Starting a new business - questions

[Apolloniac]

In starting a new business how do you know what to prioritize in terms of budget? What are the more vital components in a start-up?

For example: do you really need to get an office when you can work at home? You're just starting out so you can't give your employees some benefits (yet) but should you? (Is there a law I'm breaking here?) etc.

I have a lot of questions but I don't know where to start. I'm still planning it all out I need some advice on what to prioritize. Thank you very much.

 

[CoolSpot]

Theres no point in an office if you don't need one. You can work from home, and use the internet to communicate with staff. Although you need staff you can trust.

Theres no law saying you need to give your employees any benefits, just their wages and the minimum of 20 days holiday (+ bank holidays) anything else is optional. They'll understand you can't afford it so don't worry about that.


The most important things to do is make sure your business plan is correct, and that you have a marketing plan in place. Then get your logo and branding sorted, your website, business cards, and marketing materials. The materials you need will obviously change depending on what you actually do but flyers are always a good start.

If you don't need something, don't get it. If you don't know how to do something, call an expert. Make sure you budget some money for an external HR company if you want staff, and for legal & accounting fees.

Then find the local networking events, budget enough to attend at least 2 a month for the next year, more if you can get to them. BNI, while expensive, can be very good for start ups.

Also remember your utilities bills will go up if you work from home. You'll also need a business landline (Vonage are good for this) and possible a new mobile contract as well.

If there are trade bodies for your line of work it might be worth looking into them and seeing what the fees are. Most are far to expensive but you should find one or two that might be able to help.


And you can join this to: Home - Your Business Community

There is a lot of good advice here, but you can still cut costs further.

As with everything, you have two main options:
fast and expensive
slow and cheap

Fast and expensive is going to be hiring people to do everything you cant, obviously as you are paying for them to get everything started you will need to have some cash set aside for when things go wrong (no matter how hard you try to stop it or how much money you put in to it, things will go wrong from time to time.) as you will then need to re hire someone to identify and fix the problem.

Slow and cheap is going to be the opposite, It's going to be you setting everything up, configuring everything, so when things go wrong you know exactly how every part of your business works and you can fix it yourself. There could be a massive learning curve when doing this, depending on your current skills and what you are wanting to do.

I have been learning how to run businesses since I was a child, everything I have learnt has been to meet that end, so I tend to set everything up myself, to give you an idea of what I mean by slow, the current project I am setting up is an eCommerce store, the base infrastructure (that will also be able to manage all the other stores I will be setting up) is going to take me around 6-12 months to build.

You also don't need a new land line, you can get a number from skype pretty cheap and I'm sure there are other voip services that will be able to provide you with a cheap number, also no need to take out a business contract, pay as you go will work fine while you get started. The last e-commerce project I ran, I had several means of contact and not one of them was a phone. I offered instant messaging through the website (would send an email if I was not online), an email address, skype, and google chat. You might wonder why I did not use a phone as a method of support, the answer is simple, Convenience. Phones are inconvenient, if someone else is on the call then you have to wait, you then have to wait while the issue is looked into before getting your response, sometimes you even have to wait for a reply from 3rd parties. With email and messaging, they can be sent in a few minutes, and you can get on with your day. The messages can be sorted by content allowing you to work on more than one issue at a time.

Weather branding is something that is important right as you start is going to be dependent on what you are doing, while branding will help, it is not required to get your first few clients. focus on what you need to do work for 3-5 clients first, make sure you have everything you need to do that and then you will see where you need to spend your money in order to be able to handle more clients.

Basically until you have income you don't have a business, you have a hobby, so try to allocate funds as such, also thinking of things this way will help you control the speed at which your business grows.

 

[CoolSpot]

Vonage are a VOIP service, no contract, £7 a month including unlimited landline calls. Comes with a box to plug into your router to plug a phone into. The number is connected to that box so you can take it anywhere you want.

I try very hard never to use a company that doesn't have a phone number. Instant messaging over a website is all well and good, but it lacks the personal touch of a phone call, and also doesn't guarantee that anything will happen. Whereas with a phone call you can talk to a person and get something sorted, normally a lot quicker then via email. This is more prevalent when using ecommerce, as if I don't know what I want from the product list or can't see which item would be best for what I want, then I want to call and ask someone. Esp if i'm going to be spending a fair amount of money.

True, I am in no doubt, I would have more customers if I had a phone line, but I do fine without but it will defiantly come down to your market on weather you can make it work without a phone number.

Although my personal experience has always been the other way around, phone the company on and off hold for hours before being hung up on then calling back and going through it all again, I worked in a lot of call centres and found it tends to be on issues that are more complicated and it needs time to be looked into, over the phone they don't have time to look into it, it gets sent off to another team to (maybe) work on. I found with an email I know what's written and everything can be explained in detail and more thought out (also screenshots, freaking awesome when you have some one who just says it's not working), In an email you can provide so much more information than over a call, and you have a record of all time scales and important information. Call centres in the UK, you often find a language barrier as well (different accents can be hard to understand over the phone, leading to issues not being understood.)

 

[Kathryn M.]

I would just start it in my spare time in a spare bedroom. It's where everyone starts. It's a good idea to purchase/expand as you go, because the main goal is to keep costs down so you can keep as much of the money you make as possible. Spending too much, or starting off too big, will start the business off with a deficit. Every payment that comes into the company will be immediately eaten by the debt until it is paid off, when really, the payment should be sitting as available cash to reinvest into the business.

So test the business out first to see if it will actually work before spending a lot of resources. Put in just enough to test your idea, and if it goes well, you can invest more. If the test goes bad, then at least you are only out of the small test amount you invested.

 

[pwarbi]

When first starting out with any new business its always important to spend as little as possible until you find your feet, and secondly until you have some idea if your business is going to be a success or not.

While there's no doubt that before you even start the business you will have researched the market to find out if your business idea had a chance, but an idea is totally different to actually putting your plans into action.

 

[dyanmarie25]

If you are just starting out with running a business, I don't think it's already necessary for you to have an office. You can just work at home and offshore virtual assistants/staff. This is more ideal since it's way cheaper. Don't try to invest too much money in a business specially if you're still a newbie in this field, test the waters first.

 

[Jade]

I am seeking employment.

 

[T J Tutor]

In starting a new business how do you know what to prioritize in terms of budget? What are the more vital components in a start-up?

You should create a business plan that includes a cost analysis as well as a projected P&L. With these in hand you'll know what the startup has room for in the budget.

For example: do you really need to get an office when you can work at home?

This depends on the requirements of the business, it's hard to sell pizzas out of a house, can't have a storefront in your house (on average). If the business doesn't have a requirement for customer contact at the place of business, working out of the house offers a significant savings.

You're just starting out so you can't give your employees some benefits (yet) but should you? (Is there a law I'm breaking here?) etc.

This depends on the initial start capitalization. If the capitalization included benefits, it's a good idea, you attract a better class of employees with benefits.[/QUOTE]