Running your own business
Maybe you’re excited by the challenge of working for yourself, or think you could do a better job than your employer!
Perhaps you’ve become interested since seeing the recent TV programmes about being an entrepreneur: Dragon’s Den and The Apprentice?
Many people consider self-employment at some stage. Being your own boss, enjoying the financial rewards and job satisfaction is very appealing. But it's a big leap, so it’s important to think carefully first. Here we answer some of the most common questions about starting up your own business.
How do people come to run their own business?
A new business can be selling a new product or invention, providing a service or selling goods through a distribution network.
Here are some of the main reasons why you might want to start up your own business:
- you’ve developed knowledge and skills in your field and want to go it on your own
- you’ve noticed a gap in the market
- you’ve had an innovative idea – a solution to an everyday problem, for example
- you want to turn your hobby into a business.
You might also consider self-employment if you inherit a family business, are made redundant or unexpectedly come into some money.
What are the advantages of running your own business?
- if your business is successful you can earn a lot of money
- you can work when it suits you – around your children’s school hours, for example
- your independence gives you job satisfaction
- you choose what type of work to do
- you are your own boss and you make your own decisions
- no company hierarchy
- no office politics
- no worries about becoming unemployed
- you reap the rewards of your own hard work.
What else do I need to consider?
- you’ll lack the support and safety of having a large organisation behind you
- businesses can be vulnerable in the early stages
- in the early days you might not make much money
- irregular income
- no employer benefits such as paid holidays, sick pay, pension scheme
- the buck stops with you – you may have to make decisions without advice or support
- you will probably work just as long hours, if not longer, than you would being an employee
- it might be lonelier – no socialising with company colleagues.
While it’s important to consider the risks and challenges ahead, don’t let these put you off. If you’ve got a good product or service and the skills and aptitudes to run a successful business, there’s no reason why it shouldn’t be the best move you’ve ever made.
If you’re not quite ready to take the plunge and start your own business full-time, you could begin by running it part-time. You could continue working in your present job while trying to get your business off the ground.
What type of person runs a successful business?
To succeed in running your own business you should:
- have drive and determination
- be innovative, imaginative and creative
- be single-minded
- have sound business sense
- be persuasive and good at selling
- be self-disciplined and self-motivated
- be flexible to adapt to changing market needs
- have knowledge and passion about your product or service
- be prepared to take calculated risks
- have the self-confidence to take responsibility for your own decisions
- have good organisational skills
What should I do next?
Things to consider before setting out:
- research your target market
- identify your competitors
- know your product or service
- get up to speed with legislation or regulatory requirements – insurance, health and safety, employment law, patents, VAT, National Insurance, PAYE, planning and building regulations, environmental regulations
- have you any training needs?
- have you got experience of the business area?
The more you know about your market and product/service, the higher your chances of success will be.
What training might I need?
You might need to learn bookkeeping, time management, or learn how to use a computer package. You could also do a course on starting your own business, which cover many of the skills you might need.
Call the Careers Advice Service on 0800 100 900 and we can talk you through your training options. You can also search for courses yourself in our Learning Directory.
Which challenges might I face in the early stages?
These are the most common:
- finding funding to start up
- identifying and reaching customers
- setting the right prices
- generating enough business and dealing with competition.
Also, you’ll probably need financial, emotional or practical support from your family and friends. They’ll need to be patient and supportive, and understand if you work long hours or have to scale down your outgoings.
Are there different types of self-employment?
Many self-employed people are sole traders or run limited companies. You could also work in a partnership, a co-operative or take on a franchise. Find out more about the different types of business on the Business Link website.
I've heard about running a franchise – what’s that all about?
A franchiser has an established business and brand name, such as a chain of restaurants, and sells the concept to people who want to run it – the franchisees. You then implement the concept or system, in this case by running another branch of the restaurant.
Running a franchise can be less risky, as many of the essential items are already in place – the brand, advertising, materials, premises etc. But you should do your homework and make sure the franchise is a genuine opportunity and not a failing business or a bad idea.
Find out more about running a franchise on the British Franchise Association website.
I’ve considered it carefully and want to go for it. What’s the first step?
When planning to launch your own business, you should get as much help and advice as you can.
Business Link is the main source of advice for starting up your own business. Business Link offers impartial business advice and a range of other services to help people who want to set up their own business. They also help recently launched small firms. Their advisors aim to be able to answer all types of business enquiry, from small one-off queries to in-depth help with business planning. If they can’t help with your enquiry, they’ll refer you to an organisation that can, such as your local Learning and Skills Council or local authority.
Can I get funding to start up my own business?
If you don’t have your own finances to set up a business, you'll have to look for funding. You may get funding from government grants, the European Union, regional development agencies, local authorities and other organisations. A bank may also fund you if you discuss your business plan with them.
Here are just a few of the organisations offering funding or funding advice for starting up your own business:
- Prince’s Trust offers loans for people aged 14-30 to set up their own business
- Instant Muscle (Tel: 020 8319 5660) – has a network of centres around England and Wales providing help for unemployed people to apply for funding to set up their own business
- Shell liveWIRE provides advice to people aged 16-30 to start and develop their own businesses – also runs an annual competition for young entrepreneurs with a prize of over £10,000
- New Deal offers financial assistance and support to those wanting to start their own business.
There are many more schemes and sources of funding, such as those aimed at:
- people in certain parts of the country, such as deprived areas
- people starting up a business in a particular field, such as the arts.
Contact Business Link for advice on which funding sources you might qualify for. They also list the main sources of finance and grants on the Business Link website.
Where can I get more information and advice?
Business Link helpline: Tel 0845 600 9006
DTI Enquiry Unit Helpline: Tel 020 7215 5000
National Federation of Enterprise Agencies
