Thinking of starting a business in 2023?
You might be wondering why you should pay any notice to anything I write below. Well, while I obviously didn’t start a business in 2023, I did launch a venture in 2017. Ruckus Marketing was my business and it ran until 2019 when I sold it to another, more established company.
I now help to run that company, Fuel Communications, and have also worked with a number of startups and SMEs to help ensure that they get off on the right foot.
One way I do this is by working as a mentor on STEAMhouse’s Hatchery programme, which launched last year and sees students and graduates of Birmingham City University (BCU) compete for a chance to win part of £10,000 to develop their own business.
1). Assign and agree on roles
Most business owners, understandably, like to project the persona of being a “Founder”, Owner, CEO, Director, or Entrepreneur. They may very well be these things, they are also the receptionist, bookkeeper, custodian, and all the rest.
This is because when starting a new business, you have to be willing to do anything and everything (at least for a while).
When I first started my business, I had the skillset that I built my service offering around but I also had to be the credit controller, business development manager and weekend support.
My business partner, on the otherhand, was the bookkeeper, invoice administrator, and “admin monkey”.
Naturally, there was crossover and we both did a bit of everything, but assigning roles meant that there was somebody ultimately responsible for those things getting done. Neither one of us could say “I thought you were doing that” when it came to our assigned roles.
We proved time and time again that this system was by no means foolproof, but it worked more often than not and always helped.
2). Pick the right partner(s)
As touched upon in point one, having a good partner with a key understanding of their roles can be incredibly helpful.
While it’s absolutely possible to go solo, a lot of us choose to go into business with a partner or partners.
Being in business with the right partner is easily one of the most enjoyable and rewarding relationships you can have. You support each other, bounce ideas around, learn the other’s skills, and generally have someone that’s pulling in the exact same direction as you.
Having a bad partner, on the other hand, can kill a company before it even begins.
Bad partners are not necessarily bad people or even bad friends, but simply people who aren’t right for you as a business partner.
Your motivations and priorities might differ, your ethics may diverge, your communications styles could clash, and so on.
Obviously, there is no way to really know what people are going to be like as business partners until you get stuck in, but that doesn’t mean you have to go in with blinkers on.
Get to know any potential partner as well as possible if you don’t already and if you do, ask yourself whether they would complement you professionally.
3). Get working capital into the business
Starting a business without putting any money in makes an already challenging situation that much more tenuous. In the end, businesses are all about money and not putting any in is like expecting to drive a car sans fuel.
Putting money into your company not only provides working capital but also incentivises you and any partners to knuckle down and get working to recoup your investment.
If you cannot self-fund, you may need to explore other funding avenues like a loan, commercial finance, or seed funding.
Each comes with its own hurdles and assorted pros and cons, but in the end they are each a means to an end and ought to be considered if you’re in need.
4). Decide on the best legal structure
Whilst it is tempting to start up as easily as possible, as sole trader for example, it is really worth researching the best legal structure for your business at the outset.
A friendly lawyer or accountant can help you with this. In a best case scenario, it will mean you get your hard-earned profits in the most tax efficient way.
In a worst-case it could make the difference between losing your assets and having a bad credit rating for years to come.
In any event, your clients or customers will want the assurance they are working with a legit start up, so credibility is really important.
5). Decide on your business’ direction
It may seem strange, but how you want your business journey to end is actually something you should think of pretty early on. Some companies are set up to grow at a steady pace, supporting their owners financially and growing over time (in’shallah).
These are your traditional business models and while planning does go into them, there’s an element of responsivity.
They aren’t rudderless ships and there’s a general course to follow, but the destination isn’t pre-determined (it’s all about the journey and friends made along the way).
On the other hand, some businesses are made with the founder’s or founders’ exit in mind from day one.
Timelines and performance targets can vary but this is the sort of model that that tends to be favoured by those intending to put a lot in and take relatively little out, in the hopes of a significant payout at the end.
On the extreme side of this, we have the businesses that are typically referred to as startups, which require a great deal of planning and funding to get precisely where they want to go.
What’s more, startups need to grow quickly, meaning their founders have to be able to keep up with the workload while wooing potential investors and enticing funding.
These are high risk-high reward propositions, with around 90 percent failing. Even the majority of those that are venture-backed fail, so choosing to go down this route is absolutely not for the faint of heart.
Whatever model you favour, it’s important to decide early on.
6). Utilise inexpensive office space
When you first start, chances are you’ll be working from your home or the home of a business partner. You may lie to yourself and say you can work effectively from a cafe or pub, but you can’t and it’s a bad idea.
Trust me, you will spend too much money and get too little done. Running a business from home is a great way to save time and money in the early days, but I cannot say that I’d recommend it full-time in the long term.
Nowadays, there are places where you can go to work alongside other motivated people in a similar situation to you.
For instance, you have the STEAMhouse Incubator in the city centre of Birmingham, where you can hot-desk or get a dedicated desk (for a surprisingly nominal fee).
This isn’t to say that you can’t work from home several days a week or that working from home will necessarily hamper your success.
Still, you will invariably benefit from spending some time in an office environment. At the very least, shared offices are a great place to find leads and pick up referrals.
Searching for my tips on starting a business in 2023? Check out some more key pointers in Alem’s blog on the BCU website.