Tuesday 23 July 2019

Devil is in the detail when starting your own business

(Stock photo)
(Stock photo)

Feargal Quinn

Q. I have a great new business idea and I am at a pretty advanced stage of getting ready to launch. I am however, totally confused by the business aspects like should I be a sole trader or a company and how to handle my VAT etc. Can you advise?

A. Far too many people start businesses without getting into the detail. Everyone tends to get excited about their idea and how customers might interact with it. For some the business aspects are not thought through and leave them with a catalogue of problems.

Your Local Enterprise Office will have a raft of advice services, and mentoring. I have heard that the LEO Start Your Own Business programme is excellent and will answer all of your questions above, plus many more. You would also benefit from mentoring. This would allow you to probe your project in detail with an expert who would interrogate the concept and ask some all-important questions of you.

You should be taking certain actions yourself including getting a good accountant, and talking to other people who have set up their own businesses. You obviously recognise the importance of seeking help and that is a great attribute. Never be afraid to seek help.

Q. I applied for an export grant to help me cover the cost of new pack design. This was refused by the agency I went to and they said my export business case in the application was too weak. I am annoyed and don't have time to be filling out forms, is there some other avenue open to me?

A. While I can understand your frustration, and your perception that the agency you applied through has disallowed you unfairly, I am critical of your attitude. Government funding is set aside to support businesses and other initiatives. It is the job of the agencies that this is given to, to give it out. It is not their role or wish to hold onto the money and deny private enterprise opportunities.

Clearly you did a poor job at completing the form and you seem to resent the fact that you have to spend time doing this. No agency, or any other entity is going to give you money based on insufficient information. While form filling can be a bit of a nuisance, it does provide a means to assess your business. If you are poor at articulating plans, or not willing to put the time in, it is unlikely the person reading it will get a full understanding - increasing the chances of your application being rejected.

You need to change your mind-set if you expect others to give you money.

Q. I run a fashion retail outlet. During the recession I cut my margins significantly to keep people coming through the door. That worked, however the business has not been profitable and I am still struggling. Can you give me any advice?

A. I am afraid your question is all too common. Your decision to tighten margins but keep attracting customers was exactly the right thing to do and that has been evidenced by the retention of your customer base. You would be in a far worse place had you lost all of your customers.

Things have moved on and while not all parts of the country show the same level of consumer confidence, I now get positive indicators from most parts. While you might be nervous about what I am about to recommend, you need to do a full review of your model and identify where there might be opportunities to improve margins on certain products. An opportunity exists to recover some lost margin.

In parallel, conduct a survey of all of your competitors. It might also be an opportunity to bring in new fashion labels which allow you to have a different price positioning for these based on the exclusivity, design etc.

I know dozens of businesses who have had to take the same action and several months after report that it was a smooth transition to their new price positioning, with little or no resistance.

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