Build a winning business

This week, the Office for National Statistics released data on the number of business 'births' and 'deaths' in the UK last year. It's strange terminology to use about businesses but it basically means: how many businesses were registered and de-registered in 2012?

There were 270,000 business births last year compared with 255,000 deaths. That's a death rate for the year of 10.7 per cent. In our region, Yorkshire and The Humber, 18,000 businesses went out of business last year. That's a death rate of 11 per cent, slightly higher than the UK average.

The really interesting figure, for me, was the five-year survival rate. This shows the proportion of the businesses that were registered in 2007 that are still active. For 2012, the five-year survival rate was 44.6 per cent. Less than half.

Why do so many businesses fail at the first hurdle? What can you do to make sure your new business succeeds? Well, mostly it's about poor preparation, planning and financial management. Here are three simple tips to ensure business start-up success:

1. Research your idea and the market
You may have an idea, but is it any good? Does it translate into a viable business proposition? Research your product or service. Understand what the demand is and who your competitors are. This should be part of a water-tight business plan, which should be backed up by recent evidence and figures.

2. Understand how much you need and where it's coming from
Cashflow forecasts. Profit and loss projections. Balance sheets. Overheads. Have you got a thorough understanding of what it is going to cost to start your venture? How much will you need for the day-to-day running of the business? If you can't demonstrate to a bank manager or other lender that you understand the financial side of your business, securing finance will be tough.

3. Think about the business, not just the idea
A business isn't just a product or service. It needs people and functions to get off the ground and stay there. How will you market the firm to new customers? Where and how will you sell to them? What budgets will you allocate to these separate functions? Again, all of this should be part of a solid business plan and we can help you with that.

Here at Grants, we understand that most businesses start because the owner has an idea. But that person isn't necessarily a financial genius. More often than not, they need some help. We're experienced in and can help with all aspects of starting-up, including:

  • Choosing the most appropriate structure
  • Registering with Companies House and HMRC
  • Preparing business plans, forecasts and projections
  • Raising start-up finance and capital
  • Setting up systems and processes to run the business efficiently.

Call us on 0113 233 8600 today or email info@grants-acc.co.uk to see how we can help.

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