Since the start of the economic crisis the amount of unemployed people saw a dramatic rise, with young people nearly three times more likely to be unemployed than the rest of the population.
More and more young people are using their new ideas to start-up a business but what they are not prepared for is the world of unknown when it comes to successfully building their business from the ground up. Unexpected overheads, keeping control of costs, marketing and taxes are just some of the less well-known responsibilities young people will face, but may not necessarily assign the correct priorities to which could stop any hope of them getting their company off the ground in the first year.
Here are four business elements that need to be considered if you’re looking to start up your own empire in 2016;
Expect unexpected costs
Your business will have to pay for many basic set up costs so be prepared for a lot of initial investment. Setting up a business and employing staff, creating a brand, establishing a digital presence, installing telephones for small businesses – these usually cost a lot more than you will first budget for so be prepared.
You may have huge aspirations, but be sure to keep your feet on the ground. Nobody is expecting you to start ruling the world overnight. You can smartly keep control of your costs at the beginning so you can be fully prepared for the inevitable unexpected financial outgoings. Start by working from home and building your business on a smaller scale. Renting office space is the norm nowadays, but is this cost really necessary? Consider only what outgoings you really need to be committed to at the beginning.
Any products you start selling may lead you to feeling pressured into investing a lot of money into manufacturing and maintaining stock however you leave yourself open to the risk of being left with items you can’t sell. Make sure you regularly access the levels of stock you need whilst also meeting customer demands and arrange a schedule with your supplier that meets your requirements.
There is huge amounts of free resource available to help you understand and learn all the skills within the digital world. For example, the British Library’s Business Centres offer free access to market research reports, company data and more.
To establish a digital presence you no longer need to hire a web developer or design agency to build you a website. There are plenty of free platforms available now which require no coding or design experience whatsoever. Platforms including Wix and Moonfruit have drag and drop features, and WYSIWYG (what you see is what you get) web editors so you can customise any template to look exactly the way you want it to. Some elements to setting up a website can become tricky, but there are hundreds if not thousands of online tutorials to assist you in every step.
Many other websites offer for free or a very little cost other assets for your online presence including free stock photography, themes, fonts and icons.
Business structure and taxes
When setting up a business and going self-employed there are a few different structures to choose from; you can function as a sole trader but other options available to you include partnerships or setting up your own public limited company.
As with anything, each structure comes with its’ own pro’s and con’s, benefits and limitations, and will need to be considered before you make any executive decisions. For example, do you go VAT registered? Weigh them all up and then decide which are relevant to you before making your decisions.
To satisfy the HMRC you need to keep a complete record of everything financial related. You will need either an accountant to sign your books for you, or you can complete a self-assessment you can send to HMRC. Accountants can become pricey, but if you can get a good one, they will save you a lot of headaches down the line. It is certainly something that should be considered in the early stages of your business venture.
As well as income tax, expenses, national insurance, tax credits and benefits, you will be responsible for health and safety in the workplace, employment requirements, fire evacuation procedures and anything else that might be applicable to your business.
The worst thing you can do is think you have got a handle on everything, as there will always be changes to tax law that occur regularly. HMRC are now giving most taxpayers a digital account which will need to be updated every quarter, rather than at the end of every tax year. This is just one change that you can be sure many people are not even aware of.
Manage your reputation yourself
To be successful you need to be proactive. You won’t need to hire an expensive agency at this stage, you can start building your brand by seeking out people who can evangelize your new business to other influencers. Web traffic through social media is as big as it has ever been, and by creating positive influences you can start to yield a significant following online. You want these people to tweet, post, share reasons why you are the best choice for your market niche.
Building great relationships with influencers at this early stage is what separates the good start up businesses from the ones which achieve abnormal results within the first year. Once you understand who a4re now essentially your brand ambassadors, continuously offer them the chance to be the first to review your new products. Thank them for their loyalty by including them in your growth. Take them on your journey. Do whatever you can to get them excited, but feel valuable as well. If they are on your side, they will generate you more traffic online which will convert into more leads for a sale.
Your goal is to increase your ROI so getting the most out of your investments is critical within the first year. For your small business. If you do choose an agency to create your reputation and conduct your brand management, the number of social followers you obtain shouldn’t be one of the key performance indicators. It should be measured with engagement metrics. The quality of your social following should be considered before the quantity. Before agreeing any agency fees, be sure to scrutinise your websites engagement metrics to understand how these stats can improve your ROI.
Depending on your target audience you may wish to budget for traditional advertising, so ensuring your educated about the various options for both print and digital marketing channels will help steer you in getting the most out of your spend. There are thousands of free resources online including guides that can help you to understand the data behind advertising.
Lastly, make sure you enter yourself for relevant awards. This will build your authority in your industry and will of course generate you more leads and sales should you win!