First Steps To Opening A Business

By November 24, 2017Uncategorized
blog

Hey All,

I wanted to share some of tips and tricks I have learned from setting up my own business that I wish someone had told me before starting!

I will outline the very basic first steps to create a functional business. There are three stages to the process:

  1. Will it work?
  2. Structure
  3. Sales

 Will your idea work?

When I was an out of work actor I needed to make some casual money. I’d heard of actors who walked dogs on the side for some extra income. It sounded flexible and fun and I wondered if it would make me enough money to make it worth it.

Research

Research isn’t some big technical process. It’s just working out what you need to know and then asking the right questions to get the information you need. And really do ask, ask customers, companies, suppliers – in my experience people like to be helpful and will give you as much information as they can.

First, I needed to know how much it would pay. I rang some friends who had their dogs walked and asked them how much it cost and how often they used the service. They told me they paid €17 per walk twice a week. That didn’t sound like bad money.

Next, research your competitors. Ring them up as a customer and go through the whole customer experience. ‘Hey, I’ve got a dog, I’d love to have her walked…’

This way, your competitors will work for you. They’ll give you their full sales pitch. They gave me their pricing (€17 per walk), their bundled deals (3 walks per week at €15 per walk, 5 walks per week at €14 per walk), their additional extras (dog minding €25 per night at their premises, €50 per night in my own home).

Now I had the nuts and bolts of the operation I had to work out if it was something that would be viable for me. So, say I had 10 dogs to walk in a week – that’s €170. If I had 20 that would be €340, and so on.

Then you need to look at what money you have to put in to get the operation off the ground.

First, you need whatever materials are essential to the business. As a dog walker all I really needed to do the job was a van and insurance to protect me in case of any claims.

Second, you need to put in some work to get sales – people need to know you exist before they can book you for work. I put some thought into the most simple, straightforward and cheapest ways to get my name out there. I decided I needed a website, some flyers, a uniform, some business cards and to have my van professionally sign written. By putting these basic promotional materials in place my potential customers could work out who I was and what I was offering. My flyers matched my t-shirt, my t-shirt matched my van, my van matched my website. Before handing over their dogs and their house keys – before even making an enquiry about my pricing – they could check out my website and see that I was a fully registered and insured dog walker.

Specifically, I worked out my upfront costs as follows:

  • Second hand van – €800 total
  • Insurance €77 per month
  • Domain name for my website: €9.99 per year.
  • Building the website on WordPress: €150 to have a simple WordPress designed (its actually free to get a template from Wix).
  • 100 business cards: €7.99 (from VistaPrint)
  • T-shirt printed: 2 t-shirts at €15 earch
  • 300 flyers: €30 (again on VistaPrint)
  • Sign on van: €270

Altogether, I had an upfront cost of €1,287.99 and then ongoing monthly expenses of €77.

Given that I had projected that I would get 10 clients each paying €17 per walk 3 walks per week, I was confident that I would make €510  profit per week. This seemed like a viable business that would meet my needs and make me enough money to focus on acting.

It was time to go for it.

 Structure

People find putting a business structure in place off-putting. In fact, it is straightforward and essential.

First, you need to decide whether you will operate as a sole trader or a limited company. There are important differences between these two forms of business. A limited company is separate from its directors and shareholders and the liability of shareholders is limited to the amount they have paid for shares – i.e. if there is a successful claim against a limited company the shareholders will only be liable to the value of their shares (which is at the discretion of the shareholder and can start from €1). If you choose to operate as a sole trader you will be fully liable for any debts or obligations of the business. Setting up as a sole trade is cheaper and more straightforward but offers less protection to you as an owner. If you set up as a sole trader you can turn your business into a company at any time.

Having made that core decision there are then four steps that you must take:

  • Register your business with the CRO. If you want to operate as a limited company you must follow the steps here. You may find it useful to engage the services of a company formation agent. If you want to operate as a sole trader, you simply need to register your business name which you can do by following the steps here.
  • Register your business for tax purposes with the Revenue. If you are progressing as a limited company you should follow the steps here. If you are progressing as a sole trader you should follow the steps here.
  • Set up a bank account – make sure to ask around to get the best deals for new businesses – when I started AIB gave me two years without fees which was very useful. Don’t rush these steps as with proper research you can make good savings.
  • Comply with your tax obligations – I cannot recommend enough that you get yourself a bookkeeper to keep you on track in relation to your tax obligations. A bookkeeper will cost around €15-20 per hour and you will only need them for around 2 hours a month. That’s €40 per month which, let’s be honest, is about the price of a round of drinks. My bookkeeper makes sure my books are up to date in case I ever get an audit which keeps my business safe. She keeps on top of me for invoices and receipts which keep the businesses finances flowing smoothly. Bookkeepers, in my opinion, are weird wee calculators who are following their passion and working their asses off – they get a buzz from every cent they save you – they will save you more money than you could ever pay them in a year – so make sure you get a bookkeeper. Also, get a good accountant to make your returns once a year. If you have a good bookkeeper he or she can just hand your books over to the accountant and it will be a quick and painless process.

Where are you now? You’re freed up and your business is secure. Your business is registered with the CRO and the revenue. Your insured against any risks. Your bookkeeper is keeping your finances ticking over. You know what you have have to spend every month and what you have planned to make every month.

Now all you have to focus on is making sales and doing the work.

 Sales

Getting sales is just about giving your offer to people who might be interested in taking you up on it. Put your flyers in shops, in letter boxes. Are you an electrician? Contact management companies and let them know your rates. Spend some money on Google ad words – that will bring your website up when people are actively searching for an electrician or dog-walker or whatever in your area.

Conclusion

So, there you go – you have an idea that is feasible. You’ve put in place a structure to mind the business and you’ve got out on the streets to make sales. All that’s left for you is to do the work that you are passionate about. Focus on your passion – do what you’re good at. If you’re an electrician and you don’t know how to make a website – spend whatever money you need to get a basic website. Think how many sales you could be getting in with a decent website and think how much time (and money) you will waste trying to make that website yourself. Weigh it up – is it better for your business to spend a bit of money for a quality product while allowing you to provide your core service? If so, get an expert and you focus on your core service.

Now that you know how to set up your business, what are you waiting for?