Becoming a Successful Start-up A Guide for graduates
A s t h e w o r l d e conomy s l owl y wake s up f ol l owing the glob al fi n an ci al cr i si s, a w a v e o f n e w optimis m is s we e ping the UK e conomy dr i vi n g a n ew gen er ati on o f e n t r e p r e n e u r s to take bol dl y s te p towards making t hei r b usi n ess vi si on a r eali ty. D e s p i t e i m p r o ving c onditions and c onf ide nc e , curre nt ly m or e than 50% of n ew b usi n esses w i l l n o t m a k e it to the ir 5th y e ar of trading. The re ali ty for m an y would b e b usi n ess own er s i s t h a t a g r e a t conc e pt is onl y p art of the puzzl e to cr eati n g a vi ab le an d sustai n ab le com pan y.
A s a c omp any working hand in hand w ith a n um b er of youn g on li n e an d offli n e s tart ups we ’v e had the priv il e ge of bei n g a par t of som e gr eat, successful s tart up s torie s . B e ing p art of this j our n ey we’ ve com e to r ecogn i se som e of the ke y p itf al l s f l e dg l ing c om pan i es face i n those fi r st k ey year s an d hav e cre ate d this qu ic k guide to the star t up wor ld to help en tr epr en eur s in the ir f irs t ke y y e ars of tr adi n g an d those con si der i n g for m i n g thei r ow n bu s ine s s .
LET’S GET STARTED LET’S GET STARTED
Flat Rate VAT
You charge 20% VAT but only pay back a smaller percentage For bussiness projected to earn less than ÂŁ 150 000 If the business is set to make a large amount of purchases during this period.
em pt
ug s
e Fi
n io at
Sp
or
t
Ed
uc
Bo ld
na
Ex x Ta
ok
t
s
Ar
od
Fo Go
ce
i rv
e
S al
t
s Po
nc
Dr
ng hi ot Cl
Ze
ro
Ra
te
d
This may not be the best option where your business sells mostly zero rated or tax exempt products
Subsidised staff Costs Apprenticeships Apprenticeships are available to companies nationwide and can be a cost effective way where you have an appropriate role and the required time to provide support Apprentices can be trained as part of their course in Admin, IT, Retail An apprentice will currently cost the business only £2.73 ph in their first year If they are 19 or over however in year two this will rise to the national minimum wage Things to consider Apprentices will be at most qualified to NVQ level 4 or a Foundation degree which may mean that they require at least at first a significant amount of time and input to get them up to speed
Graduate Placements If you’re looking to hire recent graduate talent for your business expect to pay between £18,615 and £22,785 according to recent figures. There are a number of avenues available to businesses looking to recruit a graduate
Graduate Placements Local Univeristies Pros
Cons
Free to use job Ad services
Not all unis have students with the course
Great access to local talent
background you need Time consuming: you will need to contact universities
Recruitment Agency
individually
Pros
Cons
Will do pretty much all of the leg work
Can be expensive (typically 17% and 18% of the
Can be a fast way of finding the right candidate
starting salary)
Online Job Boards Pros
Poor agencies motivated by fees may propose unsuitable candidates
Cons
Access to a large national pool of Job seekers
Due to the ease of use tend to attract poor and speculative applications
Usually have a relatively modest upfront fee
Often charge for extras to make listings more visible
Internships last for three months Students are paid £1,000, 50% of which is covered by Santander Santander are currently working with a large number of top UK Participation by universities UK and world wide institutions to provide funding for SMEs looking to take students on internships. If things don’t work out there is no obligation for either party
Try Before You Buy
Building your Website What do you need from your website? Look Professional If you don’t take your website seriously your customers won’t take you seriously. Use your website to build trust with your audience. For example, if you are selling products online it will also be worthwhile having clearly displayed trustmarks.
Sell Your Product and Generate Leads Make sure your website can show-off your products and handle taking orders. In practice this means it has to work with an ecommerce platform. If you are not selling a product, your website should still be generating leads. This means it should be ‘Google friendly’ and have contact forms integrated with its content management system.
Security Online security is increasingly important, and is vital when taking payments. There are many ways to make your site secure. At the most basic level it should be HTTPS, have an SSL certificate and be protected by a firewall. You should also be confident that you (or your developer) can keep all the software up to date.
Data Tracking Regardless of the size of your business, you should be tracking your data to learn more about your customers. The best way to this is through installing Google Analytics on your website. Used correctly Google Analytics can provide you information on how your website is performing, how successful your marketing activity is and even give you insights into market demographics.
Practical Steps
Now you know what you need from your website, it’s time to figure out how you are going to build it.
Here are a few questions, and possible answers, to help you get started.
1
Should I hire a developer?
£5000-£20000 depending on your website
Hiring a developer can be pricy, but there are advantages:
Pros
Cons
They can build a bespoke website just for you
You need to know your web developer is worth the money
They can handle all security and technical issues
May be more than you need
You can focus less on your website and more on managing your business
More expensive
They will have expertise you don’t They can provide technical support
Do it yourself websites Luckily for many start-ups there are many platforms available to you to build our first company website yourself. The most widely used, and possibly best, is WordPress.
About Wordpress WordPress is an easy to use content management system, with thousands of themes and applications (called Plug-ins) to help you easily manage your website. Wordpress comes in two flavours;
WordPress.com and Wordpress.org
Wordpress.COM
Wordpress.ORG
WordPress handle all the hosting and other technical aspects of your website. You just pic a theme and upload your content. Business package cost ÂŁ 250 per year
Pros
Secure website Easy to use Access to premium themes makes design easier
For the more technically minded, WordPress.org allows you to use the WordPress software to build your website without the restrictions of WordPress.com. Sadly, with great power comes great responsibility and you will need to manage every aspect of your website yourself. Pros
Minimal Expenses
More flexibility in design and functionality Free to download Can be cheaper to run
Google friendly set up WordPress takes care of the hosting and website management Live support from WordPress
You can do pretty much everything at almost no running cost
Easy integration with three different Ecommerce platforms Ecwid, Shopify or Gumroad.
Cons Themes can make websites look samey Less flexibility More expensive than WordPress.org
Cons Requires more technical knowledge and time to set up and manage Does not come with support You are responsible for your website’s security
Online storage can be more expensive It Requires Huge technical knowledge to run and support
Doing the Books
It’s important to keep on top of your finances and the right side of the taxman. Here are few tips to help you do that. Use Excel Not the swishest way of doing your accounts, but backed up with a decent filing system Excel can be cheap and effective. Use an accountant
Use HMRC’s free tools For British based companies, HMRC provides software to help start-ups with less than 10 employees perform the basic payroll task. HMRC also provides a range of workshops to help you understand your tax position.
It may seem costly to seek professional advice at the outset of your business, or before filing your returns. But it will be a lot more costly if you get it wrong. Having an accountant look over your accounts can save money in the long run.
Cloud based software Xero
£ 20
Create purchase orders & bills Reconciles bank transactions Import data from Excel Payroll for 1 employee Smart, real time reports SageOne Create invoices Prepare VAT returns Connect to your bank with automatic feeds
£ 25
CheqBook
£ 12
Print reports and statements Import bulk transactions Offsite daily backup Fast Bank Reconciliation Free Training Kashoo
£ 12
Real-time team and accountant collaboration Project-based accounting Easy invoicing and expense management
Zoho
£ 18
Invoice, purchase and sales Recurring transactions Multicurrency, Expenses Inventory Time tracking FreshBooks £ 18 Automatic overdue fees Expense tracking and Imports Project managers Team timesheets Team expense reporting
Social media marketing Social media can be an excellent, and cheap, way of amplifying your message. Here is a rundown of the biggest platforms. Facebook
YouTube
Almost every company should look to use Facebook. The only exception, possibly, being professional services companies.
If you can produce video content then you should be putting it on YouTube
Your own content, but also other relevant content. Twitter is best for becoming part of the conversation around your product.
If you have it, share it here. Don’t be afraid to share others content if it’s relevant to your audience.
Once a day (or more)
How-to videos are a great way to boost traffic to your website.
Short video are better
As Reguraly as possible
Few times a day
TIP Focus on the best platform for you and do it well, rather than trying to use every platform and not giving any of them enough attention. Pinterest Fashionistas, designers and foodies. Anything creative and visually striking.
Google +
Linked In
If you have a well-developed Social media presence and have the time to add another platform.
Anyone looking to target businesses rather than customers
If you want to use Google+ for marketing be prepared to focus on the communities areas.
Company news, offers and market insights. Keep it professional!
koobecaF
Google+ rewards quality content (rather than advertisements) Few times a day
Once a day if possible
At least 2 times a week
Using Self Storage Facilities
Storage 1 What to consider?
It is now increasingly common for start-ups to utilise self-storage facilities to manage their stock. Here’s why: Flexible contracts allow you to upsize and downsize quickly No notice period; Low overheads Better security; 24 hour access; It’s easier to take large deliveries in a storage facility No business rates to pay VAT can be claimed back Secure receive and dispatch services
2
How much space do you need? Do you have a lot of stock? Do you have any space taking marketing collateral such as events stands? If yes- you need somewhere where you can store your goods Could you need more space in the future? Is your business likely to grow? Could you see seasonal spikes? If yes: then you need flexibility so you can expand your storage space as and when you need to
3
Is your stock Secure? Is there CCTV? Are the perimeters securely fenced? Not only is this important for your piece of mind and your business, but it may also have an impact on insurance costs.
THANK YOU AND
GOOD LUCK Created by