The number of people becoming entrepreneurial in the UK is on the increase steadily especially as the final glow of the recession is fading. Starting your own small business require business nous and most importantly passion so that you can see the fruits of your labour. To start a business, you do need money and this is where many entrepreneurs feel as if they stumble because they can’t figure out where to get the cash they need to get their business up and running.
Why are people starting businesses?
Barclays recently published an infographic that found that 44% of entrepreneurs are doing it so that they can have a big business. Barclays also found that 47& of those surveyed became entrepreneurs because they want to earn a living. These are just two reasons why some people start businesses. For you, it might include earning a secondary income without giving up on your actual job. Whatever reason that you decide, just make sure that if you want to be an entrepreneur, you should go for it with 100% effort because it is not an easy journey down the road to entrepreneurship.
What type of business can you start with no money?
If you don’t have a lot of money to begin your business, you need to get creative with your budgets so that you can successfully launch your business. Here is a list of business ideas that you could start with a small amount of cash:
- Home-based business: Whether you are selling items on eBay or you want to sell items that you have made yourself, you can do this from home with a small amount of cash. Home-based businesses give you the chance to not pay for office space which means that you will save money that you can use on other parts of your business. Home-based businesses suit working parents who want to spend more time with their children.
- Consulting businesses: A consulting business is a simple way to start increasing your income without having to spend a lot of money. All you need is a laptop, Internet connection and passion for your business.
- Mobile businesses: This is one of the hottest business trends in the past couple of years. From mobile doughnut bakeries in a van to hair stylists that can come right to your door, these businesses simply require you to have a car or a van and your product inside so that you can sell it to anyone on the street. These businesses are time consuming so you should have assistants that can help you with the day to day running of the business.
- Catering services: Customers all over the world spend money on food whether it is finger licking savoury cuisine or sweet treats from bakeries. You should consider starting a catering service if you love creating gorgeous food for all types of customers. The beauty of this type of business is that you can sell it to other businesses as well as consumers.
- Web design business: Website design companies are all over the world and every day, there is someone new creating a website for a client. This is perfect if you are a tech wiz and you understand what type of design suits a website. Website design businesses need you to pay for hosting and to pay salaries for website designers. If you can get enough clients, you can build a website design business that can provide for you many times over.
What type of entrepreneur are you?
Entrepreneurs come in all shapes and sizes but we have noticed that there are certain profiles of entrepreneurs that seem to ring true across the board. Take a look to see which entrepreneurial profile that you go under:
- ‘Lipstick entrepreneurs’: This is a term used to highlight women who are deciding to stop working and do direct selling businesses instead. Everything from selling candles to soap, lipstick entrepreneur is a term that only scratches the surface of the men and women who are changing the consumer business face forever. If you are someone who loves consumer products, a business where you can sell them at retail and wholesale is ideal for you.
- Tech stars: The technology world has exploded with billion dollar start-ups like Facebook. There are so many entrepreneurs who are using technology as the market to create new and innovative businesses that change lives. If you have a business idea within technology, make sure that you write a business plan so show how your business will make money. Popular tech business ideas include creating new social networks and launching your own mobile app.
- Entrepreneurial investor: This is one of the fastest rising groups of entrepreneurs. Let’s say that you have a lump sum of cash that you have saved or received as an inheritance, you could decide that you want to invest it. Investing requires research and a sharp financial mind which means that you should only consider investing if you know the risks which do include potentially losing your capital. Entrepreneurial investors are going into property as well as investing in small businesses that they hope will become household names.
- Cautious entrepreneur: This category of entrepreneur includes people who want to have their own business but want to keep their eye on the costs. There is an element of risk in every business but cautious entrepreneurs prefer to have slower growth in order to minimise more risk.
- Self-employed superstar: Some people come under this category where they work for themselves but mostly they do all of the work. This can include anyone from a marketing consultant to an artist. If you are leaning on being self-employed, do realise that you will be doing most of the work but it does mean that you aren’t technically employed by anyone. This is ideal for people who want to escape the rat-race.
Women in business
If you are a working mother or career woman, you are probably thinking of ways to increase your income so that you can support your family and your lifestyle. Research shows that 48% of women entrepreneurs in the UK have service businesses that they are running. If you are a woman, you should consider any business that you are passionate about whether it is service or product oriented.
Women in business should know that they can do it all – whether you want a family and financial security at the same time, you can do it but it will require strategic planning on how to achieve it. If you want to start a business before you have a family, consider how much money your business needs to make in order for your business to support your lifestyle. Even if you don’t want a family in the future, you can still launch your small business to create the life that you have always wanted.
What are the sources of cash available to you for your business?
As the saying goes, cash is king – this is completely true for your small business. If you are thinking about starting a business, you need to understand how cash works. Peachy Loans has the following tips when trying to choose your source of cash:
- Savings: If you don’t want to get a loan, you could use your savings. This could be your long term or short term savings. Savings are good if you don’t want any financial liabilities however if you have savings for retirement, it is probably better to take out a loan.
- Bank Loan: Entrepreneurs are sitting on the fence between whether banks are good sources of credit or if it is time to look elsewhere. You should look at every source and do your research to see which bank is right for you.
- Alternative Finance Loan: There has been a growth in the amount of commercial finance lending from alternative lenders. This could be an attractive source of cash if you need a larger amount for your business venture.
Ultimately, if you have the money available to start your business without it affecting your lifestyle, you can go for this route. Many entrepreneurs in the UK choose to apply for loans and other forms of credit so that they can get their dream jump-started. With 7.3% of UK adults planning to start a business in the next 3 years, it’s time to start saving and getting your credit score high so you can be the entrepreneur that you always wanted to be.
The financial nuts & bolts of running your own business
Now that you have decided to start a business, you need to understand the nuts and bolts of running a business. The pieces of the puzzle on running a financially healthy small business include:
- Logistics: This is the less glamorous end of your business. Whether you want to open a bakery that the world will love or if you have started an online shop, you have to figure out how to physically move your products so that your customers can get them. This includes anything from transport, courier work and sending your products to your international customers.
- Inventory: This is a sleek way of saying the products and stock that you have. You do need to reinvest wisely in your business so that you always have inventory for your customers to buy. Inventory should always be managed with pinpoint attention to detail so that no stock goes missing.
- Customer Acquisition: This is the magic of your small business that will make it sparkle. Before you launch your ideal business, you need to understand how much it will cost you to get your customers. This means assessing the cost of marketing and advertising to get the customer who will pay you for your product or service. When you know your customer acquisition cost, you can plan on how to make profits from this cost.
- Technology: No business can run these days without some technology. Whether this is cloud computing to host your data and documents to smartphones so that you can talk to your work colleagues, you do need to invest some money into technology. Technology from computers, laptops and servers helps you to run your business efficiently.
- Pricing & Costs: You have to price your business in a way that will allow you to make a profit. This means understanding how margins and mark-ups in your business work. Whether you are a graphic designer or selling beauty products, you have to include margins to get the cash that you want for your business.
- Staff: Any business cannot function without staff members to make the business a success. This includes anything from your personal assistant to sales executives who go out there and make the sales for you. Staff is the most important element of your small business which means that you need to choose the right people for the business.
- HR & Admin: When you start your own business, you will probably be doing lots of admin work such as organising how the business should be run and organising petty cash payments. This is the operations arm of your business and it needs to be managed efficiently at all times.
Marketing your business
Marketing is the blood of your business that makes your loan, savings and passion for your business worthwhile. Marketing can take the form of many types of methods and we have included the most important ones that you need to consider. You need to make your money work for you and this is what marketing aims to achieve:
- Use social media: The burst of social media with platforms like Twitter, Instagram and Facebook has meant that there are tonnes of customers who are online connecting via social media. Social media is an excellent way to promote your products and service because it comes across more honest and sincere in that you are helping your customers gain value from your service.
- Consider direct mail: Direct mail is a good way of connecting with potential customers if you have a B2B business that you want to promote. Come up with cool direct mail campaigns that speak to your customers in the way that you expect.
- Have a website: Websites are the shop windows into your business – if you want to attract many customers in today’s world, you need to have a sleek professional website so that your customers can contact you. Websites can also be used to show off what products and services you have on offer.
- Hire a salesperson: Sales people ensure that cash comes into your business. Without sales, there is no business. You need to consistently have fresh sales coming into your business so that your business can grow. A sales person who is part of your company can change the fortunes of your business.
Take control of your financial future with a business
A small business is an investment into your future; whether you want to create a secondary stream of income or if you want to be a millionaire, you need to create a solid business plan and use these business tips to build a business that can stand the test of time.