Generation Z - the new breed of entrepreneur
This week, Companies House discuss their latest campaign #GetBizzy, designed to encourage Generation Z to enter into the world of business ownership. If you're a Generation Z-er, read on for some considerations to take into account before leaping into your new career...
Generation Z, or people born between 1995 and 2010, are set to become the most entrepreneurial generation we've ever seen. This is reflected in the number of young directors aged 16-24 on the Companies House register, which has grown by 35% over the last 5 years from 87,477 in 2014 to 117,810 as of July this year.
Many young people will have dreams of becoming the next big YouTube personality, E-Sports superstar or reality TV sensation. With the success of PewDiePie, Jaden Ashman (runner up in the Fortnite world championship) and the popularity of Love Island, itâ€™s hardly surprising. But the chances of succeeding on these career paths are very low.
For most itâ€™s a choice between working for someone or working for yourself. Being employed has benefits such as greater job security, a regular income and fixed hours. So, you can switch off at the end of the day, go home and relax. Itâ€™s also likely that youâ€™ll be working with others, which is a great opportunity to make new friends and network.
While this all sounds great, being in a 9 to 5 job can restrict your creativity and may limit your ability to decide what you actually do in the workplace. Your work will need to meet the expectations of your employer and your pay will be dictated by the pay structure of the company. Then thereâ€™s the boss. Great if you get on with them, but what if you donâ€™t?
For these reasons, many Gen Zs are choosing to forge their own career and start their own business. Being your own boss can be incredibly exciting and rewarding, especially if youâ€™re turning your passion into a business. But it can also be risky and challenging. Before you start your business venture â€“ or embark on your growth journey - there are a few things worth considering to make sure the future success of your business empire.
Do you have what it takes?
Ask yourself. Do I really want to operate independently and be the person making all the decisions and shouldering the responsibility? Are you willing to put in the hours and make the sacrifices necessary to start a business? Do you have the self-confidence and self-discipline to persevere and build your business into a success?
If you answered yes, then it looks like you've got the right attitude. Weâ€™ve all heard of famous successful entrepreneurs like Sir Alan Sugar, JK Rowling and Sir Richard Branson. But for every famous business person there will be hundreds of other plumbers, shopkeepers, hairdressers and other small companies in your locality who also run successful, profitable small businesses.
Research and planning
As the old saying goes, â€śfail to prepare, prepare to failâ€ť. Many businesses fail because of the lack of research and planning. At the British Library Business and IP Centre, there is plenty of support and advice needed to make your business a success. With workshops, events, databases, publications and industry guides, all the essential information is on hand to help you start and grow your business.
For any new potential venture, a business plan is a critical document covering the essentials of setting and achieving your business objectives. Although it may seem a tough exercise to undertake, it's worth it in the long run. A business plan is a written document that sets out your company goals, objectives and the strategies youâ€™ll use to achieve growth. These are crucial to the success of any business; not only do they provide a clear path for you to follow, but they also help you keep track of your goals and allow you to make changes if necessary.
If youâ€™re a business hoping to secure investment from funding bodies or other entrepreneurs, youâ€™ll need to have a business plan to convince them that you are worth their time and money. Itâ€™s a competitive market â€“ thousands of businesses vie for the attention of investors across the UK every day, so if you want them to choose you, you need to give them a good enough reason.
Decide what type of business is best for you
What type of business structure is best for your start up? There are different types to choose from. The most common types are sole trader, a limited company or partnership. Each have their own pros and cons. Starting out as a sole trader is a popular choice because itâ€™s quick and easy to start and set up, with minimal costs. Many businesses change their structure as they expand and grow. Being or becoming a limited company can bring increased tax-efficiency, as well as limited liability.
Another key benefit of starting or becoming a limited company is the improving image in the eyes of your customers. Incorporation may give you more of a professional edge by showing everyone that youâ€™re a legitimate setup.
Itâ€™s important that you familiarise yourself with these so that you know what type of business structure will be best for you and what your responsibilities will be.
For your business to survive, you need money to cover all your start-up costs, the costs of running the business and also have enough for you to live on. It can be months before a new business is profitable and generating a cash surplus. You may need alternative sources of income during this period, if only to cover your outgoings.
Almost all new start-up businesses require some form of funding. Many entrepreneurs turn to their bank, but there are other numerous options to boost initial working capital requirements. You could use savings, get a loan from family or friends or there may be government-backed schemes or loans available in your area.
Choose an appropriate business name and branding
No matter what business structure you choose you will need a name. First impressions count, so make sure you put plenty of thought into choosing a name and brand for your business. Try to be unique and pick something suitable that will help differentiate your business from your competitors.
Itâ€™s obvious that you donâ€™t want to use something that is already being used by someone else. Checking the trade mark database on the Intellectual Property Office website and using the company name checker on the Companies House website is a good starting point. But there is also a chance that someone is using a name that they havenâ€™t registered anywhere. So professional advice is worthwhile before you invest money in your new shopfront, business cards and stationery.
When it comes to branding, remember that this is where your company personality shines through â€“ so make it memorable! Think about the images, colours and fonts that will help attract customers and make you stand out from the crowd. Use your creativity while aiming to capture the essence of your product and yourself.
Dealing with legalities
The slightly less exciting but equally important part of starting or growing a business is dealing with the legal requirements. Itâ€™s a good idea to research each part of your business and speak to experts about the legal issues you might face. There are plenty to consider, but here are a few of the obvious ones:
Certain aspects of your business may need a licence - for instance if you are planning to sell food or alcohol. Or if you are a trades-person you may need to register with a trades-group, like the Gas Safe Register.
Employersâ€™ Liability insurance is compulsory if you employ staff. If you donâ€™t have this, you could be fined ÂŁ2,500 every day youâ€™re not insured. Just think of what you could spend that money on instead!
Other types of insurance depend on your type of business. Itâ€™s worth considering public liability insurance and cyber liability insurance (especially in an ever-growing digital world).
When youâ€™re running your own business, itâ€™s almost a certainty that youâ€™ll have to pay tax at some point. Depending on your structure, earnings and profits you will need to consider what is applicable to your business. Income tax, national insurance, corporation tax, VAT and business rates may be payable. If youâ€™re in any doubt about what taxes your business might be subject to and when you might have to pay them, speak to your accountant or HMRC for help.
A walk in the park
Itâ€™s not easy starting a business and becoming a successful entrepreneur. It takes drive, determination, sleepless nights and a bit of luck to realise an idea. Not only do you have to discover that unique product or service, but you also need the courage and strength to take it to market.
If you need any advice about starting out, growing or just want to run your idea past someone, the British Library Business & IP Centre National Network provides entrepreneurs with free access to databases, market research, journals, directories and reports worth thousands of pounds.
There is a programme of free and low-cost events and workshops on a range of topics, including business planning, marketing and intellectual property. The friendly staff and business experts are there to help you start and grow your business.
At Companies House we are encouraging young entrepreneurs to start and grow a business with our #GetBizzy campaign. Take a look at our website and make the most of our tools and resources. You can also help inspire others by sharing information about our campaign and using the hashtag on social media.
Follow us on Twitter, Facebook and LinkedIn on @CompaniesHouse. Visit our website www.gov.uk/companieshouse for more information.