In the last week, we have seen all of the job losses from various high street brands like Debenhams going bust and all the redundancies that are going to be made there due to no longer trading. When the economy struggles, what we do see as a positive note to lots of job losses, is lots of small businesses being established, whether they’re self-employed or limited companies. This normally happens because people need to fall back on their own skill set and they need to find ways of making money for themselves at a time when employment is difficult to secure.
If you’re starting to think about what you’re going to do going into the near future and into 2021, now is a really good time to have a think about how you would do it. At OnPoint Accounting, we speak to lots of startup businesses. Startup businesses is our specialty, if you will, and about 90% of our clients are within the first two years of their journey as small businesses. We’ve got a few top tips that we always recommend to everyone straight away. In this blog post, I will discuss the common mistakes people make when starting a new business.
We find a lot of people procrastinate. They say, “I’m going to do this. I’ve got this idea. I’m thinking about doing this.” Then they spend weeks, months, even years in some cases, planning to go and do something. They’ve got these big elaborate business plans, they’ve researched it, they’ve read books about it, they’ve listened to podcasts, they’ve attended online training courses and webinars. Unfortunately, they actually never take the first step and do go ahead with the business. While we agree it’s important to have a bit of a plan, a vision, of where you want to go and what you want to do, what’s even more important is taking the first step and getting on with it. Our first tip is to always make a plan but it’s got to be such a basic plan that it’s in your head, you can recite that plan without having to flick through a huge folder of documents. You’re going to be able to go, “This is the plan” and you’re going to be able to communicate that really quickly and easily to anyone that asks you what you’re going to do.
The ideal size of plan, we would say, is to write it on the back of a napkin. If you can write it on the back of a folded napkin then that’s a good size plan. No more than an A4 sheet of paper for certain at this point. Once you start getting into it and start testing and working things out, that’s a great start to your business. If you’re a person who needs a plan and you need it detailed then start planning it there but the more important thing is to make that first step.
- Not Seeking Professional Advice
Before you make that first step, though, we always advise that you go and get the expert advice. Now this could be in several formats. In Scotland, we have a government-funded organization called Business Gateway. They have lots of experts and they give loads of free advice and free resources away. Another option in England is the Business Growth Hubs. Same principle as Business Gateway in Scotland. They are designed for you to go and get advice. Growth Hubs and Business Gateway are very consultive. They’re very mentoring, coaching style support. They won’t do it for you but they’ll point you in the right direction to get the right resources and skills to be able to do it for yourself. Another advice that you can go and get is from local accountants and bookkeepers. On Saturday, my team and I attended the Portobello monthly market where we were meeting visitors and store holders and just giving out free advice, answering any questions people have. There’s lots of accountants and bookkeepers that will go and do that. Make sure you go and ask for that advice from them. We deal with accountants, bookkeepers and people starting their businesses day in and day out. It is our bread and butter. We always know what’s going on, we know where grant funding is, we know what challenges you might face because we’ve probably met people that have done something similar to what you’re going to do. We know where you can go read up on stuff. We’re absolutely fundamental to go and get the right expert advice from before you start but that advice in the main part should be free. Don’t feel like you should have to pay to get this basic starting up advice.
- Being unprepared to run a business
The next important step to run your business is to get the right tools. We all work differently, all our minds are different. Some people prefer pen and paper, some people prefer softwares and apps on their phones and iPads. Working out which one is for you is important and being aware of what works for you and what doesn’t is important but also try new things, test new things. When you’re starting out, you need to make sure you’ve got, as a minimum, a spreadsheet that’s going to track your accounts and finances. We recommend you go to QuickBooks and use our software. It makes tracking your accounts really easy. Other things to look at are CRMs, so these are softwares that help you keep on top of your client interactions. You need a good email that will talk to your phone and there’s no delays and lags and getting those emails through. We recommend Gmail or Outlook. They are absolutely fantastic. Getting the right tools in the form of softwares and stuff, right from day one, is great. However, don’t forget these can evolve. They can progress. We’ve gone through lots of different softwares in our three and a half years of being in business. What we have found is the bigger you get, the more difficult it is to
start making those changes and the more time it takes so getting something right fairly early on is quite important.
- Not using social media platforms
Social media platforms offer great tools to advertise your business. Facebook, for example, has got absolutely tons and tons of groups. They are groups that look out for your local area where you find out all your local news. My dad’s moving house next year at the start of the year. He’s already part of a local community group in that area on Facebook. From that, he’s found dog walkers, cleaners. They know what’s going on, they know what’s popular. They know there’s an artisan market next week they’re going to go and try. That’s great. The same principles apply for businesses. There’s lots and lots of free support groups and they can be quite broad like UK Business Support or they can be really niche down to your level of expertise and your skillset. For example, for us, there’s lots of accounting and bookkeeping groups. Some are even
more niche than just accounting and bookkeeping, some talk about Xero, some talk about QuickBooks, some talk about training to be an accountant or bookkeeper. There’s lots and lots of these little groups and they’re really, really powerful ways to ask questions and get expert advice from people that have already gone through what you’re going through and that’s why
we always recommend that you join the QuickBooks group because there’s people
in there that most likely have gone through what you are going through or about to go through. They’ve faced those challenges. They’ve overcome them. They’ve learned the lessons. There are all these people who are willing to have learned those lessons and are willing to share their experience with you.
That’s our final tip today really is utilize that invaluable amount of knowledge and experience that’s sat there free. People are willing to share their learnings and lessons with you on Facebook groups. Get involved, ask questions, and utilize that great resource.
Between that, having the right tools, getting the expert advice and taking the first step, that’s the really important one, is you can plan all you like and nothing will happen. It’s only once you’ve taken that first step that you’ll really start to succeed and understand how your business will work. Once you’ve got that all tied up, you’re in for a really powerful starting block and your journey will start. If you’re thinking about starting a business because you’ve been made redundant, employment doesn’t suit you anymore or your employers want you to go back to the office but actually you’ve quite liked working from home, then join some social media groups, get some expert advice, and make those first steps. You don’t have to start all of a sudden. You don’t have to stop employment and start being a small business straight away. There can be a crossover. You can carry on your employment if you’ve got that ability and build a small business on the side. That’s what I did and it worked really well.