Starting a Business For Dummies®, 5th UK Edition

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Library of Congress Control Number: 2021947387

ISBN 978-1-119-83224-9 (hardback/paperback) ISBN 978-1-119-83225-6 (ebk)

ISBN 978-1-119-83226-3 (ebk)

Introduction

If you pulled this book down from the shelf or had it passed to you by a friend or loved one as a gift, you don’t have to be psychic to know something about your current business situation. You may be in need of this book for any number of reasons:

A relative, hopefully a distant and elderly one, has died and left you, rather than the government or a dogs’ home, a pile of dosh and you don’t fancy leaving it to your stockbroker to lose on your behalf.
Your employer is in the middle of a major downsizing operation, not such an unusual event these days, as well as proposing to close its final salary pension scheme and relocate to somewhere with lousy schools and no healthcare facilities.
You’ve a great idea for a world-beating product, bigger than Apple and Amazon combined, that no one has ever thought of but every one of the world’s billion-plus internet users desperately needs. When they hear the good news, they’re going to click a path to your website.
Your brother, sister, father, mother or best friend – or worse still, all of them – has started his or her own business and retired to a chateau in France to breed horses, tend the vines and sail on a luxury yacht.
You’ve heard that the World Bank’s Doing Business study has revealed that Britain is the best big country in Europe to start, grow and run a business. Fired up with enthusiasm, you’ve decided it’s now or never to get your business off the ground.

If your present situation is founded largely on luck and serendipity, that isn’t enough to get you through the business start-up process unaided. Good ideas, hard work, relevant skills and knowledge about your product and its market, though essential, on their own aren’t enough. The 350,000 small firms that close their doors every year in the UK, a figure that rose sharply in the recent pandemic, are evidence enough that the process is a tough one.

This book is aimed at you if you want to start up a business or to review your prospects in the small-business world. It brings together, from a wide variety of sources, the essential elements of knowledge that are a prerequisite to understanding the world of small business and to achieving financial and personal success, whatever the economic weather.

About This Book

Most business failures occur within the first 18 months of operation. That fact alone has made it increasingly clear that small businesses need special help, particularly in their formative period. The most crucial needs for owners and managers include the following:

Help in acquiring business skills in such areas as basic bookkeeping and accounting. Most failing businesses don’t know their financial position. Even if the order book is full, the cash can still run out.
Knowledge of what sorts of finance are available and how to put themselves in the best possible position to raise money. Surprisingly, funds aren’t in short supply. Rather, problems lie in the business proposition itself or, more often, in the way in which the owner makes the proposition to the financier.
Information with which to make realistic market assessments of the size and possibilities of their chosen market. Over-optimism about the size and ease with which a market can be reached is a common mistake.
Skills and tools to grow their businesses into valuable assets to pass on to family members or to sell and then sail off into the sunset.

This book gives you help in all these areas.

In addition, every business needs a business plan, a statement of business purpose, with the consequences of each element of that purpose spelled out in financial terms. You must describe what you want your business to do – who its potential customers are, how much they’re likely to spend, who can supply you and how much their supplies cost. Then you must translate those plans and projections into cash – how much your business needs, how much you already have and how much you expect ‘outsiders’ to put in. This plan also helps you to avoid catching the ‘common cold’ of small businesses – underestimating the amount of start-up capital you need. Going back to a bank and asking for 30 per cent more funding six months after opening your doors and retaining any credibility at all is difficult, if not impossible. Yet, new businesses consistently underestimate how much money they need to finance their growth. Many people have never prepared a business plan, don’t know how to start and need information. That’s where this book comes in. It gives you the information you need to formulate and follow a business plan.

The book is also invaluable to innovators, who have special problems of communication and security when they try to translate their ideas into businesses. All too often, their inventions are left for other countries to exploit, or they feel unhappy about discussing ideas, believing that a patent is their only protection. However, more often than not, these business owners simply don’t know who to talk to, little realising that sophisticated help is often close at hand. Thus this book illuminates a path from the laboratory to the market place so that small firms and inventors can see a clear route.

Starting a Business For Dummies can help you succeed no matter what kind of business expertise you’re looking for. If you have a great and proven business idea, you may want to plug straight into finding out how to raise finance. If you need more than just yourself to get your great business idea off the ground, you may want to discover how to find great employees or perhaps a business partner to take some of the financial and emotional strain. This book is set up so that you can dip in and out of it in a number of ways depending on your situation.

If you haven’t started a business before, or been profit accountable for part of an enterprise, you may want to start at the beginning and work your way through.
If you’re more experienced, you may start by selecting the areas you’re less knowledgeable about to fill in the gaps, and then work outwards from there.
If you’re quite confident in the business world, you can use this book as a guide and mentor to review a particular topic. You can even use it to plan to sell your business after it’s established and move on to a different challenge.
If you learn by example, you may want to flip through the book, using the True Story icon as your guide. The text next to this icon highlights ‘straight from the horse’s mouth’ examples of how entrepreneurs have tackled specific situations successfully, be it finding a partner, raising finance or getting a free grant from the government.

Foolish Assumptions

This book gathers together the essential, need-to-know information about getting a business up and running. It assumes that you’ve not yet been in business but that you’re giving some serious thought to starting one. It also assumes that you can produce and deliver products or services that people will be willing to pay you for. These products and services can be anything – you’re limited only by your imagination. Finally, this book assumes that you don’t already know everything there is to know about starting your own business but that you’re eager to get cracking.

Icons Used in This Book

To help you pinpoint vital information, I’ve placed icons throughout the text that highlight nuggets of knowledge.

This icon calls your attention to particularly important points and offers useful advice on practical topics.

The Remember icon serves as a friendly reminder that the topic at hand is important enough for you to make a note of.

Business, like any specialist subject, is awash with specialised terms and expressions, some of which may not be familiar to you. This icon draws your attention to these.

When you see this icon, I’m alerting you to the fact that I’m using a practical example showing how another business starter has tackled a particular topic. These examples are usually businesses facing today’s difficult environment, and often you can apply the example to your own business.

Proceed with caution; look left and right before crossing. In fact, think carefully about crossing at all when you see this icon, which alerts you to potential dangers.

This icon refers to specialised business facts and data that are interesting as background data but not essential for you to know. You can skip paragraphs marked by this icon without missing the point – but reading them may help you build credibility with outside investors and partners.

Beyond the Book

As you travel on your journey of discovery through starting up a business, you can augment what you read here by checking out some of the access-anywhere extra information that is hosted online. You can find the book’s cheat sheet by going to Dummies.com and typing “Starting a Business For Dummies UK edition Cheat Sheet” in the search box.

Where to Go from Here

Take a minute to thumb through the table of contents and get comfortable with the topics the book covers. Pick a chapter that strikes a particular chord with the aspect of starting a business that’s uppermost in your mind, such as finding the money or doing business online. Read that and see where it leads you. You can also use Chapter 6, ‘Preparing the Business Plan’, as a framework for gathering knowledge and dive into the other chapters as you go. If all else fails, start at the beginning. That technique has a pretty good track record.

Starting a Business For Dummies®

To view this book's Cheat Sheet, simply go to www.dummies.com and search for “Starting a Business For Dummies Cheat Sheet” in the Search box.