ENTREPRENEURSHIP / JAN. 23, 2014
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Top Tips to Starting Your Own Business

2014 will be the year you leave your cushy, well-paid job to start your own business.

You’ve got the energy, the enthusiasm and ideas to see you through the tough times. There’s just one tiny problem. You don’t have the money.

Fear not, there is hope for you yet. Thanks to the wonders and blessings of the internet, starting your own business has never been so easy. With a little research and budgeting, you can find the time and resources to go solo.

#1 You Don’t Have to Quit Your Day Job

It’s important to remember energy and enthusiasm will only get you so far in life. Quitting your job is not a prerequisite to setting up a business. You can reduce your hours, take time off, or find part-time/ flexible work to supplement your income.

Setting up your own business, is about making smart and informed decisions over a period of time. Don’t hire staff, unless absolutely necessary. Consider virtual office services, using contractors or outsourcing abroad.

Bottom Line: You can test the waters without making the full plunge.

#2 Homework Counts   

Make it your personal mission to cover every aspect of running your own business. In the past, money was a huge obstacle to fledging businesses. Unless you had the credentials, reputation, or a good credit line, setting up your own business was a remote possibility. Thanks to the internet, you can stalk peers, borrow tips and rack experts’ brains for the inside scope. In the world of business, information is power. The more you know, the better placed you will be for success.

Bottom Line: Spy on your competitors and keep your allies close.

#3 Cover Personal Expenses

Reduce costs, downsize or sell off your personal effects. Do whatever it takes. Above all, do NOT use bank loans or credit cards to cover personal expenses in the first few months of setting up your business. You will find yourself juggling living costs with operational costs and this is a quick recipe for disaster. Budget, save or keep your day job.

Bottom Line: Keep personal expenses off your business’s balance sheet.

#4 Avoid Banks

There are many ways you can fund your business without spending years saving or resorting to bank loans. Crowd funding websites, like www.kickstarter.com, allow you to start a project and raise funds. While you may not be able to fund your entire business, you can cover an important phase. Alternatively, you can sell shares of your business by getting friends and family to invest.

In the UK, there are a number of government funds to help startup businesses like Seed Enterprise Investment Scheme, which encourages investors to fund startups through tax reliefs. There is also a rising trend of “business angels” or individuals looking to invest their wealth in startups, which has resulted in investment organizations like the UK Business Angels Association.

Bottom Line: Banks should be the last resort.

#5 Keep Your Investors Happy

Once you find the right investors, be open and transparent in your communication. If your business is slow in making money or breaking even, consult industry experts. Determine what isn’t working and change strategy early in the game.

Are clients late in paying? Consider setting up new processes to improve cash flow.

Bottom Line: Don’t get lazy, once you’ve secured the funding.

With these tips in mind, you can boost your confidence, your business potential and your funding options significantly.

 

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