How to start a new business

Starting a business can be very tricky, and often involves a great deal of personal risk. From developing your initial business idea to arranging a commercial mortgage, there is a lot to think about. You must ask questions such as what is BI and how can it help my business?

Setting up a new business is a process rather than an event. Before you can even start thinking about applying for a commercial mortgage, there are a whole host of other things to consider and arrange.

The Big Idea

Research has shown that there are four main sources for business ideas:

• Invent something new
• Copy someone else's idea
• Spot a gap in the market
• Develop your own skills and interests

Market Research

Unless you investigate the competition thoroughly you won’t know if there are customers willing to buy what you are selling. You can build a picture of general trends using a whole host of published market information - from free government statistics and data to paid-for market reports from commercial providers. Your own contacts and sales records can also be a great resource.

Business Plan

A business plan won’t just help you to create a successful business, it is also your main sales tool in getting a commercial mortgage. Before potential investors risk any capital, there must be a firm assurance that you know exactly what you are doing, that plans have been thought through carefully, and that you can respond effectively to problems and opportunities. A well-constructed and carefully presented business plan will produce a much more positive reaction.

Professional Help

Here are some of the professionals who can help you in the early stages of start-up and beyond:

• Business Advisors - They can give you one-to-one advice and ongoing support, to make sure your business is well planned and you're well prepared
• Accountants - Accountants can offer your business a range of services from basic book-keeping to specialist business advice, such as start-up business advice
• Lawyers – it’s important to choose the right solicitor at the start, as it is far easier to sort out any legal issues at the outset instead of later, when they can be more problematic and expensive to solve
• Commercial Mortgage Broker – an independent mortgage broker can often offer you better deals than your high street bank

Type of company

There are three main choices for legal status of a new business:

• Sole Trader - this is the easiest and quickest way to get started. You alone are responsible for any profits and all losses, and there is no safety net
• Partnership - partners are responsible for debts 'jointly and severally'
• Limited Company – this is a separate legal entity, with directors and shareholders. It can either be private, referred to as Ltd, or public, a PLC. You need to register your business with the Registrar of Companies (Companies House)