Things to consider when starting a business
When starting a business you don’t need to be a limited company. In a lot of countries you can operate as a sole trader. There are advantages and disadvantages to both structures. You should choose the best structure for you. Generally, if there is a low financial risk and you’re not sure if you will generate revenue a sole trader would be the best structure.
If you will have multiple founders, there is a significant financial risk or you will require funding then a limited company would be the best option. In most countries you can switch from a sole trader to a limited company without incurring major tax penalties. But before you make a decision speak to a professional who can advise you on which structure is best for your situation.
Is it a good idea?
Before you invest a lot of time and money into your new idea you need to validate it first. Are people actually going to pay for your product or service? Where possible you should always try to sell first and then buy what you need to after.
For example, if you are selling products online you could create a test store. When the users get to the very last step you can inform them that unfortunately that stock is no longer available. In this way you’ll know which products people are willing to buy at what price.
You can also run ads on social media and measure response rates. A high response rate will indicate there is a strong level of demand. If you are running ads make sure they are very specific and include a price. While people may be interested in a product they also need to be interested in the product at a price which allows you to make a profit.
How will I get customers
When you’re sure your business is a good idea the next step is to determine how you will get customers. Social media can be a good source of finding customers but it can also be very costly. If you plan on using social media make sure you run test ads and test your response rate. Eg if I spend €x on advertising I will make €y in sales.
When trying to determine how to find customers it’s always a good idea to have a very clear picture of who your target customer is. This will allow you to identify opportunities to reach them and ideally in a low cost way.
What help do I need?
You can’t start a business on your own. Firstly, there are many entrepreneurs in a similar situation. One low cost way to plug the gaps in your knowledge and experience is to reach out to other entrepreneurs in a similar situation. You can offer your skills and experience in exchange for theirs.
There are a lot of students who are keen to get real world experience and apply what they’ve learned in university. It may be possible to find an intern to work a few hours a week who can help you with your website or social media etc. It’s important if the intern is not being paid they are clear on what experience they are getting out of this. Also, if they do a good job please write a good review on their linkedin profile.
What financial supports are available?
Some countries offer a range of financial supports to businesses. For example, in Ireland there are a range of grants available just for start-ups. It’s important you are aware of all of the support available to you. An estimated 90% of startups fail.