How easy is it to start a business? The truth.
I’ve often been asked ‘how easy is it to start a business?’ The answer is that it can be very straightforward and quick to start a business – particularly if you have a strong concept, a simple business structure and it’s all regulation-free.
However, to be successful in any sector and scenario, there are two aspects to consider when fully answering ‘How easy is it to start a business?’ And these apply no matter who you are and what experience you have.
How easy is it to start a business? – Core Elements
- Your business model – the three fundamental elements that you must work out
- The practical and legal tasks involved in establishing your business
Of course there are your personal circumstances too – whether that is time, motivation, fear of failure, skills, or personal financial situation, for example.
In my experience, if you’re excited and have a strong desire to achieve, you will work hard and succeed. As long as you remember to ask, or take up, support that is available to fill in the gaps in your knowledge, and utilise third parties to undertake some tasks, so you are simply more cost-effective with your time.
But there’s more on that in other blogs, so let’s get back to your business model and the practical and legal tasks in starting a business…
How easy is it to start a business? – Your Business Model
There are three essential elements that you must have thought through before you can develop a workable business model. After that you can go on to create your business plan, marketing plan, set up your systems and launch your business.
1. A product or service that people and/or businesses need or covet
- Is there a gap in the current market for something new, or are you improving what already exists in terms of efficiency, benefits, innovation or cost, for example?
- Will your product or service still be relevant in 5 or 10 years time?
- What problems does your solution provide to overcome your target customers’ problems/challenges? (What are your benefits/unique selling points (USPs) and emotional selling points (ESPs)?
- What is your competitive advantage – why would people buy from you and is that hard for your competition to copy?
- Is the market big enough for you to achieve your goals, in terms of balancing numbers of customers, price point and repeat purchases, along with competitor activities?
- Have you undertaken any prospect/customer research to give you really informative, first-hand data?
2. The right price, quality and functional mix
It’s essential to consider these three factors together to make your proposition work.
- The price must be right – this depends on what you are selling, how much it costs to produce/deliver and your target market
- Quality level – determine what level of quality fits the market need, but always then strive to deliver the best customer experience. Reputation can be lost in seconds and take years to gain.
- Functional specification – what are you offering within the scope of your product and service? Does this fit with the quality and price point?
Without sales that produce a profit, your business is doomed.
- What are your costs likely to be and what could be kept at a low level for now?
- Do you need a premises or can you work from home?
- Do you need specialist equipment and staff? ● Do you need to pay for licenses?
There must be enough margin to cover all your business expenses and taxes to at least break even. Then you need additional profit to build up reserves, to invest in developing new products or services, to gain further operation efficiencies and so on.
Profitability is paramount for survival. Ensure you understand your cash flow and key financial figures.
How easy is it to start a business? – The practical and legal stuff
- Understand your legal obligations for your type of business. Take a look at this tool to find out if you need any special licenses.
- Review the legal entity options for your business – and the associated financial, accounting and tax obligations. A good starting point is the Government advice page for requirements for sole traders, partnerships and limited companies.
- Find out what insurances you need
- Decide on a business name – I’d suggest checking Companies House, Google, social media, the charities commission and website domain availability too (eg via Go Daddy or similar). Don’t forget to check what the initials of your business could stand for if you do a Google search – you don’t want any embarrassing surprises there!
I hope you’ve found the above insightful and useful for the start of your business planning…
We have worked through these core elements with startups and entrepreneurs based in East Sussex, Kent, Brighton, Crawley, Haywards Heath and across the UK.
If you’ve got any questions or comments arising from our answers to the question of ‘how easy is it to start a business?’ , please do get in touch – we’re happy to chat.
Why believe what I say?
Hello, I’m Basil Riley,
I’m far too liberal and have helped a diverse range of businesses. I don’t fit the stereotypical business advisor perception you may have! I understand how new business models and ideas are sometimes difficult for banks, investors and support companies to really get.
Running your own business is challenging and rewarding. I believe if you have that fire in your belly and you utilise support to help you achieve (since no one can do and be good at everything), you can manage your own business.
Let’s be frank, if you can speak your customers’ language and you have the internet, you’re off to a great start!
I wish you every success.
Connect with me on LinkedIn.
What we do at Easy Business Start-Up
We can help if you are newly self-employed with navigating your start-up journey, as well as support experienced entrepreneurs with launching new businesses. Because we know you need to concentrate on developing your sales and focus on revenue and profits. Find out more about our range of services.