How I started my own business

Starting your own business can be incredibly exciting and rewarding but it's also full of challenges, so make sure you do your homework first.

Starting out

So, you've got a great idea and you're itching to turn it into a thriving business? First, you need to establish whether your idea has a chance of working. Do as much research as possible; check out the competition and run your idea by friends and family, or better still a professional organisation. Gavin Edley, 22, found Business Link particularly useful. "It went into every aspect of setting up your own business that you could possibly want to know. I basically set up my entire copywriting business, Midas Copy, by using the site."

Write a plan

Gavin also found the site helpful when producing a business plan, a crucial step towards setting up your own business. "The first thing I did was jot everything down about what I wanted to achieve," he says, "and again, I looked at Business Link to see the sort of things that should be included. I'd advise others not to rush into anything without having a solid plan of where you want to go with the business."

Having a business plan – be it written or visual – is vital, according to Heather Wilkinson, founder and managing director of Striding Out, a provider of business coaching to young entrepreneurs. "You need a good focus on what income you need to generate month by month and how you're going to achieve that," she says. "And you'll certainly need one to get financing."

Finding funding

Raising the cash to start your own business can seem daunting, but there are plenty of options available for business funding. However, before you approach anyone work out how much you actually need – not all business require a small fortune to get off the ground. "Lots of people think you have to have a website that costs £25,000, swish offices and expensive branding, but it's a myth," says Richard Morris, co-founder of the Bright Ideas Trust, a registered charity that helps fledgling businesses with financing. "All you really need is a telephone and to be passionate about what you're doing."

Fraser Doherty, 20, started selling jam that he produced in his grandmother's kitchen when he was 14. At first he sold locally, but the business went to an altogether higher level after he managed to get a £5000 loan from the Prince's Trust. His company, SuperJam, now supplies major supermarkets. "The great thing about the Prince's Trust is that they're pretty flexible about paying a loan back,' he says.

Seek advice

While anyone from your granny to random strangers in a bus queue will offer well-meaning advice, for a professional opinion talk to other entrepreneurs. Finding yourself a mentor – somebody with the experience and knowledge to advise you – can be hugely beneficial to your chances of success.

Lily Lapenna, 26, who set up www.MyBnk.org, a charitable banking scheme run by young people for young people, approached somebody who had set up a similar organisation from scratch. "Being asked to be a mentor is an honour, so most individuals will be thrilled to help you if they believe in you and your idea."

Getting it right

A mentor doesn't guarantee success, though. According to research, almost 50% of new businesses are destined to go bust within the first three years. However, the actual number of business failing is going down for the first time since August 2007, so don't let the gloomy statistics put you off. And don't think that starting a business during the current economic climate is commercial suicide. "I think it's probably the best time," says business advisor Richard Morris. "Admittedly, there are a lot of other people going out of business, but it means people will be keen to do business with you if you come up with something attractive."

By Dean Gurden

Photograph by Lifetracks volunteer Zainabb Hull