January is usually our busiest month as people make the decision to achieve new goals including starting their own business, and I’m always struck by the myths they tell us they believe about starting a business. So, I thought I’d debunk a few of them.
Myth 1 – You need to have a lot of money to start a business! Yes, there are some businesses where you will need to have a significant amount of personal investment, but most of the entrepreneurs we see won’t need it. If you are intending to borrow money, a lender will usually want to see that you are contributing between 20-30% of the start up yourself. So if it’s going to cost 10,000 to start your business you’ll need to invest £2-3,000 yourself and in some cases this can include assets that you already have e.g. lets say you want to open a beauty salon in Dungannon and you already own a beauty bed and a tanning machine, the value of these can sometimes be seen as your own investment. We have people from all backgrounds coming in to start a business including people who are receiving benefits and those who want to return to work. In many cases they make it by starting their business small or on a part time basis allowing them to build up their customer base and their offering without a hefty lump sum in the beginning. What you need isn’t a lot of money, it’s a lot of passion and belief in your product or service.
Myth 2 – Build it and they will come! That might work for Kevin Costner in Field of dreams but I’m not quite sure it’s the best strategy for Joe Bloggs opening his landscaping business in Cookstown. We have a lot of clients who visit us for the first time with an idea that they love, yet, when we start to ask questions it’s clear that they have no evidence that anyone would be willing to pay for what they propose to offer. Some will tell us that no one else is offering the same service, yet a Google search reveals that in fact there are plenty. And then we have other people who have a great idea and they know that people will pay for it, but they are in a competitive industry and they don’t know how to target their customers and how to stand out from the crowd. For a business idea to work you need to have a product/ service you believe in, something you know that people will pay for and you need to be able to communicate it effectively so that customers will come.
Myth 3 – My business is small, so I don’t have to register! No matter how small your business is you have to register as self employed with HMRC. This can be daunting for a lot of people but the thing to remember is that you only pay tax on your business profit – any money you make minus any expenses. If your small business is your only source of income you may still have your tax-free allowance too, so the tax you pay could be relatively low depending on your profit levels. It is quite easy to register online and HMRC will let you know well in advance of when your tax return is due. The start up team in Dungannon Enterprise Centre will be happy to point you in the right direction and you may also be eligible for one of our LaunchPad workshops that cover information on HMRC. In the mean-time though check out this article - www.nibusinessinfo.co.uk/content/setting-self-employed-and-tax.
If you’re thinking about starting a business my advice is not to believe everything you hear on the street and get some professional advice and answers to your questions. Call 028 87 723 489 to speak to a Business Advisor in Dungannon Enterprise Centre.