New business challenges are common and setting up a new business is not a project for the faint of heart.
In this post, we take a look at a few of the roadblocks you are likely to encounter on your new business journey. We have also provided a few ideas that will help you stay on-track.
New business challenges, what to do before taking the plunge
Most people who set up their own business will tell you it was more of a challenge than they expected and that it took longer to achieve business success than they anticipated.
Here are some of the personal issues you might like to consider.
• Personal sacrifice. Starting a business is a life-changing event and will require hard work and long hours, especially in the early stages.
• Financial insecurity. We all hope that our efforts will be financially rewarding, but what if they are not in the early days of your new business?
• Loss of employment rights. You will need to take care of yourself as you may no longer receive sick pay or be paid when you are on holiday – indeed you may not have time for holidays.
• Pressure on close relationships.
• Do you have the necessary skills? Are you an engineer with a desire to open a restaurant?
Planning – a must-do before your start
A detailed business plan is the key to making a success of your new business, it will also help you navigate many of the new business challenges that exist.
You will need to show your business plan to anyone who you ask to invest in your business. You will also need to show it to your bank or other institution who you approach to help finance your new business.
They will all want to know that your ideas have been thought through and that there is a good chance of getting their money back.
Your plan should include an explanation of how your business will start, build, and develop. You also need to know who you are competing with and what will enable you to be successful. The plan should describe the business, product or service, your marketplace, mode of operation, capital requirements and projected financial results.
It’s your business and your ideas but you might need help with budgets, cashflow projections, profit forecasts, all of the things that make your business plan credible.
New business challenges – economic challenges
The exceptional disruption to the UK and the global economy during the past few years has forced us to reconsider what we have assumed is “normal” in terms of business activity.
Accordingly, timing your launch date is important. The early part of 2023 may not be the best time to consider starting a business until inflation and interest rates have normalised.
Also, if you need to raise capital in order to fund the launch of your business, it is worth noting that lenders may not be that enthusiastic about financing the purchase of a business in a sector that was previously, adversely impacted by COVID lockdowns.
If your new business intends to trade in goods rather than services, an online sales platform is a must, especially if you are selling directly to consumers.
Online trading has seen rapid expansion in recent years with many high street businesses now switching online. This coupled with the growth of social selling through platforms such as Instagram, Facebook, Youtube, Snapchat and TikTok means that the number of social media influencers with a second source of income through an online “side hustle” is growing.
Many side hustles rapidly turn into large successful businesses, some expanding internationally, and some generating millions of pounds in sales. The accounting, tax and VAT compliance obligations that this expansion brings must be considered as early as possible.
If your business intends to trade with the EU, you would do well to research the customs regulations you will need to comply with.
If you are importing goods from abroad, there will be VAT issues that you need to be aware of and you would also be wise to investigate any delays to deliveries affected by the continuing hostilities in Ukraine or any post COVID issues that might still exist if trading with the Far East.
Eyes wide open
Taking on a new business start-up is a dream that needs a dose of realism in order to succeed. The comments we have made in this post are not intended to put you off your new venture, but to help you succeed by avoiding the pitfalls that budding entrepreneurs now face.
Other matters that you may like to consider as part of your planning include:
• See if you can discuss your business plans with someone – preferably not a likely competitor – who already runs a successful business of the type you intend to launch. Ask them to describe the sort of difficulties you are likely to encounter and how best to tackle them.
• You will need professional advisors to help you set up and manage your business. These may include a: surveyor (if you are buying property), solicitor, financial advisor, insurance broker and – very importantly – an accountant.
• Be sure to select a business structure that protects your personal assets, particularly your home. The key phrase here is limitation of liability.
New business challenges – we can help
We have been fortunate in helping many new business owners set up and successfully establish their business dream. You can tap into this wealth of experience by discussing your new business plans with us.
We would be happy to call you or organise an initial online call to discuss your options on a complimentary basis.
There will always be room in the market for new business owners who are informed, have done their homework, have a detailed business plan and the backing of a professional advisor committed to their success.
Contact us, or call us today, we would love to talk with you.