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4 min read

Five questions to ask before starting a successful small business

Working for yourself is rewarding but making the leap into self-employment can be daunting. From finances and legal paperwork to business plans and marketing, it takes a lot more than a great idea to start a new business.

Whether you’re starting a passion project, launching your side hustle or want to break free from the nine to five life, small business experts from the Federation of Small Businesses are here to help you on the road to your first sale.

Why do you want to start a business?

Your why is at the heart of everything you do. It’s what will keep you going when you’re facing hurdles or working extra hours ahead of your next launch. It’s the reason your customers and clients will buy into your business over your competitors. It’s what will make you stand out from the crowd.

Your business might focus on innovation and providing the best value to customers, or you might be driven by your dedication to building a sustainable business. This will be the foundation of your mission statement, vision, and core values.

Ask yourself:

  • Why do you want to start a business?
  • What is your unique selling proposition (USP)?
  • Who is your target market and why?
  • What makes you stand out in your industry?

Are you clear on your idea?

Every great business starts with an idea. This could be a problem you’re going to solve, a service you think you can deliver better, or a gap in the market. But how do you know if the possibility is viable?

Ask yourself:

  • What will your business do?
  • What will you offer?
  • Will you be service or product focussed?
  • Will you need physical premises, are you going to operate online or will you run your business from home?
  • Will you be working alone or will you need the help of a team?

If you have identified a gap in the market, you’ll want to research your target audience and the viability of your startup business idea. If you’re making the shift from employment, building the foundations of your business on the side whilst still having a reliable income stream can make the transition easier.

It’s also becoming increasingly common and more accessible for entrepreneurs to start out online as an ecommerce business before expanding into other areas. 

Do you have a plan for success?

Your business plan is a written document that includes a brief description of your business. It looks at several areas of your new venture, such as:

  • the objectives
  • strategies
  • sales
  • marketing
  • financial forecasts.

The plan will provide you with a useful summary of your business that sells your ideas and ambitions to potential customers, suppliers or even staff.

Why your business plan is so important

Whilst you might be eager to get on with running your business, rather than filling out more paperwork, putting a solid plan in place means you will be able to:

  • Visualise your long and short-term goals and objectives
  • Measure your progress and performance
  • Clarify your business idea or proposal
  • Spot potential problems before they happen
  • Understand how your business can grow
  • Get clear on your company branding, marketing and digital strategy

Don’t forget, if you’re applying for start up finance, you’ll need to consider extra elements of your plan to strengthen your application to lenders. From budgets to cash flow forecasts, your business finances are not something to ignore. You might also find it beneficial to hire an accountant or enlist the support of tax specialists to help you get it right when tax season rolls around.

How will you get the word out?

Marketing your business has never been easier, as long as you have the know-how. Social media has made it easier for small businesses to gain traction online and reach wider audiences beyond their local communities. If you want to level up your digital skills, it doesn’t need to break your budget. There are plenty of free digital marketing courses and resources available online – try Informi’s 43 free low-cost marketing ideas article and digital marketing on a budget ebook.

Have you covered all the paperwork?

Another key aspect of starting a business is the legal documentation that you’ll need to have in place, such as insurance or health and safety. Registering your business, whether as a sole trader, limited company or partnership is a big step in your journey. You’ll want to think about what will suit your business model best and be aware of the implications and responsibilities of the option you choose.

You’re bound to have lots of questions about what requirements you need to fulfil as your own boss, so it’s helpful to know who to contact, such as trusted advice from legal and tax professionals.

Ready to get started?

Download FSB’s free 18-page guide to starting a business and dive straight into making your dreams a reality. With top tips from the experts and a template business plan to get you started, you’ll be well on your way to making your first sale.

Download your free startup guide
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Our dedicated start up hub is here to help you get it right from day one. Access free resources and events and learn more about how FSB can support you on your business journey.

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