If you are reading this, then there is a good chance that you are thinking about, or are already running a small business.
Congratulations! You are taking a gigantic step forward. You have probably worked for others in the past and realised that life is too short for taking instructions from others when you do know what you are doing. Nine to five is OK, but you need more independence, more control over your destiny. You are willing to take risks, and work hard, but the rewards will be yours alone.
The good news is that you’re on your own. The bad news is that you are on your own!
Starting your own business is heady but can be frightening. No longer can anybody else claim credit for your efforts, but then nobody else is to blame if you fail. There is no such thing as a regular, reliable paycheck; there’s no unemployment insurance nor holiday pay. But if you succeed, everything you earn, you keep - except for the taxman, of course.
Don’t be alone out there.
You may feel that the world has shrunk. No co-workers to chat with or take you out to lunch. You may feel you are on your own, nobody to talk to, waiting for the phone to ring. On the other hand, you are probably busy getting started, talking to customers or prospects, setting up a website and social media presence, perhaps finding suppliers, talking to the bank.
Even though you may be busy, you might, at the same time, be lonely. So, set up some time to establish contacts with others in the same boat as yourself. Join the local Chamber of Commerce, Better Business Bureau, Trade Associations, even the Rotary. There you will find others who have set out on their own. They have been through the same path you are following. You can get help, tips, advice, and perhaps even more vital, business contacts in your chosen field.
Make friends with the bank. If you have an event, product launch or whatever, invite him or her. Try and get to know him or her on a personal level. A good relationship with your banker can help you through hard times.
Politicians of all stripes sing the praises of small businesses. They all promise to help and promote entrepreneurs, but in practical terms, Governments everywhere sees to try very hard to ensure that small businesses cannot succeed. Rules and regulations surround the businessman. Papers to fill out, phone calls to make, legislation to understand and obey. They even force you to become their (unpaid) tax collector. One particular tax you will have to learn to live with is VAT (aka HST and GST in Canada, sales tax in the US, etc.). The sales threshold when you have to start charging VAT differs from country to country, with the UK amongst the highest at £85,000. You need to find out what your sales have to reach, at which point you become responsible for charging VAT on sales, and perhaps recording VAT you paid in your business. Then you need to discover how to remit the balance, and when you must do so. The onus is on you to figure all this out, and there are significant penalties for getting it wrong! I think that by the time you reach the VAT threshold, you better be using EasyInvoice to keep your records straight, but then I would say that wouldn’t I!
Keep personal and business finances separate.
Get your self a business account with a credit card and chequebook. Do not mix business expenses with your personal items. Always pay for business supplies or whatever from the business account. If you don’t do this, you will have a very tough time at tax time. You also open yourself to questions from the taxman about the real use of something you purchased. If he considers that you bought it for yourself, he could disallow the tax credit the item deserves. This is especially true for things that might be useful for a consumer, such as a laptop or a printer. And the last thing you want to do is trigger a tax audit.
By the way, keep all the receipts for things you purchase for the business.
The Home Office.
You will, in all likelihood, set up a Home Office to run your new business, especially in the early days. You might be tempted to try and claim some of the expenses involved, such as a portion of the rent, or heat, light and power. But before you start claiming this on your business tax return, take advice from an accountant. You need to avoid a situation where part of the house is considered as business premises. This could be awkward when you come to sell the house.
To become successful, people need to find you. No longer can you simply take out an advert in the Yellow Pages and wait for the phone to ring. You need a website and these days and a social media presence. They don’t need to be fancy; sometimes, a single page will do, just telling folk who you are, what you do and where you operate. If you have any testimonials or references, put them up on the site. You might be able to get the site built for free by contacting a local college and getting a student to build it as an exercise.
Getting a high ranking on Google is practically impossible and can be extremely expensive to attain.
So, go local.
Make sure that your website is very specific about what you do, and where you operate. So, if you are a plumber in Berkhamsted, Hertfordshire, make sure your business address is prominent. The site should describe the things that you do, like fix taps, repair leaks, install washing machines, and whatever else you provide. Being very specific on your website helps capture what is called ‘longtail searches’. In other words, if they search for a ‘Plumber Berkhamsted’, you might be lost amongst all the other plumbers. Whereas if they search for ‘Install washing machine Berkhamsted’, you may be top of the results list and get the business.
Google is very good at identifying local businesses when the person browsing takes the time to specify a particular location.
There is a form of Yellow pages on the Internet, called Yelp. Listing is free, and they have a high ranking for Google searches, so customers may find you more easily through Yelp.