How to Start a Business
Hate your job, and would really prefer to follow your passion? Then find out how to start a business.
That’s exactly the situation that a lot of people find themselves in.
Fortunately there’s a solution to your frustration, starting a ‘side gig’ business.
Its easier than ever with the growth of the Internet, and cheap or even free online marketing tools.
In the ‘olden days’ it was hard to start, or even find out how to start a new business.
It was also both expensive and more risky.
Expensive because you had to pay for adverts in the telephone directory (remember those), and the local newspaper.
This was also risky because you had to risk your own money ‘up front’, before you knew whether there was any interest in what your business offers.
Fortunately since the internet took off in the late 1990s, the barriers to entry have reduced drastically.
Defining your objectives
Defining why you want to start a business is important.
Passion is important, in other words why are you starting your business.
Is your passion to make a million pounds in two years, or to help improve society.
People have lots of reasons for starting businesses, and it is important to be clear why you are doing it.
Will your business make your business make you jump out of bed in the morning, or get stressed out and demoralised?
The Legal Stuff
Whilst the rules and laws vary between countries, businesses normally require registration before trading.
The following business structures are from a UK perspective.
A Sole Trader business structure is most popular for single person businesses.
In the UK you need to notify the HMRC when you start, but registration is simple.
Limited Company (Ltd)
A limited company is a separate legal entity to the ‘Director(s)’ that run the business.
This means that a limited company can own assets and also sue and be sued.
The advantages of a limited company is as the name suggests, that it has ‘limited liability’.
Therefore if the business collapses, and has debts, the assets of the directors are protected*
This means that creditors cannot come after the directors personal assets, such as cars and property**
The disadvantages of running a limited company are that it is more costly and complicated to start and run. This also results in higher accounting fees (if you employ an accountant).
A partnership is a business run by two separate individuals. This is popular in some business sectors, such as solicitors.
Public Limited Company (PLC)
A Public Limited Company, is a large organisation, whose shares are publicly traded on the Stock Exchange.
It is not the type of business that you would start up initially, but might consider if your business became large.