The recession has seen a huge rise in the number of people choosing self-employment and starting their own small business. This rash of entrepreneurial spirit is nothing to do with a sudden change in attitude in the UK to the way we work; it is simply a case of necessity for many people. Jobs are scarce and competition for them is high. Both public and private sectors have begun to shed jobs at high rates and this is an unusual phenomenon – it’s rare that both sectors contract at the same time. Faced with redundancy it’s easy to see why many people are choosing to employ themselves.
Rushing into self-employment is potentially disastrous and understanding the common, but overlooked, mistakes that many small businesses make in the run up to their failure, can help to make a success of your first enterprise.
All You Need is Enthusiasm
Enthusiasm is about all you need to fuel your business, right? Perhaps not. Enthusiasm is great; it’s a tool and one that is next to useless without a plan. It can be likened to filling up the car and setting off, with no particular destination in mind. You might end up on the Cote d’Or or you might end up down some dodgy back street in a crime infested inner city no-go zone. Planning your business, your goals and your ideas should be your first step – with the plans in place you can fill up on enthusiasm and set off towards the sunset.
Employing a PR Agency
Marketing strategies and budgets are one area that many new businesses ignore completely. Again this has a lot to do with planning and something to do with fear. “Marketing Strategy” does sound like a term that applies to big business and involves award winning PR agencies. It’s not. Marketing means: ‘telling people about your business’. Word of mouth, cards in the Post Office and having a website are all different marketing techniques. The good news is they’re all accessible to anybody.
The high tech 21st century card in the Post Office window is called Google Adwords which is both easy to use and cheap. It also helps to get you thinking about marketing. If you haven’t used it, or don’t know how to, learn. You are an enthusiastic entrepreneur with a can-do attitude, after all.
The Accounts Can Wait Until You Have Something to Show
Accounting practices are another area, like marketing, that most new businesses tend to be scared of. There is a theme here, in both areas, and it is one that is common to small business or the self-employed. Your business will be based on your own skills and marketing and accountancy may not be amongst these. If you are starting out as self-employed it’s worth understanding now that you will have to fulfil nearly all business roles for yourself. Accountancy, however, is one area to get professional help.
You should consider employing an accountant as soon as possible – preferably from the start. Tax laws are complex and subject to sudden changes, a professional can guide you through them. Using professional accountancy software is also important. This is not an expensive or complicated process and will make your business more professional to banks and will help your accountant to prepare the accounts quickly – which saves you money on their bill!
Planning ahead is crucial to becoming self-employed. Listing your aims, your goals and how you plan to achieve them will help you to negotiate the earliest and most challenging days of self-employment. When things don’t go according to plan your enthusiasm should help – being able to accept changes and make them quickly is crucial to continuing on the path towards your goals.
Good planning allows for diversions and distractions, without the danger of losing sight of the desired outcome. Learning to use simple, but key, business tools to market yourself and to account for yourself – with some help – is essential.