What to research when starting a business

You need to know a lot when starting a new business to help you write a solid business plan to act as a roadmap to guide you towards success. This process takes a lot of time and research, but it’s an important step to cover before you open your doors. 

This guide will explain what to research when starting a business to get you off to the best start. At the very least, you should look into:

• Your competitors
• Your target customers
• Licenses and legal documents
• Promoting your business
• Business insurance
• Registering a business name

We’ve listed six key areas you need to familiarise yourself with before you start your business.

1. Your competitors

Conducting a competitor analysis is necessary to help you understand what other businesses offer the same products or services you plan to. You need to research your competition to know what you’re up against and how you can set yourself apart from similar brands.

Studying your competition allows you to learn from others’ mistakes and take inspiration from what they do right. You also get an idea of how much people are willing to pay for that kind of product or service.

Competitor research also allows you to find a gap in the market you can fill to help you attract customers. Think about what other brands are missing in their products or services. How can you provide a better service and grab a share of their space in the industry?

You can learn more about how to research competition for a business plan here.

2. Your target customers

If you try to appeal to everyone, you’ll likely appeal to no one. You need to focus your efforts on a target market, a group of customers that are likely to need what you’re offering. 

Defining your target customers will help you develop an offering that appeals to them and tailor marketing and sales campaigns to reel them in. Conduct market research to make sure you target the right customers. You could hold focus groups, send out surveys, or ask around on social media. 

Figure out what people want to see from a brand like yours to help you develop something they want to buy. 

3. Licenses and legal documents

Starting a new business comes with some legal documentation that you need to be aware of. You need to register your new business with the government, and the process is different depending on the legal structure you choose. You can either set up as a sole trader, a limited company or a partnership. It’s important to research the difference between these legal structures to pick the best one for you. 

While sole trader businesses are simpler to set up, limited companies look more professional. Setting up as a limited company also gives you limited liability for any debt associated with running the business. On the other hand, there are more accounting and tax responsibilities involved with running a limited company.

Depending on the type of business you want to start, you might also need a special licence to trade. The rules vary in different areas to check with your local council to get accurate information for your area. You can run your business without all the necessary legal documents and licenses, so research this thoroughly before starting.

4. Promoting your business

There is no point in having an amazing business idea if no one knows about it, so you need a plan for how to get the word out about your new company. 

Most startups don’t have a big marketing budget, so do some research to find the most effective and affordable methods. Even if you have a lot of money for marketing, the most expensive method isn’t always the most effective. 

Look around to find out where your target customers are active on social media, find networking opportunities to start building a reputation, and join groups to connect with local journalists, suppliers, and business organisations. 

Start laying the groundwork early to create hype around your business and get it to the best start once you begin trading.

5. Business insurance

A lot of things can go wrong in business, so it’s good to protect yourself with insurance no matter what field you want to break into. There are plenty of insurance covers out there, but most businesses will benefit from the following insurance policies:

• Professional indemnity insurance: this will pay for any claims made against you if you make a mistake or are accused of professional negligence or breaching confidentiality.
• Public liability insurance: in case someone hurts themselves or their property suffers damage when dealing with your business. 
• Personal accident and sickness insurance: this covers your income if you can’t work for a while due to injury or illness or if you’re unable to go back to work at all.

6. Registering a business name

You need a name for your business so people can recognise you. Choosing a name can be the most fun part of starting a business, but it’s trickier than you might think. First of all, you need to make sure no one else already uses that name. You can use the Companies House name availability checker to make sure the one you want is available.

Once you have a name, you can register it online, but it does involve following some rules. You should register your company name with Companies House via either the online portal or postal application. Online applications are faster and cheaper to complete, which increases your chances of getting the name you want before someone else has a chance to snatch it.

The final step in the research process should be to find an accounting system that’s efficient and easy to manage. You need a solid system to keep track of your financial admin and run your business more efficiently.

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Find out more here.