January may a good time to start a new business venture, but it’s going to take more than resolutions to ensure that your new business is a success.

For many, January is a great time to start a brand new project. Whether it is fulfilling a dream or proving to yourself that you can make it happen, entrepreneurs like to turn ideas into reality through the sheer power of inspiration and positivity. However, it is worth noting that spark of launching a new idea or a new business could soon die out without you taking the much-needed first step to making it happen. In this article, our small business accountants in London would like to share five key points that are inherent in the success of any new business.

The five keys to planning for new business success

1. Research

Behind every innovative idea, there are many right questions asked in the right way to the right people. Collectively, these questions have one single objective, which is to help you learn about your idea, your customers, your competitors and your industry, ensuring that you are approaching your new business from a far more educated and prepared position.

Proper research allows you to identify:

• Whether or not there is a demand for your products and/or services in your target area?
• What are the key demographics of your market?
• Who are your customers?
• Who are your competitors?
• What are your competitors’ main strengths and weaknesses?
• What are the major trends or problems within your industry?
• What other factors that will dictate the success of your venture?

Research does not need to be cost-prohibitive either. Common research methods include:

• Personal interviews
• Using social media or an online survey site to conduct online surveys
• Telephone polling
• Running focus groups

Once you have collected the data, the next step is to organise and analyse them. If you aren’t convinced of the result, run the research again but never ignore the data. For example, if your data indicate that 85% of your potential customers will pay with a credit or debit card, and despite you aren’t fully convinced, don’t ignore this and launch your business with cash as the only payment option.

2. Create a business plan

Constructing a robust and clear business plan will help you to prioritise, gets you funding, and it will also allow you to appropriately test your financial projections and establish whether or not your business can be profitable.

While every business plan is different, there are a number of things that will help to attract investors, such as the background and work experience of the entrepreneurs involved, the aims of the business, financial summaries, logistics, among others.

Contrary to popular belief, a business plan isn’t a document that is set in stone – it’s a continually evolving document that should be updated and revised as a business grows from strength to strength. As it plays a vital part in your business operations, it pays to know how to craft a strong business plan. For more information on how this can be achieved, please read our previous article on how to create a robust business plan.

3. Business funding

For many new businesses, a lot of early cash comes from self-funding as well as money from friends and family (known as ‘love money’). While self-funding and love money are crucial in those early days to get the business off the ground, they are finite and usually can only sustain for a short period of time. They are also risky – potentially causing irreparable damage to long-standing relationships and friendships.

So wise entrepreneurs tend to also have other funding options in place. Start-up loans, bank loans, B2B specialist lender, angel investors, crowdfunding, venture capital, P2P lending, grants are all viable options available to help entrepreneurs meet their personal living expenses while the business strives towards the goal of profitability.

For more information on the various funding options available to small businesses, as well as advice on how to best secure the much-needed funding, our article What is the right source of funding for you? may make a good read.

4. Choose the right business structure

Sole proprietorship is the most popular business structure in the UK because it is easy to set-up. All it takes is for you to register with HMRC and you are good to go, running the business and keeping all of the profits as your income. You will, however, need to pay tax and National Insurance by filling out a Self Assessment Tax Return every year.

While sole proprietorship is easy, it does have its downsides, most notably:

• As a sole trader, you are responsible for all liabilities (including any debts that your business might accrue) and they will affect your personal finances and assets.
• Taxation rates of sole proprietorship can be less favourable in comparison to a limited company.

There is no ‘right’ or ‘wrong’ answer when it comes to choosing a business structure – it all depends on what will suit you and your business at this point in time. So it is best speaking to an experienced small business accountant like our team at Berley before you charge headfirst into setting up a sole proprietorship or a limited company.

5. Find a qualified mentor

Most entrepreneurs see their business as an extension of their being – they invest their time and effort and they are emotionally attached to its operation. While being dedicated is admirable, beware that it may also prevent you from looking at things objectively – this is where a business mentor can help.

A business mentor is someone who can work with you and assist your business to reach its potential. Ideally, they have experienced what you are going through now and they are here to encourage you, identify issues, and discuss with you the actions you need to take. They can assist in a number of areas including business planning, financial management, staffing, to name but a few. If you are interested to know more on this subject, check out this article How business mentor can help small business owners.

Berley can help you launch your new business

One of our clients told us that looking for a small business accountant from the very start wasn’t part of his initial plan but he was glad to find us early on and got us involved from financial matters to law and compliance, giving him and his business the best opportunity to succeed.

The thing that sets us apart is we are entrepreneurs too. We’ve been there and done it – we know what it takes to build a successful small business and we’ve been around working relentlessly with many other entrepreneurs in London who also have had great success. So we pride ourselves as specialist accountants in all matters relating to small business. Working with us, you will immediately notice that we take a ‘hands-on’ approach to clients embarking on a new business venture. We support our clients and help them navigate many accountancy and financial issues. With us by your side, you can truly focus on running your business, instead of getting bogged down by the administrative side.

So start your new year off with a bang by getting in touch with Berley and our team of small business accountants today on 020 7636 9094 and find out how we can best support you in the pursuit of exciting new opportunities.

If you liked this article, you might also like:

• Why negotiation skills are important for small business owners
• How to get the best out of your accountants
• Customer experience: a discussion worth having

This post is intended to provide information of general interest about current business/ accounting issues. It should not replace professional advice tailored to your specific circumstances.