What you need to think about before setting up your own business
PUBLISHED: 11:37 01 July 2018 | UPDATED: 12:32 01 July 2018
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If you want to follow in the footsteps of our Future50 members by setting up your own company, Gareth Jooste, small business area leader for Barclays Eastern has some advice.
Some people like having a boss – others like being the boss.
Running your own business can be exhilarating and terrifying in equal measure but more and more individuals want to go it alone.
So what do you need to do before taking the plunge and going out on your own? Preparation, preparation, preparation!
• Ask yourself, have you got what it takes?
You will need initiative, determination and persistence, resilience and a willingness to take personal responsibility for your successes and failures.
• Develop a comprehensive plan
Although this does not need to be a formal document, you do need to plan how you are going to tackle all areas of your business. The plan should then act as a guide and measure your progress.
• Research your market
Make sure you understand what market you are in, who your competitors are, why a customer should buy from you rather than your competitors and whether the market is growing or declining.
• Take advice
Make sure that you take advantage of the extensive advice available from business support organisations. The majority of assistance provided is free and these organisations have the experience of seeing hundreds of business plans every year.
• Recruit the right staff
Small businesses, with limited financial resources, have to rely heavily on the quality of their people to provide excellent service and to differentiate themselves. Ensure that you take time to select the right employees for the job. Once recruited, you will need to practice delegating effectively and ensure that staff are adequately trained and developed.
• Finance appropriately
Ensure that you have the right balance of funding, including risk capital and long term loans, to finance the business as it develops. Bank overdrafts should only be used for short-term or seasonal requirements.
• Stay in control
Don’t let the business outrun your ability to manage it or your resources to finance it. Make sure that you manage carefully your debtors and creditors and don’t be tempted to overstretch yourself or your business.
• Remain aware of market changes
In the event that your regular monitoring of the marketplace identifies a particular threat or opportunity, your plans must be flexible enough to allow you to change direction. All business plans should be working documents and will always need to be revised in the light of experience and/or competitor actions.
• Set appropriate prices
A sensible pricing policy is vital to success. It is important to understand your own break‑even point and your competitors’ prices and set your own prices accordingly. It is essential to price for profit, as selling at the cheapest price alone is a poor option.
•Take a long-term view
Above all else, you will need to start your business with the right attitude. If you want to develop a successful and growing business, it is essential to borrow long-term, to re-invest profits and to train and develop employees for the future. The view should be to building a successful business for the future, rather than purely for short-term survival.