Business 101 for Start-ups: The Basic Considerations

The road to business success is paved with challenges and contradictions, and this has never been a more relevant observation than it is now.

While business optimism in the UK has recently plunged to a six-year low amid sustained economic decline and the ongoing fall-out from Brexit, it was also recently revealed that an estimated 40% of British entrepreneurs have launched their business ventures with as little as £500.

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So although there are numerous challenges facing aspiring business owners in the current climate, there has also never been a better time to leverage technological advancement and launch low-cost start-ups. The key is to adhere to some basic considerations from the outset, including the following:

  1. Safeguard Your Venture

While you may need to perform a variety of tasks depending on the nature of your start-up, it is a generally accepted rule that all entrepreneurs should take steps to safeguard the integrity of their business interests. This can take many forms, but it is important that you protect any financial investments that you make in the business while optimising your chances of achieving a viable ROI over time.

One way in which you can do this is to protect any unique technology, mechanisms or intellectual property that is central to your business. You can do this with a patent, which will prevent others from either copying these mechanisms or replicating a particular process that is central to your business model.

You should also look to invest in either public or professional liability insurance, depending on whether you are a tradesmen or professional operative. This type of coverage can be sourced through providers such as Trade Direct Insurance, protecting you in instances where clients are injured on your premises or suffer as a result of ill-informed advice.

  1. Minimise the Long-term Debt in Your Business

It is estimated that 96% of all businesses fail in their first 10 years, which is a staggering statistic that underlines the challenges facing entrepreneurs. Many of these businesses fail as a result of incurring substantial debts, during the pursuit of rapid and inorganic growth that is impossible to sustain.

You should always look to minimise the levels of long-term debt within your business, while also retaining as much equity as possible. This creates a more profitable business over time and enables the venture to grow without borrowing excessively.

To achieve this, you should consider accessing one of the flexible and short-term lending options that do not require you to sacrifice equity within the venture. Take factoring, for example, through which you sell your accounts receivable to third-party investors and optimise your levels of cash-flow. This can easily be repaid one clients have settled their invoices, and this also helps you to negate potentially difficult 60 and 90-day payment terms.

  1. Protect Your Staff and Customers

The nature of threat faced by your employees (and in some instances customers) will vary depending on the industry in which you work, but regardless of this it is imperative that you safeguard the key stakeholders and drivers of your business.

If you own a construction company, for example, it is important that you create a safe and compliant working environment in which every single worker is protected at all times. This not only applies to the implementation health and safety measures that minimise the risk of injury, but it also includes the reduction of excessive noise that can cause irreparable damage to your employees' hearing.  

The risks associated with office work are different, of course, but employers must still perform assessments to ensure that their staff members can sit comfortably at their desks. Similarly, retail outlets must take steps to safeguard both employees and customers in equal measure, particularly if they are to avoid unwanted accidents and potentially damaging compensation pay outs in the future.

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