Many individuals dream of becoming their own boss by starting a small business. However, many start-ups fail in the first year (or first few years), so it’s vital that you are prepared for everything in order to survive those crucial moments in the life of your company. As contractor accountants, we know there are several things you should do before starting your company, so we’ve compiled a list that will help you to get ready before taking the plunge.
Do Your Market Research
One of the most important things you need to do before starting your company is market research. This includes learning more about your industry and your competitors, as well as knowing how you’re going to compete and win customers. Begin by gaining a deeper understanding of your industry so you can make the right decision and come out on top; you’ll want to consider whether there’s a market for your idea and if your business will have legs to stand on as well.
How will your company differ from others? Do you have all the necessary skills to thrive in your marketplace? Is your business idea viable? How much are clients willing to pay for a service or product? By asking yourself these tough questions, you will be more prepared to handle any potential issues that may arise in the future – and avoid pitfalls that may prove costly to your company.
When it comes to the competition, knowing what everyone else is up to can help you to understand your position in the industry better. It can also help you to learn from other people’s mistakes. In addition, just because you have a fantastic idea for a business, doesn’t mean others haven’t thought about it before. You need to offer something that is better or more affordable; if you believe you’ll be unable to, it may be worth considering the viability of your idea. So, studying your competitors is a crucial step.
Choosing the Perfect Name
Choosing the right name for your company is one of the most important things you’ll have to do before you start trading. After all, your business name is the first point of contact a customer will have with your company or brand, so you’ll want to create a good first impression. There were 5.6 million small businesses at the beginning of last year; standing out from the crowd and coming up with a good, solid company name right off the bat can be a challenge.
For this reason, it can also be an incredibly stressful process, especially because rebranding later down the line can be labour-intensive and expensive. You want a name that is memorable, easy to pronounce and that will stand the test of time. Most people wouldn’t just pick a random name; careful thought and consideration should be given, but many contractors may not know how to even start.
There is no one-size-fits-all formula to create a perfect company name, but a good rule of thumb is to not make it too generic, boring or hard to spell.
While going down the ‘local’ route can make your name safer and more trustworthy, given that clients associate them with local roots and friendliness, you may be pigeonholing yourself in the long run. The same goes for choosing a name that reflects a service or product you provide – it’s likely you’ll want to expand into other areas or grow your inventory, so make sure the name you pick isn’t too restrictive.
You’ll want to keep your domain name in mind too. Do you want your company name to be the basis for a unique brand? What you want to achieve will depend on your marketing strategy and how you expect your clients to find you. In addition, your domain name should match as closely as possible with your company name; before picking your company name, check if the domain name is available and secure it as soon as you’ve reached a decision.
Once you have chosen a name that you’re 100% happy with, register it with Companies House.
How to Choose a Great Logo
Your logo is the visual representation of what your business stands for, so it goes without saying that it’s an incredibly important decision to make. A logo should enhance your customers’ first impressions of your company, help you to establish a brand identity and showcase how professional and trustworthy you are. From your website to packaging and business cards, all of your branding materials will have your logo on them, so you’ll want to get it right.
A good logo will communicate what your company is all about and help you to stand out from the crowd. In order to do this, you should have a clear idea of what makes your company unique, which will make it a lot easier to make design choices that match that.
There are, in essence, three types of logo you can consider for your company. Font-based, such as McDonald’s, image-based and abstract graphic symbols (for example, Nike). The latter type is meaningless until it’s associated with something. Before creating your logo, think about what message you want it to convey. Then look at the competition and what similar businesses are doing. Keep it simple and functional too, which will ensure that the logo will work just as well on a business card as on a billboard or website. Pictures tend to make a stronger statement than words, which is something to keep in mind.
Figure Out Your USP
Knowing your unique selling point and how to use it to its full potential will give you an edge over the competition. Customers will choose you in favour of other companies if you can offer them something better or different. In essence, your USP shows clients what is so special about your business and that they can’t find it anywhere else.
Think about what’s unique about your company. Is it your products or services? Do you offer stellar customer service? Is your after-sales relationship one-of-a-kind? Perhaps you offer affordable but good quality products? Or maybe your values (such as creating sustainable clothing or doing a lot of charity work) appeal to a large demographic?
Once you know what makes you different, you can leverage this knowledge and not have to worry about getting lost in the crowd.
Do You Understand Your Audience?
In order to know whether there is enough demand for your products and services, as well as the marketing, pricing and business model that will work for you, you need to know as much as you can about your target audience.
If you try to appeal to everyone, however, you will only succeed in appealing to no one. For this reason, ensure you are targeting the right people. Who are they? Where do they shop? Which social media platforms do they hang out on? What drives them? How much disposable income do they have? What are their values? The best way to get answers for all these important questions is to engage customers; for example, send out questionnaires, create focus groups and speak to potential clients on social media.
Making an effort to really know your market can be extremely rewarding when you start your company. You can use this information to build your marketing strategy, including knowing which social media platforms are best suited for you.
How Will You Get Your Name Out There?
You can have the world’s most amazing product but, if no one ever knows about it, what’s the point? Getting your name out there is a crucial element of becoming your own boss, so you should already be prepared to promote your company ahead of creating it. Set up a marketing budget and think about how you’re going to build relationships.
Use social media to network with potential customers, potential partners, journalists, retailers, and local businesses, and attend industry events and conferences. You can also share content on social media, write guest articles on your expert subject, ask people to review your product, do launch parties, blog or vlog, and so much more.
It takes time to build your reputation, so take advantage of every opportunity and, which goes without saying, always offer great customer service as well.
Have an Online Presence
In the current digital world, businesses that don’t have an online presence are more likely to struggle. Considering there were 5.6 million small businesses in the UK in 2018, as mentioned above, if your business is not on the Internet, you’re already starting at a disadvantage. Surprisingly, almost 2 million small businesses don’t even have a website; even if you don’t sell products online, a website can serve as a way to make bookings or showcase a service.
Many contractors are already making the most of technology, so consider what will make sense for your business. Which social media channel is best for you? What should you include on your website? How often should you engage with your customers? Having an online presence will help you to promote your company as well, so it can be a very cost-effective way to get your brand out there and grow your customer list.
What Type of Insurance Should You Get?
Making sure you have the right insurance is another step you don’t want to miss. By law, you need to have employers’ liability insurance if you have employees, and public liability insurance if you’re going to have customers or suppliers on your business premises. If your company will be selling products, you may need product liability insurance too. Any vehicles you use must have the correct insurance as well. While it may seem expensive to obtain all kinds of insurance before you’ve even launched your company, you will have peace of mind knowing that, should the worst happen, you and your business are protected.
Have Your Accounts Organised From the Get-Go
It can be easy to get swept up in the excitement of starting your own company and, because there are a million things to sort out ahead of launch day, accounting is often forgotten – or relegated to the bottom of the list. However, sorting out your bookkeeping ahead of starting your business will allow you to stay organised at all times. No more hunting for that elusive receipt you just can’t seem to find or stress about tax season because you have documents everywhere.
For example, always create a separate bank account specifically for your company. If you mix business and personal finances, it will be very difficult to separate everything later when the time to do your tax return comes. Don’t let work pile up either, because what will happen is that you will get further behind until you can no longer catch up. In addition, you have more important things to do than worrying about your bookkeeping – this is where we come in.
Gorilla Accounting can help you to stay organised and make sure you never have to incur any fines with HMRC. We also handle all of the hassle and administrative work associated with accounting, which will free up your time to focus on growing your brand-new company.
Another way we can help is by providing FreeAgent bookkeeping software. Convenient, easy to use and precise, this online software can be used on any device and offers a real-time 24/7 view of your accounts. By keeping everything in the same place – as well as keeping accurate records – you always know where your accounts stand. Additionally, you can use our contractor tax calculator to figure out your take-home pay as well.
In the rush to get everything set up and finally launch your business, you may be tempted to postpone some of these steps – or may not feel like they’re even necessary in the first place. However, when it comes to starting your own company, you can never be too prepared. By taking care of everything ahead of time, you can then put it out of your mind and concentrate only on your business when the time comes.