Start your dream business this year

Sarah Coles
Start a business
Start a business

You've spent far too long working for the man. And while you've been keeping your head down, and grinding out your 9-5 job, in the back of your mind you've been dreaming about running a business of your own one day.

Of course, there's a huge gulf between having a brainwave about the kind of business you'd like to run, and actually striking out on your own, but it doesn't have to be insurmountable. With the right approach you could establish a business of your own by the end of this year.

1. Think clearly about your idea

We all have vague notions about opening a shop, selling our services, or inventing a must-have gizmo. However, before you take the first step, you need to think very clearly about the reality involved too. You need to be confident about negotiating with suppliers, handling sales, and possibly dealing with employees. You need to think about the lifestyle involved too. It's not an easy life - especially in the early years.

2. Register your intellectual property

This particularly applies if you've invented something and you don't want anyone else to copy it. The government runs an online service to allow you to apply for a patent. It also runs through the rules regarding copyright, so you can protect your ideas before you decide to build a business around them.

3. Do your research

Research the idea itself. Talk to people who would qualify as potential customers, and find out whether there's a call for the product or service you are offering. This gives you the chance to refine your idea, or develop the product, until you get to the point where you are sure there is a demand for it.

At this point you should also choose a name, consider a logo, and register for a website. Don't spend too long agonising about the logo and the branding at this very early stage, as you can refine it later, but you need a name and a website, to make sure someone hasn't already got there first.

4. Find partners and suppliers

If your business involves making something, you need to be clear about the approach you want to take. Is this the kind of low-volume business where you intend to make everything you sell, and sell everything you make? Or will you need to work with partners who can take on the manufacture, the business administration side of things, the selling process, the distribution, or the wholesale export. Think about your strengths and weaknesses, and whether you need people on your team to fill the gaps.

You also need to consider how you are going to source the raw materials, or the items you plan to sell. You need to draw up a list of potential suppliers and speak to them to make sure they can deliver what you need, negotiate prices, and build a relationship. Part of this process is to establish payment terms - so how long you have in which to pay, and whether you can secure discounts for buying in bulk or paying early.

Finally, you need to think about premises. Will you need to secure your own manufacturing facility, warehouse or shop? How are you going to do this, and how much will it cost you?

5. Write a business plan

This may not be anyone's idea of an exciting way to strike out on their own, but it's vital to bring together all your thoughts and plans to check they will work. It's also an important process if you want to secure funding, or attract partners or employees.

You need to sum up the customer need you are meeting, and how you will meet that need while also making a profit. You should be able to input all the costs you have researched, and the payment terms, and identify how you will make a profit.

It covers all the sorts of things that come up in the Dragons' Den - your objectives, strategies, sales, marketing and financial forecasts.

The government has template business plans, and you can get help on completing them from a number of sources, including startupdonut or businesslink.

6. Establish the legal business

Again, this is the kind of admin that most would-be entrepreneurs are trying to avoid, but it's the only approach that works if you want to make money. There are a number of possible legal structures, including being a sole trader, a limited company or a business partnership. The approach that suits you will depend on you and your business. It will dictate how much paperwork you have to do, and will also establish how much protection you have.

If, for example, you are working as a sole trader, you will be personally responsible for any loses or legal issues. A limited company, meanwhile, needs shareholders and directors, and must follow rules about the running of the business, and the paperwork that has to be submitted, but you are not personally responsible for losses - as long as you haven't broken the law.

Before you start selling anything, you also need to register for tax, and for VAT if you expect to take in more than £81,000 a year. And before anything else, you need to be fully insured for the business, the people and the premises. If you plan to employ people, you need to understand your rights and responsibilities as an employer too.

There are people who can help you with this side of things, including lawyers and accountants, who are worth considering to make sure you take the right steps at the outset.

7. Secure funding

This might be something you can fund yourself from savings, or you might want to operate on a small scale alongside your current job, just to get the ball rolling.

But for many businesses, you'll need to put a lot of work into the business before it starts making any money, and you'll need to invest in things like premises and stock. If you need to borrow money you could consider one of a number of government schemes. There's a portal that brings all of these together to see whether you qualify for any of them.

Alternatively, you may need to apply for a bank loan. Your business plan is vital here, so you can show the bank your cash flow forecasts and prove you can afford to pay the loan back. You might be asked to secure the loan against your assets, but think vary carefully about how much risk you can afford to take.

Finally, you can approach individuals, and either sell shares or find a business angel who is willing to invest in return for a chunk of the business.

8. Build a support network

It's a rare entrepreneur who can go it alone without some support. This may be practical help from friends and family, but often it's finding someone level-headed you can talk through your plans with; someone who will ask the right questions to get you to think of all the angles and scenarios; and someone who who will give you their honest opinion to save you from making bad decisions along the way.

9. Think about your marketing

When you're starting from scratch, you're not going to have an enormous budget, so you need to work on creative marketing. This may be telling your story in a variety of media, making videos of you producing or using your work, and building an online presence so that people will be able to find you. Advertising is vital, but word of mouth is every bit as important to help you get started.

10. Just get on with it

For the vast majority of people, the business idea will spend the rest of your life as a great idea that never happens. If you're gong to run a successful business, then you need to go about it the right way - but by far the most important step is to stop worrying so much and get stuck in. It's the difference between being a frustrated employee and a budding entrepreneur.

IMF Outlook Shows Britain
IMF Outlook Shows Britain

Careers on AOL Money

17-year old with big plans started at the age of 6: he's in good company

Pension changes 2015: funding a new business

Entrepreneur moves into a garden shed: to pursue her dreams