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10 steps to starting a business

Some of the things to consider when starting out with your own business

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If being your own boss is the dream but are not sure what business to start there are many options open to you but you need to ensure you know something about the business you decide to undertake. You need to consider the lifestyle you have, your family commitments, the time you can commit to the idea and the funds you might need to start the business and get it up and running.

You should also consider your motivation and be aware of what you are getting into, don’t let your heart rule your head.

You can run your business as a part-time option, which is always good for testing the water and supplementing your current income but be sure your existing employment allows you to do that.

Sometimes you will get the chance to buy the business you are working in or get the chance to buy an existing business that has come up for sale. This can reduce your risks going forward but again it could cost a substantial amount of money. Make sure you get to see the books going back at least three years and get an independent valuation of the business from a qualified accountant.

Franchising can be a good option if you are nervous about starting an enterprise as you will then have all the support needed to run the business and someone to talk to if you have any worries. However, you will need a reasonable sum of money to buy the franchise and you will need to meet targets to make your new business viable year on year.

If you want to start from fresh there are many business options. You can start from home and it is perfectly possible to start a business as a sole trader with very little outlay. If you have a tech background you can start a business using a laptop and working from home. We have a whole range of Guides available on a massive range of businesses which can help you develop your ideas. See our Resources section for more information.

First of all, you need to decide if you are going to run the business as a Limited Company or as a sole trader. There are benefits for both so do some research before you decide. Cost could be a factor here for some and of course the size of the business you are planning to set up. You can always start as a sole trader and go Limited further down the line.

Do your research. Is there room for your business in the market place?, Can you run it from home?  Can you afford to fail? Do you need any permission? There are whole raft of things you need to consider.

Have you got a business name yet, got a logo? This will be the way people will remember and is vital for the future of your business.

Develop your business plan keep it flexible. It is your road map and will your guide as your business develops.

We have Guides we can send you to help develop the plan. Keep it short, five pages’ tops with an executive summary at the front. You may need one for the bank or an investor, if you are seeking finance.

Protect your name as best you can, register a domain so at least people can’t copy it, see if the logo is “trademarkable”. Secure your social media presence on Facebook and Twitter.

Consider your finances and how much you can afford to spend on the idea. Consider how you could cope if the business didn’t take off.

It is well known that it isn’t easy to get a bank loan these days. It can even be difficult to get a business account. Much will depend on how much you need to borrow but the bank will want to see that you investigating a chunk of your own money before they will consider lending you any funds. If the amount you need to borrow is relatively small you may be able to look for a personal loan to secure the funds.

Friends and family are more and more becoming a source of finance but treat the loan as a business loan, the last thing you will want is to let your family down and cause disruptions between your nearest and dearest. Do not risk your house or your family’s house.

Angel investors are increasingly becoming a good source of funds and Startup Guernsey are looking to develop an Angel Investing network to help you gain access to this source of funds. Consideration is also being given to a fund of some kind which could provide monies for certain types of business.

Crowdfunding is also possible but some schemes don’t operate in Guernsey. Check out our Finance Guide for more information.

You will need to talk to a company formation agent to help establish a limited company. Costs will be anything from around £650 to £850 to get started. Annual costs will be around £350 a year going forward.

If you are going self-employed there is no startup costs but you will need to ensure that Income Tax and Social Security are aware of your change of circumstances.

You will need to get yourself a business bank account and insurance. Don’t start work, particularly on other people’s property before you get yourself good insurance cover.

If you need equipment, consider leasing against purchase to cut down on your initial outlay.

If you are a one-man band you should think about getting a virtual secretary to ensure you don’t miss calls and potentially lose business. If you don’t get a virtual secretary get a good voicemail message. Nothing is more frustrating than not being able to talk to someone when you are looking to employ them or purchase a product from them.

If you need premises make sure it is the right user class and don’t sign anything until you have confirmation you can use it for what you want. If you are looking for retail premises remember the mantra, location, location, location. Study footfalls and parking areas and if you are going to rely on passing trade be sure you are in the right place.

If you are planning on being a destination shop, then make sure people can park easily to get to you premises.

The Digital Greenhouse can also offer you great premises to work from and a ready supply of entrepreneurs to talk to. Using the space starts at an affordable £10 a month so if you need space to work from and your business is on a laptop this could be a great location for you in the centre of town.

If you are starting a mobile van business, you can’t park wherever you want. You need permission, you will probably need to pay rent. If you are selling food you will need your van inspected by Environmental Health and you may need planning permission. There is a raft of similar requirements for most businesses so make sure you understand what they are before you get started.

If you want to play music to you staff or customers, you will need a PRS licence. A kitchen needs inspecting and electrical equipment could need testing. Health and Safety may be involved, employing staff may mean you need to talk to the Industrial Relations department and if you are producing food labelling is vital.

If you have a Limited Company, you will need to employ an accountant and need to ensure the business is properly updated through the Guernsey Registry every year and whenever changes are made.

As a Director of the business you have responsibilities and failure to keep the company details current can result in substantial fines.

If there are any financial aspects to your new business you will need to check if you need to be regulated by the Guernsey Financial Services Commission.

Check out our Useful Resources links for more information.

It is vital that you have adequate insurance to cover the activities of your new business.

Public Liability is key as you will need to be protected against claims against the activities of your new business. Employee liability insurance will protect you against any injury to your staff.

If you are a one-man band you should consider Key Man insurance which will give you an income in the event of an injury which results in you being unable to work.

Don’t forget to insure your kit and stock. Also if you are using your vehicle for business make sure you include business use under your insurance cover.

You can find more information on insuring your business in our Resources Section.

The secret of a successful retail business is not the selling; it is the buying. If you can source products at a good price, then your profit margin can be more substantial and help your business succeed.

Look at margins, try and do some research, consider sourcing from overseas and look for things which are new and interesting for local people to purchase.

Try and get exclusive deals if you find something new so your competitors don’t end up selling the same products. Look for good payment deals so hopefully you can sell the product before you have to pay for it. Beware of buying ranges of the same item as you can end up with sizes that don’t sell and quickly go out of fashion.

Always look for new items as novelty and fashion can change. Go to trade fairs to see the latest offerings. Also beware of bulk buying, just how many people in Guernsey will want that item.

Watch for fads and surf the wave if you can get in there fast. Look for niche areas like locally produced items that become fashionable to enjoy.

Remember, just because you like something, it doesn’t mean everyone else will like it too.

Employing staff is probably the biggest and most important step you will take. Often they will be the face or voice of your business so you need to get it right. First impressions will count for a lot but do your research. Google them, check references – loads of people don’t. Ask friends if they know them and look at their social media profile.

Write a good job description and make sure you spend a good hour or more with them before you make a decision.

Think about succession planning. It may be that the person you employ will be the person who runs the business one day.

Look for skills you don’t have. Often a small team will succeed because the boss very cleverly surrounded themselves with the people who made the business a success. You may also consider tying them in to the business by giving them a share. After all you don’t want them becoming your competitor!

You can find more information and advice on employing staff in our Resources Section.

Set some money and time to one side for marketing. A colleague once said there will be 5 key people you will meet who will help make your business a success. These may be other business who will sell your product or use your service. It may be people who will help spread the word.

You need to let people know what you are doing. Selling yourself can be the hardest thing to do but don’t be modest.

Word of mouth is vital on Guernsey but it’s a good idea to produce some business cards for new contacts.

A social media presence is becoming more and more the norm.

Create a website as people will Google you and your service/product.

If you have a craft style product look for people who will sell it for you. Attend the shows and Seafront Sundays. Anywhere people gather is where you need to be.

Think about your perfect client and work out where they will be. Basically profile them and think about what they would be doing each day so you can see where you can “intercept” them. For example, if you are targeting Mums, the Island Mums website may be a place for you to advertise.

If drivers are a likely source of sales, consider bus advertising and radio advertising. Ask if you can leave your cards at local garages.

Consider joining groups like the Chamber of Commerce, IODYBG, CGi,  B48 club, WDF or attending the Busy Guernsey Bee networking events. Networking can be a vital source of contacts and business. Check out our Resources Section for more tips on building your network.

Startup Guernsey should be your first point of call when you are considering starting a business. Call us on 710043 or email [email protected] and we will arrange a time to meet up and talk about your business ideas.

We are based in the Digital Greenhouse in the centre of town so are easily accessible.

Our service is free and confidential and we can meet up as many times as you like. If you would like a mentor to help you with the business, then we can arrange that too.

There is no need to do this alone so talk to us, talk to friends and family. Talk to your accountant. In the early years there are many people who will be happy to help you get started in business.

Read stories of business success and talk to local successful entrepreneurs. Check out our startup Case Studies. Go to events and pick up knowledge and contacts. You can join our Newsletter so you keep up to date with what is happening. Many events are held in the Digital Greenhouse so join their newsletter too.

Running your own business is a 24/7, 365 days a year activity, especially in the early years. You will always be learning, you will make mistakes and you have dark days but if you talk to other people, it is more than likely that they too have had the same experiences. You are not alone. Talk to Startup Guernsey and we can help you get your business off the ground and provide you with excellent advice and useful contacts.

Good Luck.