According to a 2020 study, 64% of the UK workforce want to start-up a company. And 83% of 18-24 year olds dream of self-employment. Wanna be entrepreneurs are being spurred on to start up their own business for a number of reasons, including being unhappy in their job, wanting to earn more, and looking for more flexible working / being able to work from home.
Having your own business is really exciting. It provides a way to make your own way in the world without having to depend on anyone. Deciding to plunge into the murky waters of a start-up often happens after redundancy. It’s also, let’s face it, often a way to escape from bad experiences in the workplace and have a bit more control over your own life.
I made my first foray into starting up my own business not because I had been made redundant but simply because I wanted to build something for myself, to see what I was really capable of. I had a steady job, in fact, a career. But I was unhappy for a number of reasons. Now, looking back, my naivety drove my decisions. I hope this short taster and GoFounder’s longer playbooks and guides will help you make, instead, an informed decision of when and how to kickstart your start-up.
The time is now: when to start-up
When is the right time to start-up a company? That is similar to the question ‘how long is a piece of string’. However, a general guide is that start-up timing has several elements:
Is the world ready for your company and product?
This may seem like a stupid/obvious question, but it is an important one. When someone says “I was just too early to market” they are probably correct. This is where market research comes in. Market research gives you the data needed to make an informed decision around timing (as well as many other areas of your business).
Are you ready to commit?
Starting up a business is not an easy option. It is hard work, often long days (and nights) and you can say goodbye to weekends, certainly in the early days. When you start up a business it affects the people around you too. Are you in a position to devote time to the company? Is your family behind your decision? Can you commit to dedicating a lot of time to making your business work?
Can you afford to start-up a company?
There are often costs associated with starting up a business. These costs could include the engagement of an accountant or buying capital equipment, etc. The costs could also include lost salary from a regular job. Are you ready to put your money where your mouth is? On a helpful note, some possible grants or loans are available to help out start-ups. But be warned, they are not always easy to get and in the case of loans may require a ‘debenture’ on your home (meaning the bank can take your home if you default on payments). You may also reach out to investors. Financing a company is a whole discussion in its own right and GoFounder talks about this at length.
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Should I quit my job?
Starting up a company is not always a simple case of quitting your job and the next day you start selling.
It can be a process that happens quickly, for example, redundancy or some other life crisis might force your hand. Redundancy may also give you a lump sum of money to live on while you prepare your business.
Alternatively, starting up a business can be a slow process, overlapping with an existing job. Many people start-up a company while working full-time at another job. This has some pros and some cons:
Pro: You have a continued income stream to feed, house, and clothe yourself and family. That income can also come in handy for start-up costs.
Con: You have a full-time job which will interfere with starting up and running another business.
If you start-up a business while holding down another job you also need to make sure there is not a clause in your employment contract forbidding this.
Ultimately, the choice to quit your job to start-up a business is a personal one. It really does depend on your circumstances. Your family setup and the likelihood that the business will quickly make enough money to replace lost income from your day job.
If you do quit your job to start-up a business, you need to be ready… and you’ll probably need a fair bit of help!
Founder story
“Looking back to when I started my business, I was so naive. But, then again, I think some naivety is important as there’s no way you’d put yourself through all of the blood, sweat and tears otherwise!
I started planning my previous venture whilst still working full time but I didn’t actually start it until after I’d finished – I literally quit work on the Friday and my first day trading was on the Monday… quite a scary time! Having a network of others in the same boat was a life saver at the time… hence why I started GoFounder, so every founder could have that to help them along the way.”
– Eddie Whittingham, Founder
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The scouts are right: be prepared
I am lazy. There you go, I admit it. But I have learned by my mistakes that being prepared is actually the lazy person’s way to make a business successful. Good preparation means that you are less likely to run around like a headless chicken when the business takes off, or worse, stalls.
Preparation when you start-up your business means you must look at things such as:
- Your business idea – is it marketable, will someone want it?
- Do you REALLY want to do this and commit?
- Can you make a living from your idea?
- Do you understand what is needed legally and financially to make your business viable?
- Do you have the right skills to run a business?
Plan, then plan some more
At some point, ideally sooner rather than later, you must sit down and plan out all aspects of a business before embarking on it. Areas that you should explore include:
- Do you need premises, or can you work from home and save costs?
- What type of business will you form
- What capital equipment do you need?
- How will you fund the business
- How will you get the product in front of customers?
Whilst the above aspects of business planning can be general ideas, ultimately, this all leads to the creation of a business plan.
When I first started out in business, I had never even heard of a business plan, let alone create one. Being lazy, just the thought of writing up ideas and analysing a business made me feel light-headed. After laying down for a good long rest, I decided I had to do it. Learning how to create a good business plan has been an essential business skill that I am glad I forced myself to do. A business plan is not just for others, it is a vital resource for yourself. A good business plan will help you to crystallise thoughts and even predict outcomes. It forces you to look at parts of a business that you may not be familiar with but that are essential, like marketing and finances. Often business owners start a company because they are artisans, brilliant at creating a beautiful product – but they haven’t a clue how to sell it. A business plan helps you to formulate a strategy across all aspects of your business.
Here to guide you
Writing a business plan? Follow our simple guide to getting your first business plan created, quickly.
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Starting up a business is an exciting thing. But it takes preparation and planning to help it succeed. Sure, you can ‘have a go’ and hope for the best, but to give yourself the best possible chance, take the plunge wearing your best business cossie.
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