This is a question that would-be entrepreneurs need to ask themselves. It is not enough to have a good idea – or even a great idea – for a product or service. What you need to find out is whether you can provide that service or product to enough people who will pay enough so that you make enough profit.
So where do you start? The first thing is to research is what is out there already. If the market is saturated with competitors providing the same goods or services as you, then your business must have a pretty compelling USP (unique selling proposition) to make it stand out.
Check out the competition
How are your competitors doing? Companies must file their accounts at Companies House, and companies listed on the London Stock Exchange will have to provide detailed financial information to the public, which means that you can find out quite a lot about them after a few clicks on the internet.
The next thing to do is firm up the scale of your potential customer base and how much they would be prepared to pay. The best people to tell you about this are strangers (friends and family might fib to protect your feelings). If you need the results of the research for attracting funding, it can be worth paying professional market researchers who will present impartial findings in a clear way. If you end up doing the research yourself, strive for professional looking results. Common research methods include questionnaire and interviews with interested parties.
Conduct a realistic appraisal of costs
Think through every penny you need to spend to sell your goods or services, and make a note of them. Have you counted business premises, transport costs and tax implications? If you are making a product it is easy to focus on components and blank out these other issues which still have a bearing on whether your business can be profitable.
Think about business models
Finally, think about the structure of your business and whom you will be working with. If you lack certain skills, should you consider going into a partnership with someone who can make up that deficit? Or should you be considering setting up a limited company? Setting up a company can only take a couple of hours with a formation agent, and mitigates the risk in case your business turns out not to be viable.
Catering is one of those businesses that people idly dream of starting because the entry bar appears to be pretty low. If you’re a foodie whose dinner parties are a hit, it seems like an easy way to get into the food business – easier, at least, than becoming a chef and working at a high-end restaurant; easier than opening your own permanent restaurant; easier even than getting into the food truck arena. After all, all you need is a kitchen and a few waiters, right?
Well, no, actually. A lot goes into a catering business. It’s more than just your secret recipe for to-die-for canapés or cheese puffs.
Depending on your local authority, you probably can’t run your business out of your home kitchen. Health inspections are usually required for any sort of food service. Also, you will need to register as a business and get a tax ID or similar recognition. There are industrial kitchens that rent workspace by the hour or shift, which can be a very affordable way to cook up your delights if you’re not ready for a permanent space of your own.
Well, the food has to come from somewhere, and picking it all up from the local supermarket is not going to be cost-effective. While local shops or markets are fine for special ingredients or high-end touches, in general you’ll want to stick with wholesale grocers. Their costs will be much lower for the basics you need. Keep orders under control – a big mistake newbie caterers make is preparing too much food. Think hard about the number of people you’re cooking for before you place a grocery order.
A second supplier will be needed for the non-edibles a caterer is expected to supply. If you need tables, chairs, table cloths, utensils, serving trays, urns and cambros, you can either purchase them and drag them everywhere (and store them when not needed) or rent them from a supplier, getting exactly what’s needed for each occasion.
Once you cook everything and assemble your flotilla of place settings and serving trays, you’ve got to get everything to the destination (even if cooking on-site, you’ll need to transport staff and materials). You can rent a van, of course, but here it might be wiser to purchase and use rentals only to handle bigger jobs and to get over mechanical problems with your own vehicle. Keep in mind you’ll need something appropriate for food transport – always follow the golden rule of keeping hot dishes hot and cold dishes cold while in transit.
In the beginning, and for small jobs, you may be able to get by on your own, but it’s unlikely. Even small parties will usually require you to run the kitchen/staging area while at least one other person handles bringing out serving trays and monitoring the party itself. A friendly partner is a good start, and for those small beginning ‘gigs’ friends and family, or students looking for work, may be adequate. Going forward, though, you’ll need to hire at least one professional server. Look for someone who has worked for caterers before.
Don’t forget, a uniform looks more professional. It doesn’t have to be custom or something you’ve made. Simply specifying that all team members wear the same style and colour outfits is usually sufficient. You can have button badges made with your company logo to provide instant professionalism.
Catering is a business like any other and requires strong business fundamentals to be successful. Keep your eye on the receivables and payables and adjust your budgets as necessary, and never ever underbid your own costs just to get a job you think will be high profile. In the end, it will be complicated and more work than you expect – but also more rewarding, if you do it right!
Ireland has always had a pro-business attitude characterised by low taxes, investment in growth through innovation and the hub of tech and life science behemoths such as Dell, Johnson & Johnson, Google, IBM and Cisco reflects that. But now Enterprise Ireland (EI), the Irish government body responsible for supporting the development and growth of Irish enterprises, is pulling that into a sharper focus with help for UK start-ups willing to come and join us.
If you’ve read the papers recently, you’d be forgiven for thinking that global interest in Ireland has been tempered and the Celtic Tiger roar is more of meow these days. In fact, the recession plus the fall in the Euro has made Ireland a very cost-competitive base for internationally focussed start-ups with low-cost rents and access to a lower cost but highly skilled workforce.
That’s exactly why the Irish government set up EI’s Overseas Entrepreneurship team. We have a remit to attract what we call High Potential Start-Up (HPSU) companies from the IT, financial services and life sciences sectors to relocate to Ireland. One of our big focuses is the start-up fund, which offers up to €500,000 of funding from a pot of €10million for existing start-ups who relocate.
We don’t provide all the funding to get your business off the ground and would want you to invest a significant proportion yourself or raise funds from commercial sources. But we can help with advice and introductions to other investors in Ireland. And unlike many other investors we do not normally take a Board seat or take more than 10% of the ordinary equity so you retain control.
We also know it’s about more than money and we’ve found direct assistance works well. The Irish government provides direct long-term strategic support for entrepreneurial start-ups that come to Ireland to grow. Our goal is to actively support start-ups with advice and access to a network of contacts, mentoring, training and our universities to aid research and development. Schemes such as our Internet Growth Acceleration programme (iGAP) - where companies can apply for a six-month intensive management development programme aimed exclusively at high potential internet/games companies – have flourished.
One UK company that has used EI start-up support is the now VC-backed Digit Game Studios. Its co-founders, Richard Barnwell and Martin Frain, have a rich heritage in triple-A games and are working on a new IP for hard-core social games, developed for cross-platform support. Crucially, the appeal for Digit wasn’t just our support, it was Ireland’s ecosystem. Digit found that it could employ locally because most people had transferable tech skill that were perfect for the gaming industry and Ireland’s intertwined IT community helped them to get noticed. The Digit co-founders are already thinking about expansion, using the influence of the big US tech giants in Ireland as leverage for growth, particularly as we are one of the two Eurozone countries that speak English and the closest to the North American market.
It’s this commitment to start-ups and next-generation technologies – even during the global recession – which we believe will help UK entrepreneurial and dynamic start-ups and give them the support network to thrive.
So, you had a great idea, you turned it into a business and now you are well on your way. Brilliant! But wouldn’t you like to make running your new business even easier? Your tablet device could provide the answer.
A mere few years ago we didn’t have access to handy tech devices such as tablets, but now there is an app for pretty much anything you can think of – including time management and marketing.
Marketing is an integral part of any business, as you’ve probably already found out, but often it’s something that can fall by the wayside because of a lack of time. Thanks to tablet devices, your start up doesn’t have to suffer. You can give your marketing strategies some attention, even while you’re on the move, thanks to these fantastic tablet apps:
Raven Tools boasts an array of tools and add-ons that allow you to manage your marketing campaigns, as well as some impressive features that work well with industry profession API’s [application programming interface], including SEOmoz and WordTracker.
Raven Tools is brilliant for allowing you to tailor exportable PDFs and custom reports to your brand, handy for adding a professional touch to your reporting. Offering two different price packages, as well as optional add-ons, Raven Tools is the app that allows you to tailor absolutely everything. No wonder it’s so popular.
Wildfire By Google
A social marketing app, Wildfire offers solutions for all of your social marketing needs. Boasting a recently upgraded marketing suite, this app allows you to mix and match your products until you find the best solution for your business.
Using the app you can promote single or multiple campaigns, including sweepstakes, ads and promotions to your customers via the main social networking sites – this allows you to get your message across to large audience, quickly. Comprehensive analytics are also offered with this app.
A clever app that will help you to grow your online and social presence, thanks to good old ‘word-of-mouth’. Much like Wildfire, Payvment allows you to easily create a virtual storefront on their Facebook fan page that allows customers to buy directly from Facebook, using PayPal to complete their transaction. There have been mixed reviews from businesses for this app, but it is a free tool, so give it a go.
This free app allows people to connect with their favourite venues, brands, and stores, as well as rewarding shoppers when they make a purchase via the app. Small businesses can create a virtual shop window, upload photos and provide information and updates, as well as invite customers to rate them.
The Elephanti app allows you, as a business, to have a direct point of contact with your customers, enabling you to find out what they like and want. The app is brilliant for letting potential customers know about your business and when a customer ‘checks in’ to your store you can communicate with them about every aspect of your business.
The introduction of Real Time Information (RTI) for PAYE is being billed as a positive step for all — making it easier for HMRC and employers to operate their PAYE systems. How difficult the transition will be remains to be seen but it is a significant change that every UK business needs to understand and prepare for.
Under the current system — which has remained pretty much unchanged since 1944 — employers are only required to send information about their employees' PAYE and NIC deductions at the end of the tax year. From 2013, they’ll have to do this every month — when they pay their staff. This migration process will take place between April and October 2013.
But businesses need to prepare for the change now.
Is your data accurate?
An important step, according to payroll software specialist Sage, is to make sure your records are 100% accurate. Sage provides nearly half a million employers in the UK with payroll solutions and it has been working closely with HMRC since RTI was conceived.
The wrong data about your staff, it warns, can cause inaccurate tax calculations or HMRC compliance checks.
The vast majority (80%) of data problems, according to HMRC, are concerned with inaccurate information about staff — names, dates of birth and NI numbers.
Its records show that 824 employees had the surname “unknown”, for example. 507 employees are called “A N Other” and over 2,000 have an NI number of AB123456. In addition, some 40 employees on payroll records purported to be over 200 years old!
Recording employee information for RTI
Sage has come up with a useful list of dos and don’ts to help businesses prepare:
• enter the employee’s full forename and surname
• enter a double-barrelled surname in full
• only enter an employee’s correct National Insurance number
• enter the correct date of birth in the format DD/MM/YYYY
• use “known as” names such as Bob instead of Robert or Sam instead of Samuel
• enter an initial in either the forename or surname boxes
• make up an NI number
• enter a default date of birth such as 01/01/1901
There’s more advice on data quality on the HMRC website.
Sage has produced a series of guides and webinars as well as access to training on RTI to help businesses prepare.
• After this blog was published, HMRC announced a "relaxation of reporting arrangements for small businesses". According to HMRC: "Until 5 October 2013, employers with fewer than 50 employees, who find it difficult to report every payment to employees at the time of payment, may send information to HMRC by the date of their regular payroll run but no later than the end of the tax month (5th)."
Let’s be real right from the outset — going into business for yourself isn’t always easy. If it were an easy thing to do then everyone would be doing it. As business owners, we find ourselves, particularly in the early stages of a business, having to be a master juggler in that we are managing a whole host of different tasks at seemingly the same time.
Not only are you consumed with the “doing part” of providing your products and services, but you find that there is a myriad of other things you need to be concerned with such as marketing, managing staff, being on top of the numbers, staying updated on the ever-changing legislation landscape and ensuring that you are on top of any red-tape burden that is imposed on your business. The list doesn’t end there, but you get the idea.
Being passionate about what you do or good at what you do isn’t enough to build a successful and profitable business. Anyone can have a good idea but it takes someone very special to build a successful business. So to avoid becoming part of the nasty statistic that shows that over 80% of businesses ultimately fail in the UK, with a higher mortality rate for start-ups, it is really important that you embark on your journey with a solid foundation in place. The three key ingredients — or 3Ps — are:
Being passionate about what you do is so important because during the more challenging periods, which you will most certainly face when establishing your new business, it is this passion that will carry you and propel you to overcome whatever obstacles you face. Being passionate about what you do is not enough by itself but is a vital ingredient in any successful business.
Preparation is all about making sure you have a viable business model before you begin. It is about being clear on what your proposition is and who your target market is. A business plan is a vital document that must be prepared. In a nutshell a business plan is the road map of your business. It shows the destination you are seeking and details the path you will follow and the resources needed for you to get there. Financial projections form a major part of a business plan. You must know your numbers. Remember a business that fails to plan, plans to fail!
Provided you are passionate about what you do and have done the necessary preparation then you must have the drive, motivation and determination to see it through and not give up at the first hurdle.
But provided you have all of the three attributes, then there is absolutely nothing to fear about going into business for yourself. There will be obstacles and challenges but there is also no greater feeling and sense of achievement than being the master of your own destiny and building your own successful business. Good luck!
Love or loathe them, if you don’t consider using exhibitions to promote your business, you may be missing a trick. Since I was a young salesman, I’ve dreaded stand duty, with its attendant aching feet and seemingly very little return for the time spent there.
As you get older, the pain in the feet and back is still there; the exhaustion from the drive there and back, combined with the physical exertion of manning the stand can take a couple of days to get over. However, I am a firm believer in the power of exhibitions if you follow certain golden rules. So, what are they, I hear you ask…
The six golden rules of exhibiting
1 Make an effort
Don’t be a cheapskate. Do your best to represent yourself and your business as competent, considerate and professional. With a name like Stinkyink.com we are on a winning streak from the start as it draws attention and makes even the grumpiest attendee smile (sometimes). If you present yourself well, people will respond positively.
2 Inform your customers
Let any existing customers who are in the exhibition’s vicinity know you will be there. You are much better off having a busy stand than a quiet one, and exhibitions are a great place at which to be able to put a face to a customer’s name. Offer them a drink and a cake (for instance) and explore what extra business you can do for them.
3 Be positive
There’s nothing worse than a stand where the people manning it are sitting behind their laptops or checking their Blackberries, refusing to make eye contact with the punters milling past. It is nearly as bad as visitors attending the exhibition and refusing to make eye contact with the exhibitors.
4 Set goals
We approach every exhibition with a target of generating 10 -15% of attendee numbers as ‘hot leads’ (we are told the number of pre-registered delegates). Over 25% and we are over the moon! It is an expensive proposition attending exhibitions, so make sure that the cost is recovered (and more).
5 Involve your team
And make sure you are all “singing from the same song sheet”. All team members need to know your objectives and targets for the exhibition and share in the successes from it.
6 Follow up
If you don’t have a strategy for following up leads you generate, save your money and shoe leather and stay at home. To me it’s the most critical part of the whole process. We try to convert at least 50% of the ‘hot leads’ into customers within a six-month period. The first salvo is an email to all attendees we have details of, then my sales team hit the telephones. They contact people while they still remember what they said at the exhibition. Don’t leave it longer than a couple of days before making contact.
If you approach them in the right way, exhibitions are a great shop window for your business, and here at Stinkyink.com we embrace them enthusiastically. I may be driving all over the country, but the excitement of finding the next new big customer always inspires me. Don’t forget... tomorrow, the moon!
By John Sollars of Stinkyink.com
With the reduction in small business loans offered through high street banks in these times, news of a possible Coalition scheme to offer start-ups the financial break they need, may sound like a bonus to many bank managers.
Hopefully, the Tory business bank will be offering nice promotional gifts like high street branches of Lloyds, Halifax or TSB have to incentivise the customer. At the very least they could hand a silvery pen out of it as they sign your business up for more of the government’s borrowed money from the IMF.
Chancellor George Osborne’s claim that it is "all the alphabet soup of existing schemes” should spell “the Tory way of tidying away bitterly disappointing incentives one to one giant kid’s meal, the kind that lacks XYZ of investment capital for genuine high-street money lenders at a time when the UK economy is in recession, without beans”.
The UK economy has statistically been suffering under the weather from a cloud of uncertainty forecasted by the so-called ‘big-four’ high-street Banks. A sector-based approach is a new way in which the Tories can withhold currency and lending to the banks, while having a stronghold in the business investment market and sell assets to small businesses and provide them the breakthrough that has been waiting in the wind.
Ahead of the speech, at Imperial College, London, Cable said that there was a "real shortage" of the "long-term patient capital" needed by businesses to grow. Larger businesses were "by and large" capable of raising short- and long-term finance via capital and equity markets. Meanwhile, the latest SME Finance Monitor showed that in the last 12 months, 33% of businesses that applied for loans were rejected.
Maybe it is along the path but this is still only in initial talks, meaning that the government need to open a tin of beans on-cue and finalise on its structure and offering to selected sectors, choose smaller ‘challenger’ banks and non-bank sources to take on the so-called ‘big-four’ and perform more like a business.
When Vince Cable addressed the public, the follow up indicated that it could shop around to find the tin. Smaller banking providers such as the Co-op, German lender Handelsbanken and Aldermore, are all contenders. By and large Aldermore sound like front-runners. In March, they announced their intended participation in the Government's National Loan Guarantee Scheme (NGLS) providing small businesses to borrow at a lower rate. The partnership would, Cable said, boost these smaller banks' lending capacity as well as round up existing co-investment and guarantee schemes.
Hopefully, this would lead to relief from this financial gasp and finally you start-ups out there will have the power to fulfil your destiny and have the financial backing you needs.
Recession continues to provide the backdrop for the UK economy, directly impacting the financial health of small businesses. Research shows that small businesses are more in debt now than at any time since the late 1990s. Those with a turnover of up to £1 million now owe around £1.60 for every £1 of turnover, compared with £1.17 debt per £1 of turnover ten years ago. Furthermore, the most recent figures from the Bank of England show that in the three months to May 2012, the total lending stock shrank by £3bn.
The credit crunch and recession has made securing finance tougher for small businesses, but that doesn’t mean that raising money is impossible. Banks, investors and business angels are always open to the suggestion of backing well-run businesses with a strong sense of direction and good management team.
How to prepare for funding success:
Funding options to consider:
The overall message to take away is this: whether you’re looking to acquire additional capital or fund the launch of a new company, do not give up! Achieving investment requires a little creativity and a lot of perseverance and determination, so set realistic goals and be prepared to explore several options.
BCSG creates, distributes and supports value adding products and services to small businesses through financial institutions.
‘What’s going to happen to energy prices?’ If I had pound for every time I was asked that question (or if I had the answer, for that matter) I’d be a rich woman.
It’s impossible to predict exactly how much business energy prices will go up or down by, but it is possible to make an educated guess. And if you asked me to make an educated guess, I’d say that business energy prices are probably going to go up this autumn.
Why? Well, there have been three clues:
Many start-ups are running a tight ship budget-wise, but there’s no need to panic or feel like a massive hike in your bills is inevitable - if you’re smart you can shield yourself from prices rises if they do materialise.
If you’ve already got an energy contract, check how long it’s got left to run. If it’s three months or less, you could actually sign your new one now and take advantage of the current low rates. If prices do rise in the autumn, you’ll be laughing, having side-stepped an increase in your bills.
You could also consider a two or three year contract. Long-term contracts tend to be a little more expensive than 12 month ones, but if prices are on the rise, then locking in for a long time could prove to be a very good decision, and help you to budget better for the future. If you’re planning changes to your business that would mean a dramatic jump in your energy usage but not a change in premises (for example buying a lot of energy-intensive equipment) then a long-term contract might not be the best choice, because you may need to switch to a different kind of tariff.
Finally, if you’re not in a position to switch now, don’t resign yourself to higher bills. When your contract is due to end, use a business energy broker to get quotes from lots of different energy suppliers - you could find that there are big savings to be made by shopping around.
Britain's high streets could be pulled back from the brink of extinction by a new wave of entrepreneurs. Hope for our high street is provided by new research published by Sage, which suggests that one in five people planning on starting a business would open a retail shop on the high street. That number rockets to 47% for those planning on launching a service-based business.
The YouGov Entrepreneurial Britain study was conducted as part of Sage's Discover Your Business Potential campaign and surveyed 3,329 respondents. It aimed to shed light on how many people are planning on setting up a business in the UK, where these businesses will be and in what sectors. Its findings suggest that:
High street shop closures have impacted town and cities across the UK, with an average of 14 shops closing a day at worst. The north east of England is the area hardest hit, with 15 per cent of retailers closing. However, Sage's research suggests that things are looking up for the region. The North East has the highest number of people planning to start a business, with retail again being the most popular choice (22%).
The research suggests there is light at the end of the tunnel. Everyone has business potential and it’s encouraging to see so many people set to launch a new venture in the next couple of years. Whether it's the Mary Portas effect or not, without doubt, there is hope for the UK high street.
Setting up your own business can be tricky. The amount of questions flooding your mind can be overwhelming – Who are my target customers? How much stock do I need? Where should I set up? The list can go on and on. If you're starting to give up on your dream, fear not! Hopefully, the following 10 tips might help you…
1 Make sure there is demand
Proving a service that people want or stocking items that will sell might seem like an obvious point, but you'd be surprised how often small businesses fail because they are offering something that ticks neither of those boxes.
2 Lower your expectations
Opening a business, especially if it's your first, can be a head rush. In the excitement, lots of people get too carried away to see the bigger picture. Ask yourself simple questions: Do I really need that much money to start my business? Do I really need this much stock? That attitude will keep your feet on the ground and help you save money.
3 Location, location, location
Location is a more important consideration for some businesses than others. Make sure that you're not too hard to find, or you might lose out on customers. For example, a craft shop might benefit from being located away from the hustle and bustle, but it might not suit a cafe. Think of the lunchtime rush!
4 Stake out the opposition
A spot of espionage is crucial. Find your rivals; check them out; and see what works for them and what doesn't. Then think about what you would do better, and how you can not only emulate their success, but better it.
5 Create a quality website
If your website is shoddy, people will pass by your business quicker than the tinny click of their mouse. Even if you have to pay someone to design your site, it will be worth it.
6 Know what you’re talking about
Again, this might seem obvious. No matter what you're doing, make sure you install confidence in customers by being able to answer any questions that come your way. It's a crucial skill.
7 Check out online forums
The internet is likely to be full of people talking about your area of business. Spend some time looking through posts to see if you can pick up any useful hints.
8 Go to trade shows
Trade shows are a great way to show off to potential customers. They can also be useful ways to snoop on the opposition!
9 Don’t be afraid of big ideas
Taking risks is the lifeblood of a successful business. A quirky promotional campaign or an unusual service on offer can really help small businesses find their feet.
10 Spread the word
More often than not, word of mouth can be a great way to get people interested in what you’re selling. Keep reminding your friends, parents and partner to spread the word!