisions are yours; potential reduced or inconsistent income initially; no holiday or sick pay; launching and then progress and development may be slower than if you have a team around you; potential pressure and increased stress levels.  

Introducing a business mentor or a business partner

If you are not totally confident or comfortable in running your own business as a sole trader, you might want to consider whether a business mentor or business partner might be the way forward.

Each serves a completely different purpose, so it is important to distinguish between the two.

A business mentor:

• is independent from your business, with no personal or financial involvement.
• shares their knowledge and expertise around the business strategy and longer-term planning.
• works with you ‘on’ the business rather than ‘in’ the business.
• provides a level of accountability that someone in the business may not uphold so formally.  
• may also offer opportunities for your progression and self-development if they believe it will be of benefit.
• May have an established network for you to tap into for complimentary business owners or even customers.
• They will have been there and done it; made the mistakes; and learned the lessons.

Ideally (but depending upon the level of involvement you agree) a business partner:

• will work with you ‘in’ the business as well as ‘on’ the business.
• brings different attributes to the business which complement your skills, not detract from them.  
• could enable tasks to be divided and allocated to the person with the most relevant knowledge, experience, and expertise – speeding up processes, reducing pressure, etc.  
• shares the same vision, values, and motivation for your business to succeed.
• may be able to assist financially or access more funding – sharing the risks and financial burden.
• act as a sounding board or second opinion in decision-making.

I am ready to discuss starting a new business, what next?

Hopefully, you have found this blog helpful and are ready to progress.

No matter what type of business you are setting up, we look forward to guiding you through the steps, putting your plans in place, and helping you in starting a new business. Rest assured that our team of financial advisors are experienced in all aspects of corporate financial planning. So, once we have helped you to get up and running, we will continue to support your business with regular reviews and by providing the most relevant and up to date information and advice. We're here to help you make your vision a reality.