Planning to Start a New Business This Year?

Starting a business this year? Start your planning now.

Was your New Year’s Resolution to start a new business or side-hustle? Have you been planning to start your own business, but spend more time planning than actually starting it?  Starting a new business isn’t always easy, but it can be very rewarding, financially and mentally.  Planning is important. It is the first step, but the first step of many.

Financial Rewards

Starting a new business can be costly.

• Someone who gives up their existing job to start their business will lose their wages until the business starts to make money.
• Not all new businesses take off. It is estimated that 20% of new businesses fail within the first year. But that means that 80% don’t fail.
• If you are buying equipment or stock, then this requires an initial outlay.

  However, starting a new business can actually have a financial reward –

• If you are starting a new business as a side hustle, any income is additional to your current wages and income.
• If you have a great idea for a business and have researched it well, you may earn more than you currently do.

  Starting a business has financial risks and rewards, but it also has mental rewards.

  Mental Rewards

  Starting your own business can also be stressful and time consuming.  BUT it can be extremely rewarding if you are doing something you really want to do.

• Say you are a keen writer and want to develop your own copywriting or editing business.
• A gardener who wants to work for themselves.
• A sales assistant who wants to set up their own shop or online shop.

  There is a lot of potential for new businesses today. In the UK, it is estimated that 64% of adults want to set up their own business, but only 20% of adults actually do.   If you use those figures worldwide, that is a lot of people wanting to work for themselves, but not that many actually do. 

  This is where it is essential that you carefully plan if you are intending to start a new business this year.

  Planning Your New Business

  Start Planning Now

  You don’t have to start a new business on the 1^st January. You can start anytime.  When starting a business, you have to start planning now.   Depending on the type of business, some may take a lot of time to plan and organise whilst others may be relatively quick.

  Viable Ideas

  You have an idea, now you have to see if it is viable.   Businesses do fail. Sometimes it is due to recessions or other changes, but sometimes it is due to a lack of planning and research by the business person.

  Cupboard Company A (CCA) was set on a busy main road. That sounds useful, but there was no parking outside the shop and the business did not have any off road parking of their own. This made it hard for customers to visit the shop easily.   They also set up their business in a premises that was previously used by another company selling cupboards and doorknobs etc. Exactly the same as Cupboard Company A. The previous business went out of business.   CCA’s could not afford any staff and had to be available to pick up his children, so the shop was only open 10 – 3 Monday to Friday.  You can see the signs that CCA is not likely to succeed.

  Some signs are obvious, but they are not always. A great idea is wonderful, but if it is not practical and sensible then the idea is unlikely to work. 

  If you have a great idea, talk to other people about your plans – people you trust. Explain where you are thinking of working, the times, if you are renting a premises or working from home. Listen to what they have to say. We can be so close to an idea sometimes that we don’t see the problems and mistakes we can make.

  Mission Statement

  Think of a mission statement. What are you trying to achieve with your new business? If you don’t know what you are trying to achieve, then how will you achieve it.    Take time thinking of your mission statement as it can be easy to get started, then change your mind about what you are doing, then change it again. If you know what you are working towards, then it is easy to be focussed and specific.

  Research - Carry out research

• Who else is running a similar business?
• How well are they doing?
• Do you need a premises or can you work from home?
• Could you start the business as a side hustle and build up, or do you need to give up work to get it started? There are options. Examples –
  • A wanted to set up an independent bookstore. She had a high paying job and didn’t want to risk giving up work, so she set up the bookstore and employed staff to run it. She worked there at the weekend until it was successful enough for her to give up her existing job.
  • B wanted to start selling books, but did not want to take the risk of renting a premises. He started buying second hand books from charity shops and reselling them online.He did this as a side-hustle.

  Costs

  What are the costs involved in running the business? It is important to consider the costs involved, such as –

• Lost wages
• Childcare costs
• Costs of equipment or stock
• Insurance
• Staff
• Accountancy bills
• Tax
• Rent or mortgage
• Storage

  Etc.

  Not all costs will relate to all businesses, but consider carefully what your costs could be. The aim of setting up a new business is presumably to make money, to make a profit, so it is important to consider how much you need to make to turn a profit or a living wage.

  Time and Commitment

  Starting a new business takes time and commitment. If it were easy, anyone could do it, and no one would work for someone else. Think carefully –

• Do I have the time to start and develop a new business – as a side hustle or a full time business?
• If it is side hustle, how much time do I need to commit to the new business each week? And do I have the time to do this?
• Think about your week. When could you realistically and regularly work on your new business?
• When would you need to work on the business? For example, say you were setting up a new business selling jewellery online and you start to get sales, you would need to check your emails or orders daily and get them ready and sent out to avoid irritating delays for customers. So you would need to consider if you had the time to do this every day or at least several times a week.
• What do I need to know to do this? For example, do I need to retrain or take certain qualifications. For example, someone setting up a new coffee shop might need training in health and safety, food hygiene, using coffee machines etc.
• How long am I willing to give this? A new business will not necessarily become profitable or successful immediately. It is therefore important to consider how much time you are willing to give the business. Someone who has saved quite a bit of moneyor taken out a loan might set up a full time business and thinkthat they have a year to make it profitable.Another person may have less time. Someone working to start a business as a side hustle might have more time.

  Are You Ready?

  You want to start a new business, so what is stopping you?

• Do you have an idea that you think will work? If the answer is yes –
• Think whether you want to do this as a full time business or a side hustle.
• Then do your research. Who else is out there? Who are your customers? Where will you work from?
• Do you have the time?

When you are sure you are ready, now you get down to the real nitty gritty and get your business started.

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