What are some of the biggest challenges you have faced when setting up your business?

[Mike-Smith]

Hi All,

I am keen to build up an understanding of the main difficulties and pitfalls that you have faced when setting up your own business, as well as the positives of owning a business.

It would be great to create a thread of positives, negatives, and tools to improve situations in business. With that in mind I have added a few questions below as prompts.

• What type of business did you set up (sole proprietorship, Partnership, Corporation or LLC) and how easy was it to complete the necessary companies house (and other paperwork)?
• Did you get adequate support (financial and other) from your chosen bank? If not where did they fall short and what did you do to fix the issue?
• How easy is/was it to source new clients? What tools did you use to build up your business and source the right clients?
• What has been by far your best marketing and advertising investment to date?
• What other services (if any) have you found essential to the success of your business (accountants, tax specialists, solicitors, HR consultants or systems that do a similar role etc)?
• How have you managed cashflow? What do you do in the hard months?
• What advice would you give to an entrepreneur looking to start up their own business?

Appreciate this is a broad post, but you all seem like the right people to get some general, and specific advice from when looking to set up your own businesses! I am the first to say i am nervous about setting something up myself so any feedback and advice is appreciated.

Have a wonderful day one and all!

 

[japancool]

Just getting a bank account for my limited company.

I set my business up in the middle of covid, and had to wait weeks just for an appointment - and when the appointment came round, it was on a day that the branch was closed and with an employee who no longer worked there! The bank I used for my personal banking declined me, because they weren't accepting new company accounts due to BBL applications.

 

[Mark T Jones]

Hi All,

I am keen to build up an understanding of the main difficulties and pitfalls that you have faced when setting up your own business, as well as the positives of owning a business.

It would be great to create a thread of positives, negatives, and tools to improve situations in business. With that in mind I have added a few questions below as prompts.

• What type of business did you set up (sole proprietorship, Partnership, Corporation or LLC) and how easy was it to complete the necessary companies house (and other paperwork)?
• Did you get adequate support (financial and other) from your chosen bank? If not where did they fall short and what did you do to fix the issue?
• How easy is/was it to source new clients? What tools did you use to build up your business and source the right clients?
• What has been by far your best marketing and advertising investment to date?
• What other services (if any) have you found essential to the success of your business (accountants, tax specialists, solicitors, HR consultants or systems that do a similar role etc)?
• How have you managed cashflow? What do you do in the hard months?
• What advice would you give to an entrepreneur looking to start up their own business?

Appreciate this is a broad post, but you all seem like the right people to get some general, and specific advice from when looking to set up your own businesses! I am the first to say i am nervous about setting something up myself so any feedback and advice is appreciated.

Have a wonderful day one and all!

The last business I set up was in 2006 - just 2 years before the banking crash.

In banking terms, things were very different then - in pretty much every other respect the fundamentals haven't changed (I've been around the block a few times).

I rang someone I knew at Lloyds, they opened an account and threw in £1,000 overdraft without being asked. From stories on here,, it's a bit less straight forward now.

I had a clear & defined target market and a route to reach them (It didn't quite work out, for reasons I won't go into) - which is the first thing I suggest any start up does.

I'd suggest the best marketing investment any business can make is in researching and defining their customer.

Cashflow is easy for me. If you are offering any kind of credit terms, it is essential to have a solid credit-control policy. One that starts before you offer credit, not when they are late paying.

 

[japancool]

I rang someone I knew at Lloyds, they opened an account and threw in £1,000 overdraft without being asked. From stories on here,, it's a bit less straight forward now.

When I started a business back in 2013, HSBC were happy to give a £3000 overdraft, almost no questions asked. How times have changed.

 

[fisicx]

@Mike-Smith, would be interesting to hear your answers to the questions you posed.

I started as a sole trader, became limited and now just trundle along. Almost zero marketing, I rely of traffic from Wordpress and Google. It’s about a simple as it gets.

My advice to startups: get used to rejection and failure. Not everyday but there will be many times when things just don’t work or don’t succeed. If your business is robust you can shrug it off and carry on.

 

[PatrickStephen]

Hi Mike,

For us, and many others, if you are trying to build a business on the side of your existing employment, it will be hard work and long hours. There may also be an uncomfortable feeling from your current employment as the "threat" of losing you to your own business may be an issue.

From our side, banking personally with the bank you have your company account with has saved us valuable time. If you are looking to have "international" shareholders, there will be undue amounts of Bureaucracy, especially if you bank with "N".

 

[Frank the Insurance guy]

What type of business did you set up (sole proprietorship, Partnership, Corporation or LLC) and how easy was it to complete the necessary companies house (and other paperwork)?

Set up Limited company and very easy to set up on Companies House online

Did you get adequate support (financial and other) from your chosen bank? If not where did they fall short and what did you do to fix the issue?

Applied for Business Bank Account with Starling. A few niggling issues to set up, due to their due diligence - as an Insurance Broker they wanted proof that we are FCA registered/authorised. No problems since.

How easy is/was it to source new clients? What tools did you use to build up your business and source the right clients?

1st year was hard graft as was under restriction to not contact old client's for 12 months, so had to go out and get Pure new client's - this was mainly by networking, referrals and connections, with a little dabble in Google Ads.

Initially paid "specialist" to set up and deal with google ads, but complete waste of time! Got tied into 12 month contract, but didn't use it after 6 months as just burned through ad spend!

What has been by far your best marketing and advertising investment to date?

Networking is the main one. Got a trusted group of advisors around me that I can work with cross-referring etc. Also one of the cheapest way's to market yourself!

What other services (if any) have you found essential to the success of your business (accountants, tax specialists, solicitors, HR consultants or systems that do a similar role etc)?

Accountants and Solicitors - both essential to make sure the business is on the right footing. Too many stories of things going wrong when trying to cut corners and not seeking specialist advice!

How have you managed cashflow? What do you do in the hard months?

Always on top of outstanding debt. For new client's they must pay up front (or bank details if paying monthly). After 1st year, happy to give 14 days to pay invoice. If not paid, chased up for immediate payment!

What advice would you give to an entrepreneur looking to start up their own business?

Make sure you have done your research.
Build a realistic budget/forecast
Have a full business plan, follow it and review it regularly
Assume the worse case scenario and work from there!
Have a Plan B!

 

[danielML]

• What type of business did you set up (sole proprietorship, Partnership, Corporation or LLC) and how easy was it to complete the necessary companies house (and other paperwork)? VERY FOOLISHLY, I STARTED A LTD COMPANY IN ANOTHER COUNTRY. LOCALS SAID I WAS 'VERY BRAVE', BUT I THOUGHT I KNEW WHAT I WAS DOING...
• Did you get adequate support (financial and other) from your chosen bank? If not where did they fall short and what did you do to fix the issue? MY CHOSEN BUSINESS MEANT CUSTOMERS PAID IN ADVANCE. THREE PARTNERS PUT IN CASH, ENOUGH TO COVER THE NEEDS OF THE FIRST YEAR, WORST CASE SCENARIO, ETC. IT WASN'T REALLY NEEDED, BUT WAS A NICE LEVER TO HAVE WHEN ONE OF US BAILED IN THE FIRST FEW WEEKS, LEAVING THE OTHERS UP TO OUR NECKS.
• How easy is/was it to source new clients? What tools did you use to build up your business and source the right clients? I WAS ADVISED THAT FINDING CLIENTS WOULD BE THE HARDEST THING, IGNORED THAT EXCELLENT ADVICE, SO SPENT YEARS WASTING VAST AMOUNTS OF CASH ON MARKETING...
• What has been by far your best marketing and advertising investment to date? LEARNING TO DO THINGS MYSELF I.E. WEBSITES, WRITING CONTENT FOR MARKETING, EVERYTHING BASICALLY. FOR A MICRO BUSINESS, EVERY TIME YOU PAY AN 'EXPERT', YOU RISK LOSING YOUR MONEY WITH NOTHING TO SHOW FOR IT.
• What other services (if any) have you found essential to the success of your business (accountants, tax specialists, solicitors, HR consultants or systems that do a similar role etc)? WE HAVE ALL OF THESE, THEY COST A FORTUNE, AND IF I DON'T TAKE A CLOSE INTEREST, MAKE MISTAKES, EVEN SERIOUS ONES. IN THE COUNTRY I OPERATE IN, THE MYTH IS TO GET AN ACCOUNTANT AND DO WHAT THEY TELL YOU. IT'S ABSOLUTELY NOT THAT SIMPLE... YOU REALLY HAVE TO PUT THE WORK IN UNDERSTANDING WHAT THEY'RE DOING.
• How have you managed cashflow? What do you do in the hard months? HARD YEARS, HARD DECADES... EVERYONE ELSE GETS PAID EXCEPT ME AND THE WIFE. WE'VE LEARNT TO LIVE ON VERY LITTLE. MY THREE KIDS DIDN'T KNOW THERE WERE SHOPS SELLING SHOES - THEY THOUGHT SHOES WERE LEFT ON THE DOORSTEP IN PLASTIC BAGS AND YOU COULD JUST SORT THROUGH AND FIND A PAIR YOU LIKED... (TRUE!)
• What advice would you give to an entrepreneur looking to start up their own business? IN THE COUNTRY I LIVE IN, DON'T. SEE BELOW, FOR A HAPPIER STORY, ONLINE BUSINESS BASED IN THE UK.

Sorry about the ALL CAPS, but it seemed the easiest way to comment directly on your points.
So, after a decade or more of running a business abroad, I knew enough about marketing and my industry to set up businesses online, based in the UK. Things were much, much easier, even during the pandemic, even with the utterly useless HMRC.
This time, I started small, spent none of my own money, built a customer base one person at a time, and only used freelancers (my foreign business has employees on 'lifetime' contacts...)
Experience helps a lot, really, so I guess it's a question of making your mistakes fast, learning your lessons, and moving on, hopefully to better things and without having suffered serious consequences.
It's a vast amount of work, though... Good luck!

 

[Drax35]

When I started a business back in 2013, HSBC were happy to give a £3000 overdraft, almost no questions asked. How times have changed.

Times have changed indeed! Pre-financial crisis, I opened an account with one of the major banks as someone with zero business experience. After a few face-to-face appointments, I ended up with a £3k overdraft and a £70k loan without providing any security!

 

[Ozzy]

What type of business did you set up (sole proprietorship, Partnership, Corporation or LLC) and how easy was it to complete the necessary companies house (and other paperwork)?

My first business was a Ltd Co, back when you had to register via paper and it taking about a week to sort and cost hundreds. My accountant did it for me, who was my ex-boss's accountant so I just went straight them as I didn't know any different.

My second business I was a sole trader, again registered by my accountant again as again I knew no better. A few others since then have all been Ltd Co's as it allowed for simplicity in selling and keeping everything segmented and tidy.

Did you get adequate support (financial and other) from your chosen bank? If not where did they fall short and what did you do to fix the issue?

My bank at the time almost sank me, as I was trading online in the late 1990's and into the early 00's, online trading was categorised same as "cardholder not present" and extremely high risk. So they held every single payment made by a customer as security. No cash came into my bank account to trade, so I was continuous running the business financing it by a few personal credit cards and a personal bank loan.
When I had only 1 week of debt finance left, I went to another bank explaining I was on the verge of going under and they gave me a loan to cover all the security and debt - and I was saved.

How easy is/was it to source new clients? What tools did you use to build up your business and source the right clients?

For me, quite easy - as back then I was first to market and online marketing was a lot easier. I was very good at SEO and have my website number 1 on AltaVista, Excite and Yahoo (Google wasn't around at the time).

What has been by far your best marketing and advertising investment to date?

Buying out the other founder of UKBF in 2004, and buying UKBF back from the media company I sold it to in 2007. Although no one can see why yet ?

What other services (if any) have you found essential to the success of your business (accountants, tax specialists, solicitors, HR consultants or systems that do a similar role etc)?

None of the above, my board of directors and investors have actually made the greatest impact to our business. It cost me some equity in the business rather than buying in the expertise, but I'm very happy with that.

• How have you managed cashflow? What do you do in the hard months?

Cashflow is monitored very closely by my accounts staff with monthly MI provided.
When times have been tight the board of directors are the first to have their salaries cut which includes mine, after that we cut supplier expenditure based on service prioritisation, and then after that we cut staff. We have a procedure in place, and each scenario is modelled.

• What advice would you give to an entrepreneur looking to start up their own business?

Just get on and do it.
If you are still talking about waiting for that idea then don't fool yourself, you aren't going to. You don't need to know everything, you just need to have an idea and a plan and then a load of grit and persistence. Get on and do it.