“Furlough” is a word I had never come across until the Corona Virus crisis. Being on your company’s payroll, but – until the rules change on 1 July, not actually working for them must be very strange. In many cases, being furloughed could lead to an even worse state of affairs – a permanent reduction in hours and salary or worse still, redundancy. How awful.
Many people prefer the perceived security of an employed position than the alleged insecurity of being self-employed or owning their own business. Things may be changing. Many clients, friends and family have been in touch with me during this period fed up with the uncertainty surrounding their employment and for the first time, are looking for an alternative way to make a living. This of course would involve going it alone using the self-employed route or starting their own business. This is of course a big step and involves a compete mindset reset. Here are a few tips for those considering going it alone.
1: Decide what you want to do and stick to it: This is where many people go wrong; they start their business but take their eye off the ball, afraid to commit and looking at other ideas just in case theirs doesn’t take off. Wrong. If you believe in your business idea and have thought it through properly, why not give it everything? Diverting your focus simply dilutes your energy.
2: Work out the structure early on: Once you’ve decided what type of business you are going to get involved in, work out what structure would best suit you. Would you be going it alone or including a partner or partners? Including a partner or partners might appear to be the least risky option. Remember however that people change and with time, having a partner or partners may turn out to be a liability or a complete nightmare. Other things to consider would be whether to set up as a sole trader or limited company. An accountant should be able to help you make the right decision.
3: There’s no need to be an inventor! Having a unique business idea that no one else has thought of is fantastic and almost guaranteed to give you success. But don’t worry if your business idea has already been thought of. That shouldn’t stop you. Taking someone else’s idea and doing it better than them can lead to great success, so don’t feel you have to be an inventor. Taking on a tried and tested business idea can give you more security because there is more data available to help you analyse why businesses in your particular trade have succeeded or failed.
4: Get advice: Advice takes many forms. You could speak to your bank about banking and funding, a financial adviser about insurances and planning for the future, an accountant about taxation and company structure and a solicitor about contracts and legal affairs. In my humble opinion however, the most valuable advice would come from business owners who operate in your chosen field. Successful business owners love nothing more than to talk about their successes, so why not contact your competitors and find out how they did it over a coffee? You’d be surprised how many would give you time of day and share all their secrets with you!
5: Get your numbers right: This is probably the most important part of setting up a business. Work out best, worst and middle of the road scenarios for your business’s cashflow. Using phrases like “what if” will help you test the resilience of your business in various situations in the safety of a simulator as opposed to out in the real world where getting it wrong would cause real pain. Once you’ve done all this, get started with courage and enthusiasm. You may need a bit of luck, but you’ll never look back!