Starting up your own business

At some stage during your working life, the chances are that you will feel uninspired by your job, hampered creatively by your boss and generally fed up that the progression of your career is in the hands of others.

Most of us either shrug our shoulders and get on with it or scour the job pages for a fresh opportunity. But there is another option, one which gives you an automatic promotion to boss, is highly varied, allows you a free hand in decision making and can be highly profitable - starting your own business.

Around 400,000 new businesses are created every year in the UK. The entrepreneurs behind these firms have various motives for starting up, but most are unhappy at being stuck in a rut at work, want to do something more closely matched to their interests or skills and have a strong desire to be the employer rather than the employee.

Inspirations and Ideas

Stories of entrepreneurs who are struck by flashes of inspiration and effortlessly turn their ideas into multi-million pound businesses are common in the media, but in reality good common sense is as important in propelling a venture forward as an innovative concept.

For example, the entrepreneur Dominic McVey had the brainwave to import scooters from the USA to an untapped UK market when he was just 13. However, this potential goldmine was only realised through McVey's clever marketing skills and sensible business strategy. A good idea must be backed up with sound business practices.

But how do you come up with and develop an idea? Entrepreneurs take inspiration from a variety of things - something they've seen abroad, an existing business they could adapt or improve or a personal experience when they've needed a certain product or service but it doesn't exist.

Try taking a close look at your local area. What kind of business does it lack? What kind of demand would there be for your idea? What competition is there? Is there a large enough gap in the market for your venture?

Many entrepreneurs start up a business based around their skills or hobbies. While this is potentially the most rewarding kind of business to start, you still need to consider the above points. Even if you have a passion and skill for floristry, setting up a florists in an area that contains ten other flower retailers would be foolish unless you are offering something genuinely different.

Once you have formed an idea, discuss it with friends and family to test its feasibility. As they are consumers themselves, they will be able to point out any flaws in what you intend to offer. People close to you are important and give free sources of advice and are likely to let you know if your idea isn't good enough.

Let them help you develop the idea and don't be afraid to take on board criticism. Are the problems mentioned likely to derail your idea or can they be easily overcome? Be careful not to press ahead with a gaping hole in your plan - an 'I'll deal with that later' attitude is often fatal to your business' chances.

Your life and your business

At this point, it's also worth considering the impact your new entrepreneurial career will have on your life. Starting up a business is an intensely time-consuming process, with many things to sort out at once. Almost all of your waking hours will be spent getting stock, marketing yourself or securing clients. Even basics like getting the cheapest stationery or getting an email address up and running can eat into your time.

Will your family be understanding about this kind of lifestyle? If there are considerations such as childcare or looking after relatives, you must think hard whether working exceptionally long hours with uncertain income is the best choice for you.

Your life could be disrupted for some time too - it can take several years hard work before your business is profitable and you can start handing some of the responsibility onto staff.

Ultimately, you will have to be dedicated and highly self-motivated - when your friends want to head down to the pub and you have to complete your tax returns, unfortunately there's only one choice to make - and it doesn't involve drinking lager and playing pool.

If you struggle getting into work now, you may find it hard when you are your own boss and can effectively set your own deadlines. Although it may be tempting to stay in bed until Neighbours is on, go shopping or talk a walk in the park, you have to be determined to get up and start your working day.

Business Plans and Finance

Once you have your idea in place and are prepared for the long slog ahead, you need to start putting together your business plan, which in turn forms the basis of how you will attract funding from the banks or other investors.

The business plan is your mission statement - its sets out what you are going to do and how you are going to do it. To work out your structure of your business and its profitability, which the banks will need to know before they hand over a loan, you need to ask yourself a few questions.

What kind of business do you want to start up - will it be just you or do you want to go into partnership? Will you work from home or do you need to work from an office/shop/factory? How long will it be until you are profitable?

The business plan allows you to assess the strengths and weaknesses of the venture and helps you avoid pitfalls. Of course, unforeseen circumstances can render your business plan out-of-date, but it's a useful tool in keeping the focus of your business and allowing potential investors an insight into how you plan to do things.

Most budding entrepreneurs approach their bank for startup funding, but business angels and other investors are interested in providing capital to certain ventures.

Organisations like the Prince's Trust and Shell LiveWIRE can provide grants if you are a young or come from a disadvantaged background. There are also various government programmes, run by the Department of Trade and Industry, such as the Small Firms Loan Guarantee scheme, which safeguards bank loans.

When approaching an investor, make sure you have done your sums. They will want to see how much you want, what you need it for and when they will get it back. Make sure you don't overburden yourself with a large startup debt, but also ensure that you have all your costs covered.

If you are using a bank for your finance, as nearly eight in ten small firms do, make sure you make the most of the services they offer. Look out for the best deal on the high street - many entrepreneurs stay with the bank they already use, rather than search for the best business account. Think about whether you want a relationship manager to help you with your finances or if you would prefer telephone banking.

Next month, we will look at how to go about taking the next step and developing your business. For further advice, news and features on starting up, go to www.startups.co.uk