Self-employment: Starting your own business

How do I know my business idea will work?

When you set up a business you're taking a risk as to whether your business will work. Usually, if a start-up is going to fail, it will do so in the first 12 months.

Aim to reduce the risk of your start-up failing by testing your idea. This is important particularly if you're looking at finding funding or a business loan to help set up your business, as you'll need to convince the investors that you have done your research to find out whether your idea has a reasonable chance of succeeding when it is brought to market.

If you've invented something new whether it's an idea, service or a physical product that doesn't already exist, register your idea to make sure that nobody replicates it. Visit GOV.UK - Trademarks, Copyright and Intellectual Property  to find out more.

Whether your business idea is original or not, you'll still need to research the market you're looking to enter and identify potential customers to test out your idea. This is to find out if there is real demand for your product or service.

Find out the needs of your potential customers, create a prototype of your product, then go back to these customers and get feedback about your product or service.

Larger companies test their ideas for years and spend large sums of money on research to test the market before launching their ideas. However, you don't need to spend a lot of money, employ a market research company, or go out with a questionnaire and ask hundreds of people on the street to do your research. Find out about some low cost ways to research the market at The Start Up Donut - Market Research .

If you need to secure funding either through a grant or a bank loan then your business plan must be strong enough to convince funders to invest in your idea. However, that doesn't mean that when you bring your product or service to the market you will satisfy your customer's needs profitably.

To find out more see how to write a business plan and marketing your business.

What help is available?

• The government has lots of information and links to other resources which can help you start a business. See Business in You .
• Prince's Trust - The Enterprise Fellowship  helps approximately 500 young people start their own business.
• Many universities have an incubation centre and offer help to students and graduates looking to set up a business. Find out whether your university has an enterprise centre, this may be located in the business school or the careers and employability service. For example, the National Centre for Entrepreneurship in Education's North West HE Champions Project has assistance from eight universities in the North West and provides 296 new graduate start-ups, 313 new jobs and support for 761 students and graduates to turn their ideas into reality.
• Start-Up Loans  is a government backed scheme for 16-30 year olds who have a business idea. It offers funding and mentoring for young entrepreneurs looking to set up their own business.
• Many local councils offer advice and support to those looking to set up a business.

How do I start an online business?

Setting up an online business is similar to setting up a physical business - you still need a business plan and to find funding but there are additional things to consider. It isn't just a case of buying a domain name, setting up a website and then watching orders for your product or service come in. You must think about how you will market your business.

Begin by writing a business plan. For advice and guidance see how to write a business plan. Before you spend money on a domain name and building a website find out if your idea will work. This means consider your market, check out your competition, and think about who your target market is.

Once you've done some research you can buy a domain name. There are a number of providers that sell these including Go Daddy. Prices vary with a .com name costing from £6.99 for one year to £9.42 for ten years.

Getting someone to build your website can prove expensive, costing anything from £500 to £20,000. Speak to friends and family to find out if anyone can recommend a web developer who can produce what you need for a reasonable price.

It can take a long time for a web business to grow but with patience and a well laid out marketing plan you will find that work will come in.