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Business start up presentation
- 1. HAVE YOU EVER THOUGHT ABOUT STARTING YOUR OWN BUSINESS? Basic guide to the fundamentals of starting a business By Chloe Welsby, Ali Hart, Sara Mcknight and Stefany Emsley
- 2. • What are you going to sell? – • Where ? - Online? - Benefits - Store? - Benefits • Is there a gap in the market for it? CREATING YOUR BRAND OR PRODUCT 19% Dislike Shopping Online Buy online ONCE a month!
- 3. SIZING UP THE RELEVANT MARKET 1. Measurability 2. Accessibility 3. Target Market 4. Size
- 4. RESEARCH THAT MARKET • Research tools your going to use? • Who are your potential customers? • The competition • What price can you charge your product? (Comparing to what is already out there)
- 5. WHAT’S IN A NAME
- 6. STARTING UP COST ON A BUDGETS Before you work out how to fund your business, you need to work out how much is needed. • Stock • Premises • Equipment and stationary • Website building • Logo and Brand design
- 7. FUNDING • DO NOT – Go too big too soon! • Where to get funding from? - Savings - Family and Friends - The Bank - Credit Cards - Grants - Investors
- 8. BASIC BOOKKEEPING USING EXCEL Picture 1 - Picture 2 - Picture 3 -
- 9. MARKETING VS ADVERTISING • Marketing – The action or business of promoting and selling products or services, including market research and advertising. • Advertising- The activity or profession of producing advertisements for commercial products or services. VS
- 11. SOCIAL MEDIA Social media is another platform to allow you to spread your business influences far wider than other marketing strategies at little or no cost. It provides another way of meeting business objectives and gaining new customers
- 12. SOCIAL MEDIA CONTINUED To make social media marketing work, you need to: • Make time to work it • Train staff on how to use it • Set aside a budget for advertising
- 13. SOCIAL MEDIA CONTINUED Benefits of Social Media Marketing: • Increased Brand Recognition • Improved Brand Loyalty • More Opportunities to Convert • Higher Conversion Rates • Higher Brand Authority • Increased Inbound Traffic • Decreased Marketing Costs • Better Search Engine Rankings • Richer Customer Experience • Improved Customer Insights
- 14. LEGAL AND TAX FOR BUSINESS IN THE UK • Legalities– and why they are important? • Business Structures • Employer and Employee Liabilities • Tax and VAT
- 15. LEGAL AND TAX FOR BUSINESS IN THE UK CONTINUED • Copyright • Trademark • Patents
- 16. • Money Laundering • Data Protection LEGAL AND TAX FOR BUSINESS IN THE UK CONTINUED
- 17. SALES OF GOOD ACT 1979 1. Lawful authority to transfer ownership 2. Goods will match description 3. Satisfactory quality 4. Suitable for any purpose specified by the buyer 5. Match any sample shown to the buyer prior to the contract
- 18. We hope now that you have listened to our presentation, you all have a better understanding of why most businesses fail and the key fundamentals of starting a business in the UK. Thanks for your time CONCLUSION
Editor's Notes
- CHLOE http://www.statisticbrain.com/startup-failure-by-industry/ As you all know we are all here on a business degree, and because of that I can properly guess a few of you have thought about owning your own business at one point, I know I have! So we decided to do this presentation on a basic guide to starting your own business most wont know that statistics show that the percentage of business fail – Year 1 = 25 %, Year 2 = 36 %, Year 3 = 44 % Major causes for this are – Living to high for the business Non payment of taxes No knowledge of financing No experience in record keeping Wasted advertising budget We have each taken on separate sections of our guide to present to you today, Sara is going to start with branding and sizing up the market, Chloe is going to explain startup cost and funding, Ali is doing advertising, marketing and social media, And last but most important Stefany is going to talk about legalities and tax of a UK business.
- SARA What are you going to sell? – When deciding what to sell don’t think about doing it for just the money, have a passion for what your selling and believe in the product. Online – - Most people today have to access to the internet, whether this be computer, tablet or phone - Wider customer base - Customers benefit is they can purchase from the comforts of the home It was reported by the daily mail’s consumer affairs editor (Poulter 13) that us brits spend an average of £1,175 million online that any other country. 3 in 4 buy online once a month with 1 in 4 doing their weekly food shop online. 71% smartphone users with access to the net shop online Store – You can try before buy! Easy to take back/ refund Don’t have to wait to receive your product Research also shows that 19% of British shoppers disliked shopping online because there worried about delivery and couldn’t collect if they weren't able to be home or have it delivered to work. I personally prefer the high-street as you can try clothes for example there and then, select the size, change items easily and not have to worry about sending items back or waiting for a courier to come and collect. Is there a gap in the market for it? - Have you ever wanted something and been able not to find it? Could others like yourself be looking for the same thing? If yes, this present a opportunity in the market.
- SARA The size of the market you intend to get into is a key figure that will be used by anyone reading your business plan, yourself included. That figure represents the total scope of the opportunity ahead and is the starting point in shaping your marketing strategy 1.Measurability – Can you estimate how many customers are in the segment? Are there enough to make it worth offering something different? 2.Accessibility – Can you communicate to them on an individual basis? 3.Target market - Who is your market? Do they have money to spend on luxuries? 4.Size –A segment has to be large enough to be worth exploiting it! Segmentation is an important marketing process, as it helps to bring customers more sharply into focus, classifies them into manageable groups, and allows you to focus on one or more niches.
- SARA Research tools – Visit competitor websites- point out the strengths and weakness For example, River Island’s website is clear and sections are well laid out. One weakness, I noticed was that there appears to be too much clutter on the first page. Another example is Topshop, their site appears cluttered but much like River Island, it is well laid out and the sections are clearly marked. Both sites are clear and easy to navigate around. This should be on the top of your list when researching your competitors websites, look at how their online sites are laid out and how easy it is to navigate your way around. Use social media – i.e. Facebook or Twitter If you do decide that you want to use Facebook to promote your business to your customers, look at their facebook pages. Are they easy to navigate around? Are they too cluttered? Are you going to use Social media ? Using Facebook page wisely, to promote special events, for example I know that the shop I work for has a Facebook page and it’s clear to see what’s currently happening in your local high street store. Potential customers will most likely be aimed at men and women from early teens through to pensioners. The shop that at tends to attract more women shoppers than men. Something else to consider is your younger audience, under 10’s and babies. Do you need to cater for them as well. At present my shop doesn’t cater for babies. Over the past couple of weeks we have had a few ladies asking for baby and toddler clothes for under 2-3 years. Charging prices that are similar to those of your competitors may be a problem, we would aim to charge prices that are similar to those of Primark and Matalan.
- SARA Business Names Act 1985 The business name must not include any prohibited words- Example FCUK had to change their name to French Connection. The business’s true name must be stated on business letters, order forms, invoices, receipts and written demands for payment. When choosing a business name, keep the following tips in mind – Choose a name that appeals not only to you but also to the kind of customers you are trying to attract Choose a comforting or familiar name that conjures up peasant memories so customers respond to your business on a n emotional level Don’t pick a name that is long or confusing Stay away from cute puns that only you would understand Don’t use the word “ltd” after a name unless your company is actually registered with Companies House. Is your name available? - www.ukplc.com small price of £12.99 Do you use you own name? Can you use your chosen domain as your web address? You can use this (www.names.co.uk/domains) to check the web address is available and purchase it!
- CHLOE Before you work out how to fund your business, you need to work out how much is needed. Stock – Calculate how much stock you need to start up with, make yourself a limit. Premises – Are you going to work from home? its EASY and FREE - Rent an office or shop or Purchase Equipment and stationary – Make a list what equipment you will need – start with the basics laptop, desk, printer etc. Once you have completed your list search on compare sites for the cheapest possible. REMEMBER your just a start up company, buy top quality products when you can afford it. Website building – Is not a big expense! There a many sites that offer all ready set up templates and check out services. One of the best out there is https://www.ekmpowershop.com that offer a 14 day free trial and a £25.99 a month service. - Logo and brand design – There are many companies that offer this service for those who aren't so creative, the cost can range from £50 – to hundreds depending on the company used.
- CHLOE When starting your business, do not go too big too soon. I cant stress how important this is, and it is because of this most business’s fail. FUNDING - Savings – If your lucky enough to have a large amount saved GREAT use that, why borrow if you don’t have to? Friend and family – are people you can trust. And hopefully money won’t come with strings attached! BUT do consider having a written agreement, that covers the amount borrowed and a payback schedule. The bank – High street banks are pretty eager to attract small business owners, for example Barclays offer £1,000 - £25,000 with flexible repayment options and fixed rates. DO ask to speak to a small business advisor at your local branch. Credit Cards – If your going to use a credit card make sure your fully aware of your limit and rates, shop around for the best rates! Make sure your on time with repayments and aim to pay back the credit as soon and you can when sales start coming in. Grants – Are available from a number of sources including the government and local authorities. An example of a popular grant organization with young people in business is the prince’s trust, which not only helps with start up funding but also assigns a mentor in your particular field. Investors – These can help raise large amount to start the funding of your business, usually come with a contract where you need to give a percentage of your business to them in exchange. One of the most popular Is Dragons Den but there are less public and gruesome investors like funding circle.
- CHLOE Excel is a necessary tool needed to keep track of stock, orders and profit. It’s a great application in business because you can use formulas to calculate for you, which changes when you change one of the fields. You also can use it for graphs and pie charts. Picture 1 – Shows calculating the profit per item by using using the formula = RRP – buying price For example if your RRP changes instead of having to calculate the profit for ever item individually you just enter in the RRP field and it automatically changes because of the formula. Picture 2 – To figure your profit total for one item this time you use the * symbol to times the profit per item by the number of items giving you the profit total for that items sales. Picture 3 – Shows that to calculate the profit total from all orders you must click the fields individually then press + before clicking the next once done press enter and this will give you your answer.
- ALI Marketing – The action or business of promoting and selling products or services, including market research and advertising. Advertising- The activity or profession of producing advertisements for commercial products or services. The best way to distinguish between marketing and advertising is just a small segment taken from a pie. Marketing is everything an organization does to facility on exchange between company and consumer.
- ALI All these segments on the pie can be used independently, but they also all need to work together to make sure the marketing strategy works effectively. Advertising is where you get the word out about your business/product/service. It involves the placement of an od in newspapers, TV, Radio, Billboards etc. Advertising is the most expensive part of the marketing pie. Advertising tells a story about something to attract attention – it is a stop in the marketing process. Marketing (in business) is the planning of, and steps taken, to bring merchants and consumers together.
- ALI Social media can enable you to gain new customers as it directs your followers to your website, but you need to utilize social media alongside other marketing strategies to reach all of your target audience – not all of your customers will like to use social media, so you cant channel all of your marketing efforts into it.
- ALI Make time to work it - You need to make enough time for yourself to get to grips with how to use social media marketing effectively for your company – you don’t want to create a Facebook / twitter page and have it just sat there not doing anything, you need to keep it up to date, and this will take a significant amount of time to do. Train staff on how to use it - You need to train your staff who have access to your pages on what they can / can’t put on there, for example, you don’t want them to disclose a client list, especially if your company stores a lot of client details on servers. You want your staff to put on items that will attract people to your company, so they should be trained on what is good marketing and also what will be entertaining and eye-catching for new customers. Set aside a budget for advertising - If you want your page to pop up on a lot of peoples newsfeeds as an advertisement, you need to set aside a budget for this, as a lot of social media sites charge for adverts - you don’t need to pay for a page, it is just if you want Facebook / twitter to promote your page for you as well.
- ALI Increased Brand Recognition - People can stumble across your company by pop-up ads on their newsfeeds, or by other people sharing your page - a lot of people share pages / status’ on social media for two reasons, one could be that they really like your product / company and they want to tell the world how good it was, the other reason could be that they have had a bad experience with your company and they want people to boycott your company. Both of these create a lot of brand recognition, although you wouldn’t want the negative comments being the reason why people know of you. Improved Brand Loyalty - By using social media as one of your marketing strategies, you are more contactable to your customers, which can mean that customers stay more loyal to you due to the fact that you can solve their queries quicker and easier than trolling through letters / emails. More Opportunities to Convert - Social media can change customers thoughts on your company / products if you post something on a social media site that they like or are interested in. Higher Conversion Rates - Brands can become more humanized through social media due to the amount of people talking about you – your replies to customers also helps this humanity show through, also the more followers / likes your page has tends to make new customers trust you more. Higher Brand Authority - Talking to customers a lot shows you care – when people are happy with a product they tend to tell everyone about it and show people – this can be a lot more effective through social media, for example, if a customer really likes a product that you have advertised on your Facebook / twitter page, then they are likely to share it on their homepage – if this particular customer has 500 friends / followers, then it is highly likely that 80% of these people will see your product too and out of that 80%, you can maybe get 40% who will be curious and visit your page to see what other products you have – this is a very effective way of marketing your product as you aren’t really having to do a lot. Increased Inbound Traffic - The amount of inbound traffic you get to your website is usually generated from people who already know about your company and they check back on your website to see if you have uploaded any new products – this traffic can be increased through using social media as people who see your pages will most likely then visit your website for more information. Decreased Marketing Costs - Using social media doesn’t cost too much as a marketing strategy, it is best to start out small and promoting your page yourself for free at first just to get an idea of what to upload and how well it does for your company, and then once you know what you are doing more then you can pay the social media sites to promote your page for you as well, although I would recommend setting a budget for this before you start so you don’t go too fast too soon. Better Search Engine Rankings - Having pages on social media sites ensure that your company shows up more on search engines, especially if you have a lot of talk about your pages. Richer Customer Experience - You are bound to get some complaints about your product / company on social media. There are many different ways you can address these, but the best way is to contact the customer directly and apologise for what they are upset about and offer solutions to their problem. The best way to do this is by publicly apologising to the customer (like they have done with their complaint) and asking if you can email / ring them to find a way to resolve the problem. This is a good marketing technique, as you can turn negative brand images into positive ones as you have acknowledged the problem and dealt with it. Improved Customer Insights - You also have a better understanding of what your customers like / dislike through using social media, as you can monitor what posts you have put up that have generated more followers / likes, by doing this you can ensure that you put more of these posts up to generate more customers that way – this also works for when people don’t like what you have put on your page, if you get a lot of negative comments on certain posts, then you can make sure that you don’t post similar items again in the future.
- STEFANY LEGALITIES – Although some people consider the legal and tax quite a boring subject or see it as intimidating and having too much red tape knowledge in this subject is essential to business running. Failure to comply with legal and tax issues can lead to bankruptcy, jail time, heavy fines or business closure. Due to the seriousness shouldn’t be taken lightly. Im going to briefly discuss some issues and facts. Ignorance of the law is no excuse for not adhering to it so it is up to you to figure out or get help with any potential issues you may come across in your chosen business field. For example a café would need to keep within strict food and hygiene laws and standards. A company called Enron for example had a quite massive and damaging legal issue. It was accused of 98 cases of fraud including money laundering, insider trading and creating falsified money statements. The company has since has to go bankrupt. BUSINESS STRUCTURE The structure of a business once you have decided this you can then define your legal responsibilities like what paperwork you need to fill in, what taxes you pay and don’t pay and who gets paid any profits at the end, or who is responsible for any losses the company makes. I have only concentrated on being a sole trader or partnership. I haven’t included anything about charities or limited companies as im assuming a start up business to not fall into these categories.. A partnership has the same responsibilities as a sole trader but this is split amongst the partners. As a sole trader you are responsible for any losses the company makes, any purchases or bills for your business and keeping records of incoming sales and spending. EMPLOYER AND EMPLOYEE LIABILITIES - You must register with HMRC as soon as possible when starting up a business and you must register for VAT if you expect your business takings to be over £81,000 per year. You will also have more responsibilities as a sole trader you will have responsibilities as a sole trader when you employ staff you need to provide a safe, clean working environment and protect your employee from discrimination etc and contract of employment laws such as redundancy etc must be adhered to. Your employee must be paid the national minimum wage whereas you as an employer or sole trader could end up below or even in a minus. TAX AND VAT - Tax wise you will need to send a self-assessment tax return every year and you also need to pay income tax and national insurance on your earnings. The inland revenue or an accountant will provide detailed information about what can and can't be claimed. The rule of thumb seems to be "wholly and exclusively for business use" so you can claim for work travel going to and from clients but you cannot claim the travel to and from your place of work. There are 4 vat bandings 1. Standard rate 20% most items fall under this category 2. 5% vat this contains home energy efficiency and car seats 3. Zero rate vat ie some foods and children's clothes. 4. Vat exempt ie admission charges by charities to museums. We have all heard of the huge legal battle between the makers of Jaffa cakes and the inland revenue, to decide whether the product was a cake so not liable for vat, or a biscuit which would have been liable for vat.
- STEFANY Copyright patents and trademarks beware as If you breach this it will be taken seriously. We all see the messages at the beginning of DVDs saying you wouldn't steal a car etc. common copyright breaches are things like copy DVDs and CDs. Patents are for people who think they have an original new or unique invention so if I invented a hat that can increase brain power and nothing like that was on the market and hadn't been seen before I would patent this idea so that others couldn't copy and use my idea. Trademarks are company branding or logos such as the Golden Arches for McDonald's restaurant. A famous copyright battle which was settled out of court was between simon fuller who sued simon Cowell over similarities between fullers "pop idol" show and cowbells X factor show.
- STEFANY MONEY LAUNDERING LAW You should be wary and report transactions suspicious to you. In my personal workplace we have to not accept and report cash transactions of £5000 or over. Large cash transactions with no forms of Id are usually suspicious enough to refuse or investigate. DATA PROTECTION Data protection when dealing with customer details it is important you register for and adhere to data protection. So if you are offering a card paying service online with names, addresses and credit card numbers we would need to store that information safely and only for the required time when it would have to be properly disposed.
- STEFANY Sale of goods act / distance selling The terms implied by the sale of goods act 1979 1. Lawful authority to transfer ownership 2. Goods will match description 3. Satisfactory quality 4. Suitable for any purpose specified by the buyer. 5. Match any sample shown to the buyer prior to the contract. Most distance selling is done on a subject to view basis. If I order a dress online and it doesn't fit I can send it back for a refund of money. As this is only a brief non exhaustive guide it is always advisable to seek professional legal and accountant advice if in any doubt.
- SARA Books The Start up kit by Emma Jones Stockdale Sue - secrets of successful women entrepreneurs ( How ten leading business women turned a good idea into a fortune) Lean Marketing Press Great Britain 2005 Law for business students seventh edition by alix Adams From acorns...... How to build your brilliant business from scratch by Caspian woods Starting a business by Richard Hargreaves Websites http://startups.co.uk/start-up-business-plan-essentials-deciding-on-your-business-objectives-and-personal-goals/ www.dailymail.co.uk www.marketingweek.co.uk/trends/the-second-hand-market-what-consumers-really-want-to-buy/4008315.article http://www.statisticbrain.com/startup-failure-by-industry/ http://marketing.about.com/cs/advertising/a/marketvsad.htm http://startups.co.uk/why-are-social-networks-so-important-for-your-start-up/ http://www.forbes.com/sites/jaysondemers/2014/08/11/the-top-10-benefits-of-social-media-marketing/ www.hmrc.co.uk www.gov.co.uk