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How to start your own business!
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All the help you need on one clear, simple web page!

Here's a simple introduction and a list of over 100 of the best pages we could find, helping you to get a business idea, write a business plan, get the finance, sort out the practicalities, and avoid the pitfalls. It's all the information you need to shake the job you hate and get started on your own—all on one handy, uncluttered web page!

Good luck! We hope you find this page a help.

Last updated: 8 March 2010.

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It's time to set up your own business!

Have you ever wondered why you spend 30, 40, 50, or more hours each week—a third of your time—slaving away for someone else's benefit? True, they pay you money—but they make more out of you than you make out of them. Logically, then, why do you do it? Isn't it time you switched that effort over and put it to work for your own benefit? Isn't it time you set up your own business or started working for yourself?

Here we look at:

  1. How to get your idea
  2. How to sort out the finances
  3. How to manage the practicalities
  4. How to market your idea
  5. How to avoid the pitfalls

1. How to get your idea

There are lots of working for yourself. If you valuable knowledge or experience, maybe you could become a freelance contractor or consultant. If you're skilled a craftsman or artisan, maybe you could do the same job you do now but on a self-employed basis? Whatever you do, you can't start out in a business of your own without an idea of what you're going to do or how you're going to make money. So getting your idea is the starting point when it comes to working for yourself.

It's worth spending some time thinking hard about this. Buy yourself a pad of paper and scribble ideas for things you might do. Perhaps the most important question is: do you like what you're doing at the moment? If you're working as a bricklayer for a building firm, you love building things, and you're good at what you do, it makes sense for you to start a building business of your own. But if you're a bricklayer and you hate it, what other ways do you have of making money? If you hate what you do, you need to find a new avenue.

There are really just two ways of making money. One is to sell goods you make yourself or sell services that you provide using your skill, knowledge, or expertise; the other is to buy and sell things at a profit. If you like the idea of selling things, you could start your own shop. These days, you can start a shop with very little outlay simply by buying or selling on eBay, on Amazon marketplace, on Abebooks (a secondhand book retailer), or even by setting up a simple website of your own. But you still need to decide what it is you'll be selling!

Another option is to buy a franchise, a stake in someone else's established business. They usually provide everything you need, from the business idea to the marketing experience and the stationery you use. Franchises are available covering almost every business opportunity you can think of, but the drawback is the often considerable investment you have to make upfront.

Try to do a "gap analysis": what gaps in the market can you see and how could you fill them.

Further info

Here are some links to help you get your idea:

General introductions

Ideas for businesses

Entrepreneurs

Consulting and freelance

Self-employment

Franchises

2. How to sort out the finances

One thing you very quickly discover about working for yourself is that the nature of your job changes. If you're a bricklayer today, all you have to worry about is that one, single job. If you set up your own building company, you will suddenly have to worry about a lot of financial, legal, and administrative details as well. Do you want to do that? A lot of people find the financial side of things very challenging. One option is to employ someone to look after your book-keeping or to pay an accountant to prepare your tax return each year.

But you will still have financial worries. When you first start out working for yourself, who will you work for? If you have no customers, you have no custom—and if you have no custom, you have no income. If you're starting a shop or some other business that needs upfront investment, you have to consider how you will bridge the gap between your initial financial outlay and the point where you start making money. In other words, how will you manage your cash flow? Even if you work as a self-employed consultant, such as a contract computer programmer or freelance writer, there will still be a period between when you first start working and when you finally get paid. You may have a period of several months with no income at all. Are you prepared for that? Will your bank tide you over with a loan or an overdraft or do you have savings that can bridge the gap?

You also have to remember things like tax. If you're self-employed, you will pay your tax in arrears every six months (in the UK at least), but the amount you pay depends on what you earned in the last financial year. So if you income fluctuates from year to year, as it will, you may find it hard to know how much money to put aside to pay your taxes. If you don't pay your taxes when you should, expect to be charged interest and possibly a fine as well.

If you work for a big company now, you probably get all kinds of big company perks like pensions, life assurance, sick leave, subsidized time off for childcare, and so on. All these things disappear when you work for yourself. You'll find your definition of "sick" becomes a bit more strict. Maybe a cough or a cold was enough to take a day's sick leave when you were employed by IBM or General Motors. But, work yourself, and it'll take much more to keep you in bed—because every day you're not working is a day you're not earning.

If you need to borrow money from a bank to start your business, they will almost certainly want to see some kind of business plan. A business plan is a practical statement showing what your idea is, how it will generate income, what your budget is for all the items you need, and how your business will develop over its first few years. The plan's job is to prove why anyone who invests in you isn't going to be wasting their money. If you have a great idea but a lousy business plan, you may never get things off the ground. Your bank will want to see that you have the ability to execute your idea; they're not interested in throwing money at unrealistic daydreamers.

Further info

Here are some links to help you with finances:

General

How to write a business plan

Investment and venture capital

How to find an accountant

How to manage your accounts and bookkeeping

3. How to manage the practicalities

With the idea in your mind and the finances in place, there are all sorts of practical details you need to consider. Do you need business premises or can you work from home? What about a snappy name for the business—or will you just trade in your own name? Will you need transport... office equipment... stationery? Can you get any of these things inexpensively to start you off, or would a smart new van make all the difference to your image and the success of your business? Maybe you can buy used office furniture on eBay or from a secondhand outlet near you?

The best approach is usually to start small and conservatively, within the budget you have set yourself. You could start off in a garage (like Jeff Bezos did with Amazon or Steve Jobs did with Apple) until you have the finances to do something bigger and better. You could use a door as a desk (again, as Jeff Bezos did) and pick up secondhand office chairs and filing cabinets for next to nothing.

You could even run your business entirely from home, but it's worth remembering that your personal life will suffer if you cannot clearly separate your home and business life. Do you really want to be sitting at the computer at 11pm answering email enquiries? Do you want the phone ringing with orders while you're bathing the baby or having dinner with your family? If you're running a business from home, consider isolating it in a separate room of your house or an outbuilding, with its own separate phone line (and answerphone). Set boundaries, like strict working hours (9am to 5pm), and try to stick to them. Alternatively, try to set a limit on the number of hours you work per week. Then, if you do work on a Sunday, take another day off in the week to compensate. Remember why you decided to work for yourself: to escape being a wage slave! If you become a different kind of slave and your personal or family life suffers, what gain have you actually made?

Further info

Here are some links to help you with the practicalities:

General

Legal obligations

Choosing a solicitor

Tips for working from home

Designing your own home office

4. How to market your idea

Marketing is a big topic and I could talk about it for days—but there are really only two issues here. First, how will you get and keep your customers? Second, how will you stay ahead of your competitors? The answers to both questions will depend on the kind of business you're in. If you're a bricklayer, getting customers may be as simple as being good at your job. Word-of-mouth recommendations from the people you build for could keep you in business till the day you retire. Most of us aren't so lucky. If you're running an online shop, for example, people have to know that you exist before they can spend money on your products. So you have to be able to promote what you do somehow, either by advertising in the real world, advertising online, creating online word-of-mouth and links to your site, or whatever strategy it might be. Many people find Google's Adwords advertising a brilliantly cost-effective way of promoting a website because it can bring precisely targetted traffic to your website.

Some businesses can survive with just a handful of repeat customers. Farmers, for example, may sell everything they produce to a diary firm or a supermarket chain. An arrangement like that can provide security, but it makes you extremely vulnerable if you lose your one and only customer. And, don't forget once again, why was it you started working for yourself? If you're bowing and scraping to a customer who is, in effect, your boss, having everything you do dictated by someone you resent, what gain have you made? In the long-term, you're always in a stronger position if you have a diversity of customers.

Are you a competitive person? Maybe you thrive on beating your rivals, or maybe you're the sort of person who always likes to "play it nice". If you work for someone else's company, you may not have to worry about the competition at all. But if you work for yourself, you do. No matter what business you do, there will be other people doing exactly the same thing, sometimes better, sometimes quicker, sometimes cheaper. The question is not how you stay one step ahead—it's how you stay in business. Suppose you work for years building up a factory making clothes for a high-street chain store. Then, one day, out of the blue, the store decides to buy the same clothes for half the price from a developing country. Where does that leave you? It's a competitive world and you have to bear that in mind from the minute you start out in business.

Further info

Here are some links to help you with marketing:

How to understand the competition

How to promote your business

How to promote your website

How to use public relations

How to improve your customer service

5. How to avoid the pitfalls

What can go wrong if you work for yourself? All kinds of things. What if you have an accident of some kind and have to take months off work? What if you do something wrong and someone sues you? Suppose you set up in business with some of your best buddies and they turn out to be rather better as friends than as business partners? What if your key staff or leave the firm at the same time? There are lots of things you need to consider and plan for if you possibly can. But don't let them stop you taking what may be the great opportunity of your life.

Look at it this way: What if everything goes right? What if you finally channel all the time you've been wasting all these years into making your life more interesting and your family more secure or wealthy? Isn't that a chance you'd like to take?

Further info

Here are some links to help you avoid the pitfalls:

Common mistakes—and how to avoid them

Partners and friends

Get-rich quick schemes and scams

Exit strategy

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