I started my current business in 2013 - and could not (and would not) have done it without a colleague who had experience of starting businesses. That having been said there are surely loads of people who've started successful businesses more instinctively.
The first consideration is that ALL new businesses are likely to fail - more than 70% fail, even more so when you have actual material products (rather than offering a service) - the reason for this is that product purchase/production, storage and distribution is a considerable overhead.
Related to the above, how much money can you afford to lose? It's important to know this so as you know when to call it quits.
If you are aware of this, and you can afford to lose money if it comes to it (and I hope it doesn't) then there are some really important considerations to protect yourself and your company.
Things to do:
Hire an accountant - this is non negotiable - they will organise things like company incorporation, VAT registration, tax calculations etc.
Expect to pay an accountant about £350 per quarter.
Invest in accountancy software so as you track all of your in-comings and out-goings. We use Freeagent. This is what your accountant will use when calculating your tax liabilities.
Expect to pay £20 per month on accountancy software.
Get insurance - make sure you have commercial insurance (in case any future customers get hurt, or sue you, etc.) home insurance will not cover commercial space/materials/liabilities, so make sure to check with your current contents/buildings cover provider.
Expect to pay £25 per month for £1m liability cover.
Write a business plan - this will help you confirm the viability of the plan - a business plan should include:
Basics:
- Product: what will you sell?
- Place: where will you sell your products (markets/online/etc.) if selling
online, how will you distribute your products?
- Promotion: how will your audience know where to go to buy your products?
- Price: how much will you charge per product?
SWOT analysis (strengths, weaknesses, opportunities and threats to your
business).
Audience targeting:
- Who will buy your products
- Why would they choose your products/outlet instead of your competitors?
- Who are your competitors (horizontal and vertical)?
- What else are your audience buying?
- When will your audience buy your products, will trade be seasonal, personal,
gift etc. driven?
Financial planning:
- What are your in costs (insurance, products, marketing, materials, hosting, websites etc.)
- How much do you expect to sell?
- What will you do if you don't sell as much as you were expecting?
- How long before you start making profit?
- If you're working, when can you feasibility leave your current employment?
- How much do you need to make per month once you start making profit (taking into account Corporation Tax and VAT)
- What are your terms* - how do you protect yourself?
- Do you have experience in writing contracts? If not, how can you get that information?
It's high risk, it's scary, it took us six months to make money, and three years later we're finally stable and earning a decent salary (dividends)... but it can be done, if you go in with your eyes open and are ready for the hard slog.