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8 Things Every Entrepreneur Should Know Before Starting a Business

new businessGetting a new business off the ground is dependent on a number of different elements, so an excellent understanding of these is essential before you carry out your company registration. As it is common for entrepreneurs to start up without this vital knowledge, let us put the spotlight on some of these crucial factors.

Number 1: Do Your Research

Any good entrepreneur always undertakes substantial research on the industry they are going to be working in, a decent period of time before they form a company. This overview ensures that they have an in depth understanding of every angle, including its history and the competition, and can help them achieve the best possible results. British Business Energy founder, Ian Wright, makes the point that: “just because you have a brilliant idea does not mean other people haven’t also had the same idea, if you can’t offer something better and/or cheaper than your competitors, you might want to rethink starting a business in that area”. Making a study into the demographic you are targeting is also essential, as obviously, your company will not last without sufficient consumers.

 Are you able to define who your ideal consumers are? Who is in need of what you are selling? – You must ensure that you go to market with a product or service that customers are likely to want. Lakhany Law, solicitor, Sonia F. Lakhany, offers this important guidance: “it is crucial to make sure you are delivering what your customer wants, not what you want,” this will give you insight into your customer’s buying decision and save you lots of experimenting down the road.” Further, are you catering to a niche market? –

There are no guarantees that anyone will buy what you have on offer just because you sell it, or have it manufactured yourself. Is the current market already saturated with your service or product? Is the market restricted to the UK, or can you sell to other countries? Prior to forming a company, you must be able to answer all these questions. The fact of the matter is that countless entrepreneurs discover that the audience they are targeting is far too limited to make a success of the business they choose, and that there is not enough market share for them to capture, after they have lost a lot of time and money in the process. 

Number 2. Choose An Appropriate Business Name 

A good deal of thought needs to go into deciding on a business name. – Be mindful of the fact that this is what consumers in the UK, and possibly in other parts of the world will call it, so anything that does not roll off the tongue, or is complicated should be avoided. Names that are difficult to spell, should not be used either, because for example, someone may google your company name, and because they misspell it, give up, and go to another company. You may also want it to reflect in the name, what your business offers, for example, UK Blockchain Advisers Ltd.  If you can go for the right name, it can resonate extremely well with potential customers.

The best course of action is to compile a list of suitable, easy to remember, catchy names, and then ask different people, especially other business owners, what they think of it. Remember that just because you think a certain name is great, does not guarantee that a high percentage of others will. You also need to  think about whether the name you decide on will be suitable for a web domain.  Then, once you have chosen a name you are happy with, you can check whether it’s available using a website like 1st company formations.

Number 3: There Is No Such Thing As 9 to 5

This engrained time schedule virtually goes out of the window when it comes to taking on the role of an entrepreneur.  This is particularly the case if you are dealing with other countries such as the US. Allen Shayanfekr, co-founder and CEO of Sharestates, is an expert in this field. He notes that: “there is always another email to send, problem to solve, or deal to close. For example, at [our company], we are very relationship driven. This inevitably means hosting dinners, lunches, and calls with our clients at their convenience.”[1]  Shayanfekr also states that one of the main drivers that has brought success to his company, is the business relationships that he has nurtured outside  regular 9 to 5 office hours. So, be mindful that you are heading for failure if you start up a new company, and believe that everything you need to oversee can be dealt with in the confines of an 8 hour time span very day.

Number 4: Take On The Right People

Firstly, it is crucial that you employ a robust team (one of whom should be good at tech, such as setting up and managing websites); and if necessary, an experience manager. So many entrepreneurs lose their business because they do not do this. As Shayanfekr states: “your operations team should be responsible for ensuring that all company processes are effective. Without a solid operations team, the inefficiencies from department to department will end up costing much more in the long term.”

Number 5: Get a First-Class Solicitor

Having success after you have made your company registration is dependent on various factors such as the founder, the industry, and the need in the market. If you have a good vision of what is achievable, work hard, and lead with honesty and integrity, then you will drive your company in a good direction. It is also very important to have a meeting with a top solicitor in the field, who can advise you on various regulations that are in place, and ones that are expected. Having this knowledge is crucial, and being able to contact the specialist solicitor who you have already consulted with, when something of concern arises, and you need immediate answers, is fundamental to the prosperity of your company. Before you begin your business, you also need to be aware of its the legal structure that you will be adhering to.

 Number 6: Register With An Accountant You Find Helpful

 Just hiring any accountant you have seen advertised without sitting down and having a meeting with him or her, is not the way to go.  Accountancy in business is a very serious matter, and you need to find an accountant who is helpful, and who you can speak to over the phone, whenever you need urgent advice.  He or she will help you set up: “bookkeeping and other record keeping procedures that can keep you on track for years. Most important, a good accountant will help with tax planning.”

 Number 7: Every Pound Counts

It is a falsehood to think that you will automatically be successful at raising capital as soon as it is required. Moreover, you have to have a very good credit score. As there is a lot of volatility in the capital raising environment, the best way to overcome needing a raise, is to look for the shortest path to becoming profitable. And if this strategy means that the company’s growth will be slower, then so be it. As is an extremely hard and long-winded process to drum up capital, so it is crucial to make every pound count. Shayanfekr’s real estate company, Sharestates, got off the ground in 2014, with a family loan of just $25,000. Since that time, it has amassed in excess of $200 million in loans to buy real estate. This has made the company work to secure an investment return on every expense. So, until your company is in the position to successfully raise capital, ensure that you regularly review each department’s spend so that you maximise every single pound.

 Number 8. Get All Necessary Licenses and Permits

 Depending on your industry, you may require a business license, as well as additional licenses. Many businesses need licences if they manufacture particular products, or operate in certain sectors, and you need to research what is required long before you form a company. This is because it can take a lot of time to process the necessary paperwork.

 In summary, these eight points are extremely important, and if you do not take necessary action, you could end up like the countless entrepreneurs who have learned the hard way after they failed, and in many cases, lost a lot of money in the process. However, if you have taken the 8 points seriously, you will find yourself in a business-ready, confident position to drive success for your new company.