Starting and running a business can be like riding a roller coaster—there will be ups and downs along the way, but in the end, you'll be glad you took part.
With our many years of experience, we've helped clients grow from humble beginnings into successful businesses. We've compiled our top 5 tips for setting up a business, which we hope you find useful, especially if you have a great idea or product that you're considering turning into a business.
1. Research and Feasibility Study
Before investing your hard-earned money into any business, you need to research your product and its market. From this research, you'll develop a feasibility study that outlines the following:
- The Product/Service
- Customer Base
- Suppliers
- The Competition
- Pricing Strategy
- Marketing Strategy
This feasibility study will help you determine if you:
- a) Have a viable product.
- b) Have a market that needs or wants your product.
- c) Can compete in the existing market.
- d) Can afford to go ahead with your plan.
2. Business Plans and Cashflows
Once you've determined that you have a viable product or service, your next step is to draft a business plan. Seeking professional advice when drafting your business plan is advisable, as this document will be presented to potential investors or financial institutions, and it needs to stand out. A good business plan should include the following:
- Executive Summary
This provides a summary of the product and promotes its Unique Selling Point (USP). - Background
Outlines your experience to date, giving investors confidence in both your product and yourself. - Business Proposal
Details your strategy to develop your idea or product into a successful business. - Competition, Market & Product
Offers a brief outline of the market and where your product fits. This section should also promote the USP of your product and its advantages over rival products. - Finance
Includes cashflows and financial projections outlining your projected sales, costs, and financial requirements for the first three years. When completing your projections, remember to be realistic—wishful thinking can be counterproductive. Our recent blog on Goal Setting might assist you in developing your business plan.
3. Financing Your New Business
With your business plan, cashflow, and financial projections complete, you can determine when your new business will break even and eventually turn a profit. However, before you start making profits, you'll need financing to get through the startup phase. If you don't have a lot of spare cash, don't panic—there are plenty of financing options available, including:
- Micro Finance
- Enterprise Ireland
- IDA
- Raising Equity / Private Investors
- Bank Funding
We plan to cover these options in more detail in next week’s blog.
4. Choosing Your Legal Structure
There are three main legal structures to choose from when setting up your business. The structure you choose will depend on your attitude to risk. It's advisable to seek professional advice from your accountant or solicitor when deciding which legal format to establish. The options available are:
- Sole Trader
- You make all the decisions.
- Your personal assets may be at risk if the business cannot pay its debts.
- You retain all profits.
- Profits are taxed through Income Tax and the Self-Assessment System.
- Partnership
- You share decision-making with your partner(s).
- Risks are shared between the partners.
- Profits are shared between the partners.
- A partnership agreement should be drawn up.
- A Company
- It is a separate legal entity.
- The company is owned by the shareholders.
- Shareholders' liability is limited to the share capital they have subscribed to.
- The company must submit an Annual Return to the Companies Registration Office each year.
Having a good support team is crucial, especially if you're the primary decision-maker. A reliable accountant who provides objective feedback will serve as an excellent sounding board. A professional advisor can assist you with tax registration, company formation, business plan preparation, financial projections, cashflows, bookkeeping, and more. You might even consider outsourcing your bookkeeping to your accountant, allowing you to focus on what you do best—running your business.
5. Networking and Marketing
With your product, research, plan, and finances in place, it's time to tell the world about your amazing new product or service. One of the best, often free, options is attending networking events. These events provide opportunities to meet like-minded individuals who have faced similar challenges and obstacles. Listening to and learning from their advice could help you resolve your own challenges more efficiently. The Small Firms Association (SFA) or your local Chamber of Commerce often run informative and free courses for small business owners.
While the above 5 tips will be key when setting up your new business there is one further trait that you will need, commitment! Setting up your own business is a big challenge and not one to be taken lightly. Your business won’t become profitable over night and you will need to make many sacrifices to see your dream become a reality. However, with the right tools, goals, plans, team and support it can happen.Â
