Tips To Running A Business Successfully
So, you’ve been in the industry for a while now and are wondering whether running a business is for you. Well, I’m here to give some advice on business ownership and hopefully get you moving in the right direction!
There are many different routes, but this post will cover three of the main ways: Licensing, Private Company, Sole Trader
What do these all mean? Here’s a brief explanation:
Licensing – This is where your brand is under another manufacturer. There are many advantages as they provide manufacturing/shipping etc. However, licenses have their downfalls too. If something goes wrong with your range, it becomes that manufacturer’s issue as they hold the license and not yours. It means their reputation into play if things go awry, which can be a bad thing on top of your own.
Private Company – This is where you set up an LTD company and holds its rights (this usually means having a 100% stake). You need to understand being a business owner comes with many legal responsibilities such as setting up accounts for tax purposes etc. However, professionals who know what they are doing do this, so don’t be put off. You also have more freedom in terms of design, marketing, and distribution than with a license; take the help of RemoteDBA.com for this.
Sole Trader – This is when you run your own business without incorporating it into a limited company. While this is not highly advised, many people choose to do this out of choice, i.e., wanting complete control over everything or being on low profits and wanting to keep everything under wraps. However, it can be a challenging route with lots of responsibility and has more risks than previously listed.
Tax – Whether you choose to run on the license or have your own company, all companies must pay tax. However, there is a difference between the two types of companies regarding who pays for it. For example, if you run on a licensing basis, your manufacturer will pay the taxes. However, if you run through a private company, then they are your responsibility which needs to be taken care of at the end of each financial year (31st March). Good accountants can help minimize how much you need to pay, but this is another cost involved in running your own business.
Marketing – This is a crucial factor when starting your own business. You need to be sure that you know how to market yourself and are prepared for the ups and downs of this side of things. Marketing is very costly, especially if you’re a new company looking to build your brand. For example, advertising in shops is expensive as they take a commission on any sales made. These costs will add up, so make sure you have savings behind you before getting stuck in!
On another note, marketing through Social Media sites such as Facebook has proven successful for many businesses due to its low cost but high reward capabilities. Websites like Kickstarter can also help with funding projects or even just ideas that require an initial investment but don’t mind waiting for the returns!
We all know how to market; it’s what we’ve been taught since our GCSE years. However, there are many other ways than just TV and radio ads that can be more favorable to specific audiences. Social media is starting to show its worth with businesses such as Facebook giving you a free page, making marketing easy peasy (although not necessarily cheap). There are other places like Kickstarter where people can vote with their money rather than voice through social media sites, bringing things closer to home!
Distribution – This is another important factor if you have your own company, whether it is private or licensing. Distribution covers what shops/sites etc., stock your product, and how much they charge for them (usually a certain percentage per item). However, many shops offer discounts, and it can vary depending on the type of business and how they are run. For example, if a shop charges 20%, you need to make sure that your product’s price is at a point where it will still be profitable even with this taken off.
Distribution is another way of selling things other than just keeping them in-house. If you have an online or physical store for your items, then you’ll need to find the right balance between price, available stock, and discounts based on customer loyalty. Make sure all prices quoted to customers are costs as well: markups can seriously damage your reputation as well as profit margins!
Legal issues – Probably one of the most overlooked aspects of starting a business, legal issues are extremely important and need to be taken into account. Thankfully there is lots of help out there, such as the government offering tools like ‘Which’ or even local solicitors who can explain how things work in more detail.
For example, marketing can be costly if you’re aiming for major TV slots, but what’s stopping other companies from using your promotion and copying it? It becomes an issue if they decide to sell at a lower cost than yours because the original ad was free! Lots of aspects may seem silly, but trust us, they’re not. A clear trademarked name, for example, would take years to get back, so make sure you have everything correct before anything hits the market!
Legal issues can prove to be a costly factor, so make sure you have the time and money to reclaim what’s yours if it falls into the wrong hands.
So, these are the main factors when running your own business: there are also lots of other things to take into account, however, such as tax (mainly for sole traders) or marketing through social media. We’ve given you ideas on how to get started, but at the end of the day, it all falls to one question: What do you want to achieve? If keeping track of costs isn’t for you, maybe a licensing scheme would be more suited! Good luck with setting up your company, and we hope this helped in any way possible!
It is just some general information that can help start your own business. If you want to run a company, make sure you keep up with the latest legal issues and marketing techniques. There are lots of ways to distribute items other than just supermarkets, so do your research!
Mustafa Al Mahmud is the Founder and CEO of Gizmo Concept and also a professional Blogger, SEO Professional as well as Entrepreneur. He loves to travel and enjoy his free moment with family members and friends.