Things to Consider as a Young Entrepreneur
Over the past few years, the number of young entrepreneurs registered with Companies House has increased sharply. It seems as though people aged 16-24 are deciding to become their own boss once they've left school, rather than seeking standard forms of employment or further education.
Being your own boss can be liberating, no matter what age you are. Seeing your passion being turned into a business can be one of the most uplifting feelings out there. But, before you start your business, there are a few things you need to consider.
What type of business best suits what you're doing
Whether you're looking to grow your existing business, or start a new one from scratch, you need to know the structure that would best suit what you're doing. There are 3 common types of business structure:
- Sole trader
- Limited company
Each of these structures has its pros and cons to them. It's important you know exactly what each of them entails so you don't get caught up in anything you're not prepared for. To help with this, read our previous post What are the Different Legal Structures in Business?.
Choose an appropriate name and branding
While you may think that something cool and edgy is the way forward, your business name is the first impression your customers will have of your business. Try to keep it unique and suitable for what you do, this will help to differentiate you from your competitors.
There are a few rules you have to follow when choosing your company name though. Some of them are:
- It cannot be the same or similar to that of another registered company
- You cannot include certain characters, signs, symbols or punctuation
- It cannot be offensive
- You cannot include certain sensitive" words or impressions
You can find out more about the rules of naming a company on the HMRC blog.
When you're thinking about branding, this is where your personality can shine through. Think about the images, colours, and fonts that you want to be associated with while standing out from the crowd. Be creative while capturing the essence of the product and yourself.
Write a detailed and realistic business plan
A business plan sets out the goals of your company, your objectives and the strategies you'll use to achieve them and grow the business.
A business plan can be seen as crucial to the success of many businesses. They provide a clear path for you to follow, help you keep on track with your goals and allow you to make changes if needed.
If you are hoping to secure investment from funding bodies or other sources, you'll need to have a business plan. This helps to convince them you're worthy of their time and money. Thousands of businesses apply for investment every day, so you'll need to give them a good reason to consider you for it.
For an idea of what to include in your business plan, check our previous blog post:
Make sure you have enough funds
When you're a new company you may experience unexpected expenses along the way. However, there are ways that you can manage this type of cost. They can include:
- Using your savings
- Securing investment
- Securing financial support and loans
Dealing with the legal side of things
It may not be exciting, but one of the most important parts of starting a business is dealing with the legal requirements. There are plenty of them to think about, but we've included some here to get you started.
Some aspects of your business may need a license, such as, if you're selling food or alcohol. If you're a gas fitter, you need to be registered with the Gas Safe Register, the same can be said of other trade professions.
To find out more about licences check out our previous blog post:
Employers' liability insurance is compulsory if you have any members of staff. If you don't have this type of insurance you could be fined £2,500 for every day you're not insured.
There are other types of insurance you can have, but these depend on the type of business you have. To find out more about the different types of insurance check out our previous post: Do I need business insurance?.
This is the term used for something unique that you've created. It can be an invention, a product, the name of your brand or something you've written.
You can apply for a copyright, trademark or patent to stop someone else from using your intellectual property. There will be a cost for doing this. To find out more about intellectual property, check out this guide from gov.uk.
While this list is not definitive, they are some of the things you will need to consider when starting your business. These steps aren't always quick and simple, but they are worth spending some time doing and can be rewarding once complete.