Background Information:

At the start of 2002 it is estimated that there were 3.7 million businesses in the UK, 99 per cent of which were small or medium-sized enterprises, employing fewer than 50 people. (Only about 1.1 million businesses have employees.) These businesses provided about 44 per cent of employment outside of the government sector and were responsible for 50 per cent of the UK’s turnover – £1 trillion.

Generally, the size of businesses is defined in terms of the number of people employed. A micro business employs 0 to 9 employees, a small business 10 to 49 and a medium 50 to 249.

New businesses, especially small firms, are the greatest source of new jobs.

Although accurate figures are hard to get, it is estimated that there were 6,200–18,000 new businesses in 2000. Survival rates in 1997 were 65 per cent.

Currently the most popular sectors for new businesses are:

• hotels and restaurants
• transport
• education.

About 13 per cent of small to medium-sized businesses are operated by women.

A Business Plan
A good business plan is central to the success of a business. It is the strategic statement of the business – what the business aims to achieve and how it plans to do this. It defines the structure of the business, its products and services and it lays out the potential for growth. It establishes the financial parameters of the venture. It is also a document of inspiration and motivation for staff and other stakeholders. Business plans set realistic targets over a time framework and should have built-in assessment functions.

There are many consultancy companies and online business facilitators that can help draw up a business plan. While some consultants will charge a fee, there are many organisations whose aim is to help start-up businesses who will give free advice.

Suitability
Running your own business requires, amongst other things:

• determination in the face of numerous obstacles
• energy and hard work regardless of ‘office hours’
• vision over the short, medium and long terms
• creativity in solving problems
• good organisation skills
• good financial management / accounting skills
• an understanding of the world of business – or the knowledge of where to find out information.

Some things to be aware of!
Starting a new business can be very exciting but also very challenging. Many experts say that the early years are extremely tough and predict that, amongst other things, you will:

• work every possible hour to get things going
• not have a holiday for a long time
• put your family and relationships under strain
• be completely pre-occupied with the business.

There will be numerous big decisions to be made, and it is worth getting some expert advice about many aspects of business management, from initial finance to IT needs, from tax information to staffing strategies. Most importantly, be very careful about investing personal money or assets into a business and always take professional advice about managing finances.