Dreams of starting your very own business can be an exciting prospect and there are many like-minded people who share the same aspirations as yourself. However for some, there are a number of difficulties that seem to stand in their way.
We spoke to 2,000 UK business hopefuls and discovered that 1 in 5 of them faced some kind of difficulty that either prevented them from setting up their business, or delayed the process for some time.
Read on to discover exactly what these common difficulties are, as well as what you can do to avoid facing them yourself and to get your business up and running as quickly and efficiently as possible.
Lack of funds required to set up a business
The average cost of running a business in its first year costs around £22,756, but this isn’t the case for all. In fact, the much-loved Cambridge Satchel Company was started up with an impressively low budget of £600!
The cost of setting up a business can vary depending on the business and can fall on either side of the spectrum. If you’ve simply assumed that you don’t have the funds required to set up your business, now is the time to sit down and do a little research.
Consider different locations and the average cost for setting up a business in each of them. You could also look at various ways to cut down the costs, such as whether it’s necessary for you to have physical premises to begin with, for example. There’s even the option of working out how much of a financial backing you might need, using a business planning calculator.
Fear of the risks associated with owning a business
It’s inevitable that a number of risks come with starting up a business of your own. That being said, there are a fair few people who are holding back from starting a business because of these specific risks.
I’m the main earner
Being the main earner and losing the steady income that comes with it, is a major concern for many. However, there are things you can do to prevent this from being as much of a risk than you might think.
For example, if your partner is in full-time employment, you could consider their salary and how you could turn it into the household’s main earnings for the short-term. Make a plan and, whether it’s 6 months, a year or longer, work out what you would need to reduce in your everyday living expenses, to be able to live comfortably whilst setting up your business.
Lack of savings to secure a stable income
We found out that around 30% of business hopefuls would choose to use their savings as a way of funding their business, either with its running or providing themselves with a stable income. On the other hand, many chose not to start up their business due to a lack of savings and with it, a lack of stability.
It’s important to have some financial backing behind you when making the step into entrepreneurship and savings make up a big proportion of this support. If becoming a business owner if a lifelong dream of yours, you should make the necessary steps to ensuring you have enough savings to fall back on, when you might need it during the set up.
Assess your finances and make changes to build a healthier savings account. It might be worth making sacrifices and losing some of the luxuries on a temporary basis, until you reach your target to get your business up and running!
The business could fail
There’s always a chance that the business might not succeed and so it’s completely natural for this to deter you from putting forward your plans to start up a business. With thorough planning and preparation, however, you should find yourself growing a business that’s successful.
Make sure that your business has a unique selling point, that people are actively looking for. That way, you know that you’re onto a potential winner! A solid business plan will help you to set up your business in an efficient way, to spare yourself any losses in time and costs.
Before starting up, you should look to set realistic milestones which your business should be reaching over different periods of time. That way, you can constantly assess the goings on within the business and whether it is reaching the targets you intended. If not, can you reassess the situation and make adaptations to your plan, rather than calling it quits on the business altogether?
It also helps to keep your personal finances separate from your business finances, using a start up business bank account. This way you are able to keep track of the business’ outgoings and to avoid getting them confusing or mislaid amongst personal spending.
These common risks can be avoided with careful planning and consideration and it’ll come quicker than you might think, where you see yourself opening your very own start up business!
When you’re ready to make the initial steps to starting up your business, take a look at our business account, a low cost alternative to any small business bank account you will find on the high street.