Have a go at our Do You Really Need a Business Plan Questionnaire below. Details on starting a new business are shown in the blog below:

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‘Everyone has at least one great business idea’. We have all been there, sat round a dinner table, down the pub, sitting on the bus, when inspiration strikes and an internal lightbulb goes off. It is often said that the business idea is the easiest part, the courage, commitment and positive action is where the real hard work starts.

Thanks to various government and social enterprise initiatives the development of new entrepreneurial talent has come to the fore in the UK over the past decade.

Easier access to funding and a range of readily available support has allowed the UK’s SME sector to flourish and it is now responsible for 99% of all private sector businesses.

The amount of content at the fingertips of potential business owners is huge, and unfortunately not all of it is good advice. Solid preparation and clear planning are the best ways to avoid becoming the 1 in 3 businesses that fail to make it past their 3 year of trading.

You have landed here because of your expressed interest in learning more about starting a new business. Please enjoy the blog below.

Industry Stats

The figure below shows some of the key industry stats including SME market value number of new UK based businesses. The sustained growth of the SME sector, increased support for new businesses and a recovering economy all help encourage creative entrepreneurs to begin their own ventures. Each adopting and adapting subtly different business plans to carve out their own unique offering.

The SME sector makes up 99% of all UK private sector businesses and accounts for 60% of all private sector jobs. Latest reports show that 1 in 10 UK adults run their own businesses and the number has been steadily rising since the turn of the millennium. A net 2 million more businesses have been created since that time with the UK now home to 5.7 million enterprises.

An increased encouragement to explore new areas of interest and learn new skills has been met with the slow growth of wages. This has, in turn, set a light under a vast number of people looking for career independence in the pursuit of their own financial freedom.

Money and the prospect of losing it is the number one fear and challenge faced by new entrepreneurs. For those that lack the foresight and planning of their businesses, it is generally a good dose of luck if they manage to survive for very long. Business owners that take the time and invest a small amount of money into careful and accurate business planning reduce those risks and give their business the best chance of success.

The average funds need for the UK startup is just of £14,000. The number is averaged out of widely varied sectors and locations. A startup in London, for example, may expect to spend in excess of £20k in start-up costs whereas new business in Wales could begin with less than £10k. It is a general number but is one reflected by the average loan amount agreed with those making use of the government-backed Start-Up Loans scheme.

We have split sectors into 13 broad categories. These are outlined with their popularity amongst new business owners by percentage in the graph below.

The most popular new business type by category from all respondents to our Planning Questionnaire is Food and Drink with Accommodation & Events and Beauty & Fashion following just behind. All categories have a multitude of varied sectors within them. There is, therefore a sector and a business to suit all types of people with all types of aims and all types of budgets.

Average Annual Net Profit for SMEs

The average net profit after tax for UK based SMEs is £9,300 per year. The number greatly reduced by the large number of sole-traders and microbusinesses who have net profits of around £8,000. Companies with 1-9 employees make double that with businesses employing 10-49 almost four times as high.

How Do Start-Ups Get Financed?

Securing funds for SMEs has long been a problem and is even harder for new start ups. As most high street banks will only lend to businesses with two years trading history it can be difficult to find the right funds to establish and grow a business. Personal savings and so called ‘angel investment’ from seasoned business owners or loans from friends and family remain a popular way of starting a business.

The government-backed Start-Up Loans initiative has given access to funding that small business owners and start-ups never previously were able to secure. The scheme has leant over £400m and backed over 60,000 new businesses and is shown to be the most common form of financing any new venture.

The table below shows the main sources of business finance and their associated percentage. In some cases, for larger projects, businesses may need to obtain finance from more than one source.

The layperson may be misled into thinking a fully written business plan would only be a requirement if looking for outside finance. Whilst it is true a solid business plan would be a pre-requisite for any form of form debt or equity finance the value of having a quality business plan cannot be underestimated. Even for those self-funding, a viable and robust business plan is a sure way to keep focused and accountable which will ultimately lead to better business decision making.

Importance of a business plan

Have a clear handle on business expenses and the forecasted sales and cost of sales of any new business is vital to its ongoing success. The careful calculation of the business’ revenue model, showing the number of customers it requires, in order to hit breakeven enables good cash flow management and reduces potential financial risks.

Any serious company should look to invest in a proper, written business plan in order to maximise its potential. The graphic below shows a high proportion of new businesses have invested in a professionally written plan and all new ventures should look to do the same.

So what can we say about starting your own new business?

Pros

  • There is easier access to start-up finance then previously available
  • It can lead to financial freedom and control over your own working life
  • It allows individuals to learn new skills and earn money from their passions

Cons

  • Any new venture requires financial outlay which can seem daunting
  • Takes time to build up a customer base and cashflow planning is therefore key

 

How you can succeed

The best way to get ahead of the competition and eliminate the biggest unknowns and risks when starting your own new business is to invest in a high-quality business plan. The investment is invaluable. We at MyBizPlan provide the highest quality and yet lowest cost business plan in the UK, for a minimal outlay you can obtain a high-quality, visually stunning, financially robust business plan. It will give you a greater chance of seeking that vital finance and in the long run, could save you thousands.

If owning and running a new business sounds like the kind of business for you, get started with a New Business Plan from MyBizPlan. Make that small investment today and get started on your own business journey

 

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