Starting a business

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Contents

Overview

This page has been written by Bonnie Hacking, the Enterprise & Employability Adviser. Bonnie is available to speak with students about starting a business or self-employment options. 


Is it right for me? - further information on this career area, including skills/attributes required and tactics for success (pdf)



People start their own business for many reasons - some have a fantastic idea, others are attracted by being their own boss, still others just know it's the right thing for them, some drift into it when a small venture they worked on while studying takes off and some are inspired by their parents' ventures or other people they know. There are as many routes into starting your own business as their are entrepreneurs.

Startups.co.uk has loads of profiles of entrepreneurs you might find interesting.

What's different about self-employment

Self-employment can be a simple way of getting up and running quite quickly, particularly if the idea you are considering only requires you and your expertise - for example, if you want to design websites, make and sell something or be a personal trainer. HM Revenue & Customs has a useful guide 'Are you thinking of working for yourself?'  One key element to becoming self-employed is registering with HM Revenue & Customs. The 'Register as Self-employed' section of their website contains all the information and forms for doing this.


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Range of opportunities

There are plenty of examples of successful entrepreneurs and ideas. You may find reading them sparks your own imagination and inspires you to seek out and build your own enterprise – whatever its size! Students have great ideas for ventures and with a bit of perseverance and support, turn them into successful ventures.

Case Studies

All the businesses in the following list were started by students. The list tells what the idea is based on, brief details on the concept and a website for further inspiration.

  • Marketable skill – Using mathematics to solve business problems ThinkTank
  • Improving something – Saving time getting drinks in a pub Barhand
  • Something students need – Summer storage The Big Space, started by a St Andrews student.
  • Something that comes to you while you are doing something else – A board game based on a taxi ride Destination
  • Spotting a gap in the market Anyone for tennis?, based in St Andrews and started by a graduate.
  • Doing something cheaper – Selling bicycles Capital Cycles, started by a St Andrews graduate.
  • Doing something to help others – Teaching English as a foreign language (TEFL) Online TEFL
  • Using technology to 'address real human need' - Red Button Design. This business was started by students at the University of Glasgow. They've won several awards and been featured on Dragon's Den twice!

And if those examples aren’t enough to get you thinking, the Start-Ups Website has dozens more or check out these videos

Here's a workbook 'Finding and checking out a business idea' from Invest Northern Ireland that has several idea generating methods you can work through.

global:ideas:bank is a similar repository of ideas for social enterprises.

Starbucks franchise.jpg

If you’re still struggling to find the right idea for you, another option, is to set-up a franchise. This means for an initial investment, you get all the information you need to start-up and run the business as well as a right (and contractual obligation) to use the name and logo. Possibilities range from well known food outlets like Starbucks, Subway and Domino’s Pizza, to child focused businesses like TumbleTots, to single person home or car cleaning businesses, to property management services and many, many more. There’s a great variety out there, each requiring a different initial investment.

The British Franchise Association has lots of information on franchising and links to sites advertising franchising opportunities that are available for purchase.

Other frachising links: Total Francise - 'your essential resource for starting your own franshise'

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How to find an idea

If you're thinking starting your own business could be for you, but don't have an idea, the next question you're faced with is what idea will I base my business on? (One of the common misconceptions is that charities and not-for-profit organisations aren’t businesses. They are. No matter what the focus and motives of the organisation, it will still need to have an income at least equal to the amount it has to pay for premises, phone, people to do the work and anything else needed to provide its service.)

Ideas can come from a variety of places:

  • You may be very good at something which lends itself to becoming a business, like designing websites or writing stories.
  • You may see something on offer elsewhere that isn’t available where you live.
  • You may have a strongly held view or value that could be the basis for say an environmental or social business. The Body Shop empire grew out of just such a view.
  • One of the most common places to find an idea is from an every day frustration – something you experience which you could put right or do better. Richard Branson’s vision for Virgin Airways and Virgin Trains sprang from that sort of stimulus.
  • Or you might just have an inspired idea. (Which no one can believe hasn’t been done before, like Innocent drinks.)
Innocent.jpg

Your business idea doesn’t have to be new or world changing, it just has to achieve as much success as you want it to, to build the kind of lifestyle you want to have. Start by looking at the small businesses you encounter everyday and think about what makes them different and encourages customers to keep coming back. If a particular industry attracts you, spend some time investigating what kinds of businesses exist within that sector. Is there a gap or something you could easily copy or adapt?

If you're struggling for inspiration, have a look at the case studies above.


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How to get experience

One great way to learn what running your own venture is like is to undertake work experience with an entrepreneurial organisation.

Check out Enternships for opportunities.

If nothing there catches your enthusiasm, you'll need to use your own enterprising skills to find an organisation you really want to work for and convince them to take you on!

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Skills/Attributes

Who springs to mind when you think about enterprising people or entrepreneurs? Richard Branson? James Dyson? Muhammad Yunus? or someone else? What skills and qualities do they display?

James Dyson.jpg

A question often asked is, are entrepreneurs born or made? While there’s little doubt the high profile entrepreneurs of the world seem to have been born with that indefinable entrepreneurial quality that drives them to achieve great things, there are several million examples of people who’ve successfully started and run their own business. (Look back at the SME statistics. More than three million people are self-employed.) One definition of entrepreneurship, from the Design Council is, ‘the pursuit of opportunities beyond the resources you currently control’.

Key skills required:

  • the ability to spot opportunities with the potential to become successful businesses
  • to acquire the resources needed to build a successful business, this often relies on networking – using your contacts and contacts of people you know to beg and borrow whatever is needed
  • interacting with people and getting them ‘on side’ means you’ll need to have good communication and influencing skills
  • once you’ve got people enthused about the idea, you’ll need to be able to motivate and inspire them to keep going and do what is needed to move the business forward. You might call this leadership. This is especially important when times are tough, which they always are at some point in small businesses. So you have to have a measure of confidence and self-belief
  • an ability to solve problems and think laterally is also an advantage
  • being able to anticipate when things might get tough, will test your planning ability, coupled with an awareness of the business environment. You’ll also need to be able to manage people, resources (including money) and time.

Like many of the skills already mentioned, the business skills you’ll need can be learned along the way, as you tap into the wide variety of support, advice and guidance available. Starting with creating a business plan - which you will use to clarify your thinking about your idea or business and demonstrate that it’s viable – to employing people and abiding by legislation for things like health and safety.

You don’t have to be capable of doing everything that’s needed yourself. There are some skills you may ‘buy in’ for short periods when needed, for example accounting or web design. Or it may be you get someone who’s enthusiastic about the idea to join the team and take responsibility for something outside your own experience (or interests) like sales and marketing. All of the skills and abilities listed can be learned with time and effort. So if you’re up for it, you can be ‘made’ into an entrepreneur.

Here are some simple, online assessments from the Canadian Foundation for Economic Education that might help you think things through:

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How to start a business

Company structure

  • One important consideration for starting-up is the structure of your company. Will you be a sole trader? partnership? limited company? a charity?
  • Information on self-employment (this is what being a sole trader means) and how to register as self-employed, is available from HM Revenue & Customs

Do you need a Business Plan?

This question has sparked as much debate as 'are entrepreneurs made or born'! There are very successful entrepreneurs who will tell you they didn't have a business plan and never missed it. There are just as many who will tell you a sound, well formulated business plan was critical to their success and without it, they'd never have made it. If you've done a thorough job of assessing your idea and thinking through how it could work in practice and documenting what you've found out, you're already well on the way to developing a sound business plan.

Your business plan is the blueprint for your venture, a guide to get it up and running and a point of reference for taking decisions. If you need significant funding or support, or intend to enter business plan competitions, you'll need to develop your intial, perhaps informal plan, into something targetted to the relevant audience.

You don't have to stick slavishly to any particular format, but you do need to make sure it includes all the relevant information, is coherent and factual and looks professional. Make sure the financial section is well thought out and any calculations are correct. There's lots of information on business planning. Here are a few sites with good sections on business planning.

Finding Finance

For a new business, this can be one of the most challenging aspects. The most likely sources of relatively small amounts are the four f’s – family, friends, fools and fanatics! You can approach banks, however they are only likely to lend money for your fledgling business if you can secure the debt personally. Several organisations run business plan competitions or give entrepreneurial awards. To win, your idea and plan will really have to be top notch and there’s no certainty of a prize, but competitions can be a good source of funding and in-kind support. You might also find you get publicity from entering high profile competitions.

Free money.jpg

Depending on your idea and where your venture will be located, there may be funding or grants available from local or regional organisations.

In England, there are Regional Development Agencies which may provide some financial assistance to new businesses. You'll need to check the individual RDA website for your region to see what's on offer and how to apply. Visit the RDAs

In Scotland, the Scottish Government has grants available to support new and existing businesses. Scottish Business Grants

GRANTfinder is a funding database covering the UK and Europe.

Another database of funding sources is j4bgrants, which includes competitions, grants, loans and more.

Another way to get started is called ‘bootstrapping’. It means being creative about legitimate ways of financing your business, using little or no external funding.

The Art of Bootstrapping from Guy Kawasaki's How to Change the World blog

BootStrapMe a blog site for entrepreneurs to share their experiences of bootstrapping their businesses

Building a team

If you are going to start a small business, involving people with the right skills and experience, who feel just as passionate about the idea as you do will be important. Be wary of relying on friends, just because they were there to talk the idea through with you in the early days. Whomever you involve in the business needs to have the right skills and experience to turn the idea into a successful business AND you need to be able to work closely with them, without jeopardising your friendship.

You'll need to find a balance between getting people involved in time to make things happen and having the money to pay them for their efforts. In the early days, it may be you can reward their contribution in some other way than parting with your hard won cash. For example, could you offer them your product or service free?

What kind of lifestyle do you want?

The early stages of starting your own business or being self-employed can be challenging and there probably won’t be a regular income every month. It takes time to win customers and secure deals. You may also find it difficult to have weeks of time off initially, as you may be the only person working for your company. The benefits in the longer term, once the business is up and running, mean you have full control over your working pattern and earnings.

How will you know if your idea is a good one?

Once you have an idea, even if it's just that - only a very nebulous idea, you need to assess whether or not your idea has potential to become a successful venture. You could ask your mum - she's bound to say it's fantastic isn't she? As important as the support and encouragement of your family is, one or two people telling you it's a great idea, isn't likely to take your idea much further. At this early stage, it's important to challenge your own thinking. Your initial research should think through the following questions:

  • Describe your idea, including the products or services to be provided in a paragraph or two
  • What specific knowledge or experience do you have that is relevant to the idea?
  • What problem or need does the idea address?
  • Who are the likely customers, who has the problem or need?
  • How will you make money from the idea?
  • How big is your market? How many customers are there and where are they?
  • Who else is already meeting this need or providing something similar?

(These questions are adapted from SIE's New Ideas Competition Entry)

In working through these questions, if possible, speak to others who can give you an objective view, based on their experience. The process of finding out who your customers are, who your competitors are and working out how money will be made and used will help you clarify how your venture might actually work in practice. As you work it through, you'll have plenty of opportunities to rethink things before you've actually 'gone into business' when the risks are higher and changing things might be more difficult.

An added bonus of speaking to people is you will be creating a network of support, which you can draw on as you start-up and get going.

The purpose of your investigations at this stage is to help you answer the questions 'is my idea sound, would it actually work in practice?' and importantly, 'how do I feel about forming a venture, using my idea? am I committed to it and therefore willing to do whatever it takes to make it successful?'

SIE's Idea and Venture Diagnostic is a good place to start developing and refining your idea.  Venture Navigator was developed by a group of universities, where you can test the viability of your idea for free, using their online tool.

Have a look at 'Research and develop your business ideas' on the Business Link website.

Here's what Doug Richard, multi-millionaire and former Dragon has to say 'Doug Richard's start-up top tips'

Another article worth reading is 'Create a Business Plan by Answering 4 Simple Questions

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Key links and resources

Careers Centre

Bonnie Hacking - Enterprise & Employability Adviser

Enterprise & Employability Adviser

The Enterprise & Employability Adviser, Bonnie Hacking, (in the Careers Centre), is available to speak with students about starting a business or self-employment options.

Books

  • Working for Yourself (Which? Essential Guides)
  • Your Chance to Change the World: The No-fibbing Guide to Social Entrepreneurship
  • How to Fund Your Business: The Essential Guide to Raising Finance to Start and Grow Your Business
  • Start Your Business: Week by Week
  • The Financial Times Guide to Business Start Up 2011: The Most Comprehensive Annually Updated Guide for Entrepreneurs
  • The Beermat Entrepreneur: Turn Your Good Idea into a Great Business
  • Working for Yourself: An Entrepreneur's Guide to the Basics
  • A Better Mousetrap - the business of invention
  • Enterprise for Life Scientists
  • Entrepreneurship
  • Essentials of Entrepreneurship and Small Business Management
  • My Big Idea
  • Start Up & Run Your Own Business
  • Strategic Entrepreneurship

UK

USA

  • Bizmove Small business specific site with guidelines and tools you need to start, operate, and succeed in a business of your own
  • Business.gov helps small businesses understand their legal requirements, and locate government services supporting the nation’s small business community
  • Entrepreneur Designed to meet the informational needs of new entrepreneurs. This site contains weekly articles and tips and lists other essential links
  • Entrepreneurship The entrepreneur’s search engine. Information on starting and growing your business, as well as weekly featured articles on various small business topics
  • Garage Technology Venturesis a seed-stage and early-start venture capital fund
  • Gotta Mentor Useful job search websites for students looking to work in startups or smaller companies
  • Idea Cafe
  • Mind Your Own Business Created by Junior Achievement and the Small Business Administration, this site is aimed at young people
  • Score Retired executives offer their services as “Counselors to America’s Small Business.” With more than 11,500 volunteer business counselors, SCORE provides small business mentoring and advice on the full range of business topics. For students, the most practical resource may be their searchable article database
  • Small Business Administration "Programs and services to help you start, grow and succeed"

Diverse groups

Disabled entrepreneurs

Being your own boss, determining your own working hours and being able to have a break when you need it, may make self employment or running your own business a great option for someone with a disability.  All of the information and support on this page is relevant and available for any entrepreneur.  However, entrepreneurs with a disability may benefit from organisations that specifically support start-ups by disabled people.

Here is a great article Disabled entrepreneurs: What support is on offer?

Here are links to organisations mentioned in the above article that offer support to entrepreneurs with a disability.

And if you want to aim big, how about becoming Disabled Entrepreneur of the Year and winning £50,000 to support your venture? Yes, it is a possibility!

Female entrepreneurs


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