I've been there
A £2m company owner explains what not to do when you start up
Starting up in business on your own is certainly not for the faint-hearted. Heeding some tips from someone who has been there before will help to get you off to a flying start and dramatically increase your chances of success.
The prospect of being your own boss, enjoying greater freedom and hopefully trousering wads more money is certainly appealing. But it will pay in the long term to take practical steps upfront to avoid some common pitfalls, comply with the law, save time and money, and establish good working relationships with the people who matter.
"Even if you have a relatively original idea as I did when I started out, it's unlikely you'll make an instant killing," says Heather Gorringe, the FSB's Small Business Champion 2005.
Having launched her Hereford-based environmentally-friendly products business on a small scale back in 1991 by mailing worms and ladybirds to 'green' gardeners, Wiggly Wigglers is today a £2m business.
Heather ascribes much of her early success to forward planning and insists you should never underestimate the usefulness of the business planning stage. "Even if you never consult the plan again, it's surprising how many ideas evolve when you begin committing all your thoughts to paper in a structured manner. Not only will you need a well thought-out business plan when seeking funding or new business partners, but it will keep you focused on your true goals and ensure you are less likely to stray from your real priorities."
The final choice of name was the subject of careful consideration - both to capture the public's imagination and to comply with trade description legislation.
As a general rule, Heather's advice is to be conservative - for instance, when estimating your funding requirements - and make sure you have sufficient money to keep you going in the initial stages of the business. Alternatively, present your bank with a solid business plan which will encourage them to offer you a start-up loan.
"Newcomers to the self-employed small business game would also be well advised to find quality time to seek out sensible advice when choosing a name for their business, for example, or when nailing down other important practical issues – such as defining operational and personnel policies," she says.
Heather describes Wiggly Wigglers as "a cross between the Darling Buds of May and a Haynes motor manual", offering everything from funky beehive-shaped composters to all you need to create a wildlife pond.
"Although ours is now a well-recognised brand among gardening enthusiasts and conservationists, the final choice of name was the subject of careful consideration - both to capture the public's imagination and to comply with trade description legislation.
"On matters like this, a few words with a trusted adviser, such as an accountant, lawyer or business adviser, can make all the difference between success and failure. But before hiring any professional advisor, you should first consult several of them to compare and not necessarily base your decision on price alone," she adds.
Got what it takes?
"Setting up and running a business is obviously a time consuming task - you need to be dedicated, focused and able to structure your time in order to be successful," says Heather.
"Clearly, the reason so many of us do it is that running your own enterprise can be highly rewarding, but you must first consider carefully if you have the right attributes and personality to cope with going it alone," she says.
You must consider if you have the right attributes and personality to cope with going it alone.
"From the outset, you should take time to identify your skills and particularly your weaknesses. Be honest with yourself and ask friends and colleagues for their input. And however enthusiastic you may be, you shouldn't allow yourself to get carried away with your marvellous money-making scheme at the expense of laying reliable foundations for the future," she concludes. All of this should be incorporated into your planning stage - and included in the business plan.
Lastly, some good news and some bad. The good news is there are plenty of people out there just like you who are already reaping the benefits of starting successful businesses. What's more, there are plenty more who would like to and probably will.
The bad news is that many will go on to fail - as many as 80% inside three years, and half of those within a year, depending on which statistics you read. Establishing solid foundations for your business through careful planning right from day one will help you avoid becoming one of those statistics.