Smart steps for starting your own business

Many people dream of working for themselves. The transition from a salaried job to self-employment can be a tricky one, with both risks and potential rewards.

Here are some steps you can take to make this transition as pain free as possible, particularly financially.

Start slowly

Be realistic about your business prospects. It’s unlikely you’ll have a thriving, profitable venture on day one, or even on days two or three. To maintain your financial security, you may need to work part-time for an established firm and build your new business on the other days.

This approach will enable you to cover your personal expenses while you develop your idea in a sustainable way.

Build your networks

Before you launch your business, you’ll need to do substantial groundwork. Part of this involves establishing networks of potential clients and referrers who can spread the word about your business and accelerate its growth.

Networks take time to build. So, from an early stage, communicate your business plans to key people, including through marketing materials and social media. Consider using incentives to drive referral networks, and leverage word-of-mouth opportunities among trusted colleagues to increase awareness of your business.

Take time to get the figures right

Starting a new business is complex. There are many things to think about, particularly around your costs. From the outset, you should have a good understanding of potential expenses so your business doesn’t fail before it starts.

Your costs may include the following:

  • market research
  • business name registration
  • consultant fees (such as accountants and lawyers)
  • insurance (public liability, professional indemnity)
  • inventory and raw materials
  • stationery and office supplies
  • advertising and marketing.

Keep in mind that your revenue may be relatively low (even zero) for some time. If you can accurately estimate costs, you can keep a close eye on cash flow to ensure your fledgling venture remains sustainable.

Secure a business mentor

Leading business figures such as Apple’s Steve Jobs and Virgin founder Richard Branson called on business mentors to help them develop their ideas. Sir Richard said, “Someone, somewhere, has already been through what you are convinced nobody else has ever confronted!”

Consider people you could call on in both the short and long term. Given the variety of potential challenges, it may be valuable to have a network of professionals, each with specialist expertise. Their advice could be the key to your new business’s success.

To know more about hiring your first employee, you can read: Hiring your first employees: What you need to know

We understand the transition from salaried work to self-employment can be a challenging one. We’d be happy to discuss how you could  make the change while preserving your financial security. Please contact us for more information.