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What to consider before starting a business?

What to consider before starting a business?

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There is obviously so much to think about when starting a business. If this is your first job or you are moving away from a corporate job, nothing quite prepares you for it.

It should not come as a surprise but being your own boss requires taking care of a lot of the administrative tasks - things you’d expect 10 different people to do if you are in a corporate world - now performed with a single pair of hands.

Despite its challenges, doing the “admin” side of the business is a skill anyone can learn - unlike your unique skillset that can make your business successful.

Whilst we will be covering all the different admin aspects of running a business later on, we’d like to draw your attention to 2 main things to consider before starting a business: test-proofing your business idea and preparedness for the possibility of failure.

1. Test-proofing your idea

So you have a great business idea - you are convinced it will earn you millions of pounds BUT can you prove that it will? At the end of the day, whilst you believe that your idea is profitable, you are not the end buyer of it. The best way to know if it will take off is to test it out with people outside of your family/friends circle. When running a small test of the idea you can see what actually works and what doesn’t in the open market. If it doesn't work, you will know it before you've taken out an expensive business loan and thus will be free to try out something different. “What if I can’t test my idea and can only do so when it’s fully developed?” - you might ask. An alternative way of testing your idea is to find potential buyers of your product or service. It is different to asking someone “Will you buy this product/service?” because most of the time people will say “Yes” to not hurt your feelings - you need to actually understand if the market for your product/service exists. There are a number of books on this subject, we recommend “The Mom Test: How to talk to customers & learn if your business is a good idea when everyone is” by Rob Fitzpatrick to help you prepare the right questions.

2. Preparedness for the possibility of failure (mentally / financially)

A lot of new businesses fail - it’s just a fact. As an entrepreneur you obviously feel very passionate about your idea and want it to succeed - you wouldn’t start a business if you weren’t. However, as hard as it can be, sometimes it might be there’s no target market for it or it’s not the right time or some other reason why the business does not take off. Your challenge is to find an answer if it will succeed or not without breaking the bank. For that, see the previous paragraph. If it doesn’t work out whilst you haven’t invested all your life-time savings into it, you can always move on to doing something else. Apart from a financial angle, you also need to have mental awareness of the possibility of failure. You should not take it personally if your business idea does not take off because there are a lot of factors at play for a business to succeed. It’s likely that it has nothing to do with your own skills and abilities. As an entrepreneur, it is completely normal to reach out to a support network or a business mentor to talk through what you are going through and get the support and advice you need.

Our point is that you shouldn’t feel overwhelmed by the long lists you’ll find on the Internet about a million and one things that you need to consider before starting a business. A lot of administrative items can be done in stages.

For example, you can start your business by incorporating a company and getting a business bank account (which you can do with GoSolo), later on (within the next 3 months) you can register for a corporation tax.

Once you’ve set your mind on starting a business, we can help you to work through the admin side. You can contact us to get help with questions about setting up a new business or go through business ideas. We are here to help.

By GoSolo Better Business Banking