• The Supplier Central is now part of Business Data Group

    I’m pleased to let you know that this website has now become part of the BDG family and will be brought together with our existing UK business community under the banner of UK Business Forums. You can read the full release here

    Whilst my colleagues and I are working through the technicalities of bringing the two communities together we have suspended new registrations to this site and I’d encourage you to register on UK Business Forums

    I look forward to getting to know you and your business,

    Richard ‘Ozzy’ Osborne
    Founder of UK Business Forums

Top Questions Asked by Start-ups

Dec 6, 2009
1. How do I start trading while I still have a job?

Many successful SMEs begin while the owner is still employed in a full time job. Usually, evenings and weekends are used to run the business to avoid conflicts with employers. Make sure you and your employer do not have a previous agreement of not running a trade as a side line to your job. Check your employment contract to be sure.

Your tax code may be changed when you inform HMRC of your business earnings from self-employment. This can raise suspicions with your employer if they are not properly informed. In the current economic climate, many employers will be happy to allow you to work part time and this could solve the problem of being available for your customers during working hours or having to visit suppliers.

2. What is the easiest and fastest way to find customers?

The answer depends on the type of customer you are targeting but in reality there is no such thing as “easy” or “fast” in business. Some products sell well through promotion in specialist magazines whilst others rely on the old fashioned face to face sales call. Selling is about building up a pipeline of businesses and a database of customers which take time and effort.

An expensive but fairly reliable route to attract buyers is through a mailshot. Apart from showcasing your products or services it can drive traffic to your new website. The average response is around 2% – 3% so do your maths beforehand and make sure your message is clear.

Beware of leaving your job and taking customers with you – it may be counterproductive and in breach of your contract of employment. More tips on running a small business.

3. Which sort of products sell well?

People who ask this question usually have little or no business experience or else they would concentrate on selling what they know. A friend of mine asked a young man who was planning his business career how he was going to prosper. He replied that he would “buy cheap and sell dear”. He wasn’t wrong but neither did he succeed. The best selling products, especially in gloomy economic times are items that people need.

The best advice is to observe people, visit shops both online and on the high street and look in general trade magazines. Draw up a shortlist and narrow it down by process of elimination.

4. Should I form a limited company?

From a tax aspect there are reasons for and against forming a limited company and often it depends on your personal circumstances. A limited company “does what is says on the box” – it limits your personal liability , which in itself is usually reason enough to trade through a limited company in spite of additional compliance and accounting costs over being a sole trader. A sole trader who is sued has absolutely no protection form creditors and many people have lost their houses unnecessarily by not operating via a limited company, usually through ignorance but sometimes as a result of penny pinching on overheads.

Check out these additional resources:

Facts about Limited Company Formation
Guide to Running a Company

5. My friend wants to join my business - how do we do it?

If you are forming a partnership use the services of a solicitor to draw up a partnership agreement.

If you plan on forming a limited company, make sure the company’s articles cater for disputes. You may require a separate shareholders’ agreement depending on the complexity of your arrangements. Ownership of a limited company is by holding shares and for a partnership it is by signing the partnership agreement. The terms on which your friend joins will have to reflect what they are bringing to the table, which could be money, know-how, or a customer base.

Make sure that your respective responsibilities are spelled out clearly and that there is flexibility in the relationship. Any form of dispute is usually damaging to the business and costly to resolve, aside from any personal aspects. Use a good set of company articles that cover the most common disputes. Here is an example of a good set of company articles.

6. How much should I spend on advertising?

It’s not a question of how much but where and what exposure you get for your money. Many SMEs fall victim to low rates for copy in a publication that is either totally wide of the mark for hitting your targets or is useless as a one-off.

Set yourself a budget and tinker around with various channels such as the Internet, publications, mailing, and static ads. Watch what your competitors are up to and you’ll get a feel for the type of spend that is normal and then you can decide whether to spend more.

7. How do I get to page 1 on Google?

The $64,000 question. Make sure you are not taken in by companies who guarantee to do this for you and charge you a king’s ransom. The route to a high ranking can be long and arduous but essentially, a holistic approach over a period of months can achieve it.

It is best to use a company who are either recommended or have a proven track record. Some people find it useful to read an introductory book on the subject to enable them to have more effective conversation with SEO consultants.

Aside from organic rankings, you can buy your way in via a pay per click campaign but it is crucial to set budgets until you get clarity on what works for you and which is cost effective. Remember – a click is useless if it does not result in a sale.

8. The bank will only lend if I give them a charge on my house – should I do it?

If you really trust your bank and believe that nothing can go wrong with your business plan, it may be worth considering. Ask yourself if you are the sort of person who sleeps easily come what may and are prepared to move to smaller house if the bank forecloses. You can work out from my reply that it is a very dangerous route to go down to raise finances but history is full of people who took that risk and succeeded.

They say that a bank lends you an umbrella when the sun is out and ask for it back when the rain starts. It may sound funny but it carries a serious message.

9. Sales are good so where's the money going?

The mantra of accountants is that cashflow is the lifeblood of a business. Plenty of businesses have gone to the wall with strong sales figures but simply ran out of cash. Often the main culprit is failure to collect money owed fast enough. Some customers will wear you down with one excuse after the other until months go by and you only get paid the very oldest invoice but you have laid out for stock supplied to them. Multiply this over a number of customers and you can see where it leads. Another common reason is that whilst sales may be good they are simply not good enough sales to cover overheads such as rent, rates and wages. If you are struggling with cashflow, obtain help immediately to find out what is happening. It can take months to rectify so don’t wait until it’s too late.

10. How can I trust my customers to pay me?

The short answer is that you can’t! Many new businesses fall prey to unscrupulous larger businesses or con men who smell their desperation to do business. They know you have probably not got proper procedures in place for credit checking or sending out contracts.

However, in business there has to be an element of trust or else the economy would grind to a halt. Even with every reasonable precaution you are always going to be vulnerable so it is best to start of with smaller orders where your risk is minimised or ask for a deposit that at least covers your costs. The important thing to master is how to recognise when you are being taken for a ride and that is something that only comes with experience.

I hope you found this guide extensive and useful as with most of the resources found inside the community. Post your questions, insights, and especially for the seasoned businessmen and women at TSC – your opinions and advice will be highly appreciated.
Oct 30, 2009
Great post!
I learned a lot from your post.Start up business owners should really think about how they could be sure that the customer will pay them for goods or services. This is the major problem of most start ups. Sometimes customers only pose as sure buyers, get what they order, and then don't pay. I really think that there should be a clear cut way of getting on time payments especially when it's online.

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Dec 6, 2009
Some people are not cut out to "demand" payment / insist on procedures for granting credit - they are low hanging fruit for bad payers and charlatans. You never lose a decent customer for requesting payment , if done properly and in accordance with agreed terms.
Mar 1, 2012

I enjoyed reading your post.
it was very informative and useful.

thanks for sharing with us.
I am in the process of starting up very small but I have a newbie question. Which is better sole propretorship or LTD. what are the advantages VS disadvantages of both. I do not think my volume will be high and will just start out from home and see how things develop. Howveer, i am intrested in importing small amounts of stuff so I will need to deal with the HMRC.

Any Advice?


Retired Moderator
Mar 21, 2011
London, UK.
Hi Walid,

Norman previously wrote about choosing between sole proprietorship, ltd company, partnership, or llp:

I think this is a really good guide that identifies the advantages and limitations of each :)
  • Like
Reactions: Walid El-Tigi
Jun 19, 2012
Very informative post, Touching on many of the biggest issues faced by Start-ups.

Good Advice,

Dec 6, 2009
Questions are the same in France :)
Maybe you could also write about the "How can I be paid by my customers?"
There are so many late payments...

I have written pieces on collecting money - perhaps ask Lace nicely and she'll ask me for a further submission. Failure to collect is the ruin of many a good business , and those who treat SMEs with contempt when it comes to paying are bullies. Don't despair , there are tried and tested methods for getting paid
Sep 28, 2012
Very informative. I totally agree with the cash flow, seek help before it's too late if you're having problems. Some businesses are very good at first, but can't handle after several months. Also with Google rank, remember that business is not a sprint, it's a marathon.