BLOG: Top tips for wannabe business owners
According to the Department for Business Innovation and Skills, SMEs currently make up 99% of all businesses in the UK, contributing £1.2trn in turnover during 2014.
So with the economic recovery now in full swing and interest rates remaining at a low level, more entrepreneurs are able to get the necessary funds needed to start their own businesses. In fact, over 54,000 new businesses were started in 2014 with the trend expected to increase even further for 2015.
But where do you start? Many individuals find starting their business an intimidating and daunting process but it needn’t be. In the spirit of Small Business Advice Week, we’ve compiled some tips for businesses owners. We’ve also included tips to help your business, once started, grow and develop over time – after all this is a huge investment in your future.
Sounding out the idea
First things first, sound out your business idea with the people you trust the most, your friends and family. Pitch the idea to them and really try to sell it because chances are, if they’re not keen on your idea or product then the rest of the market won’t be either. Make sure to take advantage of any friends with relevant experience too, as they may be able to give you a better idea of what works and what doesn’t. It’s important to remember many of your first ideas won’t work, but don’t get discouraged by this. Instead, try to find a way to tweak your idea so that it does.
Write a business plan
It’s important for business owners starting out to outline a detailed plan, not only for initial funding but for future planning as well. You look to the future in your personal life, so why wouldn’t you with your business plan? Think about where you want to see your business in five years’ time and set realistic goals to achieve these ambitions.
There’s lots of support out there on how to write a good plan, start by looking online for free tools. We have a section of our website dedicated to helping start-ups throughout this process.
Plan your finances
This may seem like an overwhelming task for budding business owners but it’s one of the most important things you’ll do. As a start-up you need capital to invest and grow your business so choosing the finance to help achieve this is vital.
Unlocking cash is key when starting your own business. Yet money is often tied up at first in leases, employment costs and product expenses. You should set aside enough money to grow your business after you’ve got over the initial bump. But there are a range of asset based lending facilities out there, perfect for firms looking for a quick cash injection to give your business a boost when it needs it. This lets the SME borrow money against the value of their current assets, allowing them to invest in new product lines, workers or new machinery to grow their business.
An advantage of pursuing bank funding to help with this is that there are a range of options available tailored for SMEs, rather than just a one-fits-all offering.
If you’re unsure of the next step for your business or whether you need funding, it’s important to seek external guidance from experts. Don’t be afraid to ask for help, it’s not a sign of weakness. Quite the opposite. As a successful leader it’s important to seek continual feedback, enabling you to see where support is needed. That’s why it’s important to consult others. This can involve getting that help from your loved ones, but it can also involve seeking guidance from other business leaders and professionals.
At Lloyds Bank, we’re lucky enough to see countless success stories of SMEs that tell us they owe their thanks to enterprise mentoring support. We know that start-ups in particular have a one in four better chance of surviving and thriving over three years if they have a mentor. All across the UK, companies have pledged people and time to help mentor small and medium sized enterprises by providing expert guidance.
Owning your own business should be fun. Of course there will be times when the pressure is high but it’s so important to stay excited about what you’re creating and keep in mind that this will be beneficial for years to come.
Whether you’re planning to start your own business or take on a new venture, it’s important to fully explore the support and funding options available to you – there’s so much out there!
Paul Evans is area director for SME Banking in Central London, Lloyds Bank Commercial Banking