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Making a Small Business Work in the UK

Tristan Anwyn

November 25, 2013

There's a saying that when times are tough, it's a good time to start a business. Sound counter intuitive?

In fact, economic hurdles often make for market opportunities and the chance to take advantage of some bargains.

For businesses in the UK, things are really starting to look up, with a recent study showing that small businesses are expecting growth of 134% in the next five years. That's an impressive hike from the 88% growth they were expecting just a year ago.

With the economy slowly recovering, and optimism on the rise, now is a good time to start a small business in the UK.

So what are some of the keys to making a go of your small business? And how can you avoid common pitfalls?

Plan and Plan Some More 

One of the most common pitfalls for new businesses is a simple lack of planning.

If you're thinking of starting a small business, you've picked a good time to do it. New startups are flexible, which means you can search out opportunities and follow them through.

Not to mention that new startups can often run with smaller overheads, putting you in a good position to undercut your competition.

But in order to take advantage of these opportunities, you need to craft a well thought out plan, covering:

• Your niche - what need or gap in the market can you fill? Where are you customers and do they want what you are offering? Doing market research and understanding your niche will help you build a business that fits into the current economy;
• Your USP - Why should customers come to you instead of your competitors? Being able to offer a good price is a start, but your USP needs to be more than that. Know what sets your business apart - it will be invaluable when you start marketing;
• Your goals - Set realistic goals and time scales. That way, you can check back in at regular intervals and see if you're on track and if not, what you need to do;
• Your method - Don't just jump in and hope for the best. Plan how you are going to run your business, find customers, and keep tabs on your progress.</li>

Embrace Technology 

 A recent survey by web hosting specialists 34SP found that over three quarters of online businesses are confident about the future, as compared to just over a quarter of high street stores. That's not to say you can't open a physical shop, but it would be wise to consider whether providing some kind of online service is a viable move for you.

Technology goes beyond online sales of course. Keeping up with technology can be a pitfall for new startups - how do you know when to invest and when to wait for the next biggest thing so you can stay ahead of your competitors?

But if you resist the urge to buy every latest thing and focus on making the most of what you have, you can use your existing phone and computer to get your planning, market research and early marketing done on a shoestring budget.

A good social media presence is a must-have for any business and will raise your start-ups awareness for the cost of time spent learning how to use it to your best advantage.

Run a Tight Ship 

Cash flow is a real challenge for startups in the UK at the current time.

Banks aren't lending as much, and no one wants to risk expensive debt early in their business. Cash flow can also become a problem if early clients don't pay on time.

Luckily there are some things new businesses can do to minimize cash flow problems:

• Shop around for bargains, whether that's the cheapest internet provider or the best materials supplier;
• Discern what you really need to start up from what you'd like but can do without;
• Don't rely on a handful of clients - try to broaden your reach;
• Keep all your receipts and invoices in good order;
• If you must borrow, look around for the best rates, or even consider crowd funding.

With growing optimism and a slowly recovering economy, now is a good time to start a UK business.

Things are a still a little tight, but with good planning and the willingness to embrace opportunities when they come along, that needn't be an obstacle to building a strong business.

In fact, the skills you learn running a business in tough times will help you to run an efficient and cost effective business going forward.

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