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Tuesday, June 28, 2022

Are you ready to start a business? 11 questions you need to ask yourself | Follow your passion

1 Why do you want to start your own business?
Before splashing out on embossed business cards and fancy office furniture, it’s worth doing a little soul-searching. Sleepless nights and nailbiting panic are all features of the first few months as an entrepreneur, and could stretch finances and push relationships to the limit. The good news? An unbridled passion for your product or service will override all this. Focusing on your interests is a good start: businesses such as Harley-Davidson, among many others, were born after the founders decided to monetise their passions.

2 Are you ready to become a business owner?
Don’t tell your boss where to stick it just yet. Take around six months to develop your product or service, build your website and line up initial clients. Learn as much about your market as possible: can you freelance or volunteer somewhere to find out more? Start saving too, to give yourself a safety net while you get your business off the ground. If your living room is submerged in postal sacks and cardboard boxes by the end of this six-month period, it’s a sign your burgeoning business is going well.

3 Who’s your target audience?
Determining the demand for your business is much easier if you have a customer in mind. But what does this mythical consumer look like? How old are they? Are they local or international? More crucially, how can your product or service make their lives better?

4 Have you researched the market?
Now’s the time to take a deep dive into the market, identifying any trends by scouring through trade publications. Have a squiz at possible competitors: how can you differentiate your offering from theirs? You can also test your business. If you have a food product, for example, try selling an initial batch at a local market, asking customers about their likes and dislikes.

5 Have you got a website?
Thankfully you don’t need an army of designers and SEO experts: GoDaddy can help you create a slick-looking website within minutes. Whether you want a minimalistic homepage with skeletal contact details, a flashy e-commerce supersite with payment portals and shopping carts, or just somewhere to host your thought leadership blogs and videos of your cat, GoDaddy’s Website Builder service will tailor your digital offering towards your customers’ needs, and sort your SEO too.

Prices start from £5.99 a month, which includes 24/7 support from GoDaddy’s team of web professionals (yes, even at 3am). Meanwhile, its e-commerce model (just £15.99 a month) will enable you to accept credit card, PayPal, Square, Stripe, Apple Pay and Google Pay payments, plus set up free shipping options.

6 What’s your business plan?
A business plan will provide you with a blueprint to gauge how your business is performing, plus help attract investors or even secure a loan. A typical business plan includes a description of your business, any goals or targets, an overview of your customers, competitors and the market, your marketing and promotional strategy, plus any financial forecasts. GoDaddy has a guide to writing a business plan here.

Two silk screen workers showing their workshop
Getting your finances in order will help with expenses such as premises and equipment. Photograph: Morsa Images/Getty Images

7 Have you got your finances in order?
About 60% of small businesses go bust within the first five years, with lack of cashflow being a prime culprit. Try to set aside at least six months’ living expenses before quitting your day job. Calculate any costs: how much do you need to develop your product and buy stock? Will you be buying equipment, such as computers? Renting an office or WFH? Although understanding a profit and loss statement is a huge help, cloud-based accounting software such as Xero, QuickBooks and FreeAgent are easy to use. Also consider hiring an accountant, who’ll inform you what expenses can be claimed for things such as equipment and property.

8 How will you fund your business?
Splurging through your savings is one way of bankrolling your business, as is begging your bank for a loan or writing to all the rich people you’ve ever met.

Or you could consider alternative funding. The state-owned British Business Bank offers loans of up to £25,000, along with mentoring and advice. Local authorities and agencies also offer grants, such as those issued by Local Enterprise Partnerships. Peer-to-peer lending sites such as Funding Circle can connect you with private investors, while the UK Business Angels Association has a directory of angel investors. Don’t forget you could also raise money from the public by pitching your business idea on crowdfunding platforms such as Crowdcube or Crowdfunder.

9 Do you know how to market and promote your business online?
Businesses no longer need bank-draining budgets or to fire off 200 tweets a day if they want to plug their business. The GoDaddy Websites + Marketing service can help establish your presence on Facebook, Google (including Google Maps) and Yelp. It’ll also assist with email marketing (a great way of communicating and upselling to existing customers) and help navigate the social media minefield. Above all, it can generate sales: Websites + Marketing customers see an average increase of 18% in business revenue within their first year.

10 Have you registered your business?
You can register as either a …

  • Sole trader. A straightforward choice involving less paperwork, it’s ideal for freelancers and one-person bands. Sole traders register with HMRC and file a self-assessment tax return every year.

  • Limited company. As a limited company your business will seem more credible and there are tax benefits too. But there are added reporting and record-keeping responsibilities. You’ll also need to pay corporation tax on your profits. Limited companies register with Companies House.

11 How will you target your customers more effectively?
Finally, GoDaddy Insight is an AI-powered analytics tool whose algorithms help businesses accurately target customers who will be interested in their products by analysing data from a business’s website traffic, online sales and social media activity.

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