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What young people should consider when starting a business

Owning your own business can be extremely challenging but also immensely rewarding. This is why so many young people take the entrepreneurial path and decide to set up their own company; running a successful business can lead to significant profit, enabling you to meet your long term financial goals. If you have high ambitions about your future assets, being a business owner can be the vehicle that helps you reach the destination.

However, setting up a business is not just about making money; many people decide to go it alone for the satisfaction and pride that comes from being independent and making a success of something that is truly theirs. Others, meanwhile, spot a gap in the market and want to provide a service that is not readily available.

Whatever your reason for setting up a business, it is important that as a young person taking on such a challenge you are aware of everything you need to know.

First steps

Once you have an idea for a business, it is important to carry out the necessary research and testing to give you a better idea of whether there is demand for the service or product you are offering - and whether there is a good chance of you being successful. Be sure to analyse the market thoroughly; while online research is a must, you should also get out there and do some field research, speaking to both those in the industry and any potential customers.

Use your research to develop an effective business plan. This plan is crucial because it will form the basis of what it is you want to create and what you want to achieve. It will include important markers such as who you want to target and what your pricing points will be. It is also important at this stage to decide on your business structure - do you wish to be a sole trader? Part of a partnership? An LLP? A limited company? Each has its own benefits and drawbacks, and so choosing the one best suited to your business and your objectives is important.

You will also, obviously, be required to come up with a name and logo for your business. This is the fun/creative part, but remember it needs to be unique and should be relevant to what the business is and what it provides.

The must-dos

When setting up your business, there are certain things that you will have to do by law. This, however, will depend on the type of business, whether you will be employing other people and where you will be setting up shop. For example, you will need to register your business in the UK, while you may also require insurance or the relevant licenses or permits. If you are to become an employer, you will also have to think about running payroll, providing workplace pensions to staff eligible for them and paying their National Insurance.

You will also have certain responsibilities if you work from home - such as any permissions required from your landlord or mortgage provider, or the local planning office if you're going to make significant alterations to your home - while you may have to pay business rates if you are renting a property from which to run your business.

Finances and seeking expert help

It is important to be careful with your money from the outset. Whether taking out a loan, using savings or receiving another form of financial help, seeking the right expert help will ensure your finances stay on track and in budget, helping you avoid the financial pitfalls that many startups encounter.

On a personal level, it is also important to ensure that the success of your business, from a financial perspective, matches your own objectives. By speaking to the professionals, such as an experienced wealth management company, you can make sure that your personal financial plan is tied to your business financial plan and that the two go hand in hand.

The success of your business and your own wealth accumulation are bound together, and seeking the right expert help can ensure you're in a position to make the best of your personal finances, regardless of how well the business is doing.

For many, owning and running a successful business is the first step on the way to significant personal wealth accumulation; seeking the right guidance can help to smooth that path.  

Ask others for advice

Which businesses (that you respect) are offering a similar service or product to the one you are planning?

Make a list of the top 10 and contact the owners explaining that you are just starting out and would really appreciate their advice and support. Ask if they could spare 30 minutes to share some of their lessons and ask what they would do if they were you. You will be surprised by how many will be willing to share their time and expertise, and the advice you get could be invaluable.