About half a million people in the UK start a business each year, although this number could be significantly higher in 2012, because of high numbers of redundancies and a shortage of jobs. Most new ventures fail within a year or two, but according to government figures there are about 4.8m businesses in the UK.
Not everyone is up to the challenge of starting and running a successful business. Although your knowledge and experience will grow, if your new business is to succeed, much will depend on your personal qualities. Do you really have what it takes to run a business – especially when the going gets tough?
Don’t believe those who tell you registering a business is difficult. Making it a success is the hard part. Registering as a sole trader is immediate, easy and free. Call the HMRC ‘Helpline for the Newly Self-Employed’ on 0845 915 4515 or register online. Setting up a limited company is simple, too, (especially if a formation agent or accountant does it for you), although it takes up to 10 days and involves paying a fee.
If you think working for yourself will mean you can take it easy, you’re probably in for a rude awakening. You’ll probably have to work harder. If you want to know what running your own business is like, speak to others who do it. Then answer the crucial question – is running a business really for you?
As with most meaningful things in life, what you get out of your new business will be determined by what you put in. The only way you’ll be prepared to work hard and overcome the knockbacks is if you’re totally committed. You won’t be able to just walk away.
You need to minimise your start-up costs and run your business in the same way if you want to maximise profits. Inevitably, starting a business will generate some start-up costs. You might have to invest personal savings. You might need to borrow money from friends or family (but only ever after carefully considering the implications). Calculating your start-up costs should be one of your earliest start-up tasks.
Even if you work hard, are totally committed, have a great business idea and you’re well suited to running a business – success isn’t guaranteed. Many new businesses fail. Even if it doesn’t, it could take years before your business generates profit. But the good news is – many new businesses succeed. You simply need to be aware that there is a risk of failure.
You might have to work long days, nights and weekends, which will impact your relationships. Your social life might also suffer. It might be a while before you earn a livable wage – or any money, so your nearest and dearest might need to cover some or all of your living costs. You might have to cut right back and get used to doing without before you reap the rewards of running your own successful business.
Overcoming challenges when starting up is satisfying – especially if it’s the first time you’ve done it. Some tasks are hugely enjoyable, while showcasing abilities you didn’t know you had can also be gratifying. One day, you might look back on your start-up days as among your most enjoyable.
Although things might not work out as you expect or want, starting your own business can give you a better work-life balance. It can make you wealthier. It can help you to escape the commute, free you from a job you hate or working with/for people you don’t like. It can give you greater job satisfaction. Some days you might regret starting your own business. On others – you’ll think it’s the best thing you’ve ever done.
Start Up Donut editor Mark Williams is a freelance editor, copywriter and journalist