New entrants into the world of entrepreneurship in Britain today are coming thick and fast.
There were 581,000 new companies created in 2014, according to StartUp Britain’s tracker, an online tool that counts the new businesses registered each year.
Last year is expected to be another record-breaker, with estimates that more than 600,000 businesses were launched.
It’s not just youngsters that have a healthy appetite for start ups. According to a study by Axa, 10% of over 55s (with average pots of £550,000) are planning to using cash from their pensions to become entrepreneurs.
Starting a new business? Browse our articles for help and inspiration.
So how do you go about it?
Launching a new business requires planning – and crucially, funding.
The planning part is all about forming an idea, researching the market and eventually testing it. Think about how to find some real customers to buy and use your product or service.
Once you’re happy that your idea will work, it’s time to fund it.
Getting financial backing can be a challenge as banks have tightened up their lending to small businesses following the economic downturn.
A good business plan will enable banks to gain a distinct picture of a company explaining, in plain English, what your product or service is, any key features of your specific industry, your target market and the competition you will face. You will need to explain sales and marketing – that is, how you’re going to get business, and how you will sell.
In the event you get turned down, there are now a number of other funding routes available, such as peer-to-peer lending and crowdfunding.
Seven tips for crowdfunding your business.
Setting up your business
An accountant can talk you through the different ways in which you can start a business as a sole trader or perhaps as a limited company.
It sounds complicated, and while there are some complex structures, you can set up a business overnight with a quick phonecall to HM Revenue & Customs to register as self-employed and off you go.
You may want to start small, depending on your trade, in which case from home is ideal as overheads are kept to a minimum.
A limited company will need more organising, and your accountant will be invaluable here.
You will also need to decide if you can work from home at the outset to save on costs, or if you need to look at renting office space.
Home office versus renting office space: which is best for you?
Once you get started, you don’t have to be alone, even if you are based at home. There’s lots of support these days to get you out and about.
“Tech hubs” are springing up all over larger cities encouraging development. These so-called hubs offer the opportunity to work in an office space with other start-ups, giving you access to a wide range of events and connections with key business institutions and experts.
Eight ways to raise money for a new business.
Entrepreneurs should remember – they cannot do everything on their own. A great innovator might not have the commercial skills to run a business. So take all the advice you can get.
There is a wealth of help around for small businesses whether you’re just starting out or wanting to expand.
StartUp Britain, a government-backed national enterprise campaign, aims to provide inspiration and support to aspiring entrepreneurs offering tips and advice and before, during and after.
There is also help available online at betterbusinessfinance.co.uk, startupdonut.co.uk and also from the government business support helplines.
Six things you need to do to set up as a sole trader.