Negotiating the Pitfalls of Setting Up Your Own Business

pitfalls of businessIf you’re interested in setting up your own business, it’s important to be realistic about the cost and the hard work involved. Of course, it helps to have that famed entrepreneurial streak, but this alone won’t turn your business idea into a profitable enterprise.

The economic climate can be very tough on small start-ups, and you will have a great deal of competition from similar businesses. However, setting up a successful business is achievable and can be highly rewarding, as long as you’re informed and aware when it comes to recognising the potential pitfalls.

Getting Started

The first thing you will need to set up a business, is a practical idea that can be turned into a product or a service. This idea should be properly thought through before it can be registered. It’s also important to do your research to determine whether there is a market for your business idea.

Find out whether your target audience will be willing to pay for the product or service you’re proposing to offer. You should gather as much information about your competitors and their business models as possible. Talk about your idea with potential customers and get as much feedback as you can.

Constructing a Business Plan

Don’t be afraid to make changes in the early stages, as this may save you a massive amount of money further down the line. When writing up a business plan, make sure that you include the results of your customer research and explain how you can turn your idea into a profitable enterprise.

You need to be able to show this comprehensive business plan to the bank when you’re applying for funding and to potential partners, investors and suppliers. You should always do your research on suppliers in order to determine which ones are reliable and trustworthy. It’s essential that you build good relationships with suppliers so that you will be in a position to negotiate prices.

Financial Planning

You will need good financial advisors in order to set up your own business.

They should include an accountant and a lawyer, and some firms including Gibson Hewitt provide comprehensive new business financial planning services. Even if you come from a financial or entrepreneurial background, it’s always better to have specialist assistance. It’s important to be prepared to deal with paperwork and have a keen eye for detail. You will be required to make National Insurance Contributions, apply for VAT and pay Corporation Tax once your business is operational. If your profits are below £300,000 you will pay 20 percent Corporation Tax and if they are above, 21 per cent tax.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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