With the new year fast approaching, it’s understandable that you may be starting to make plans for what direction your life will be heading in 2018. One big change might be to start your own business, a decision which could fit entrepreneurs of any age; while 60% of millennials consider themselves entrepreneurial, it is actually the over-55s who make up 51% of small business owners.
But once you’ve decided on your business model and conducted your market research, there are still some important factors you need to bear in mind before you begin operating, whether you’re a pop-up or contemplating global domination. Here are three of the most significant things to bear in mind if you’re starting a business in 2018.
New business rates legislations aren’t friendly to SMEs
Having been in a state of flux since the financial crisis, business rates in the UK were finally revalued at the start of April this year, and the outcome is initially off-putting. Described by the national chairman of the Federation of Small Businesses as “a living nightmare”, some businesses have faced rates of up to 60%, though a £300m bail-out fund is available for those in particularly pressing need. Still, with rates hikes becoming a potential harbinger of homogenised high streets, many business owners have been left wondering what can be done.
One way to avoid the extortionate rates, which could stop your business before it gets out of the starting gates, would be to rent a serviced office as your base of operations. For SMEs, serviced offices are better value for money than conventional commercial leases, as you will not have to pay additional financial burdens such as rates and maintenance. These are either factored into the cost of the serviced office rental or excluded altogether and payed by your office provider. Whether you are working in food service or customer service, rented commercial space has become a vital way for new businesses to get started. Plenty of companies, such as Dephna, not only offer serviced offices and commercial kitchens for rent, but allow you to customise your business space as you need it.
Rental costs and international competition
With the rise in rates comes a potentially off-putting rent hike for small businesses as well. While London remains the UK’s startup hub—and the record level of investment in the first half of 2017 has borne this out—some nations are trying to sway London entrepreneurs out of the capital. Then again, some companies are already thinking about making their move without any further interference; the Financial Times reported that a recent survey saw 38% of startups polled “considering moving their headquarters…or opening a mainland European outpost.”
Even before Brexit became a concern for business, London commercial rents were experiencing a profound increase of 70% between 2010 and 2015; the eight most expensive parts of the city to rent office space all cost over £100 per square foot per year. Consequently, for those entrepreneurs reluctant to leave the UK, setting up shop outside of London—who remembers the Northern Powerhouse?—may be the best way to establish your new business at a much lower costs.
Be careful with your data
While it doesn’t come into effect until May 2018, you and your employees will need to prepare for the General Data Protection Regulation (GDPR) sooner rather than later. GDPR is a new EU-led (but mandatory, even after Brexit) initiative to supercede the Data Protection Act 1998. Under this new legislation, SMEs will need to ensure that data protection rules, especially those around data consent, are adhered to, and that employee (and client) data is handled with confidentiality as a priority.
IT Pro has noted that this will be easier to do for SMBs than bigger businesses, but that companies of all sizes will need “to keep detailed records on their own processing activity,” whether your data is stored on physical servers or in the cloud. You will also need to report any data breaches, or risk a potentially-crippling fine of up to 2% of your business’s annual turnover.
These may seem like off-putting factors for anyone contemplating starting a business. However, if you’re serious about establishing yourself at the forefront of your industry, these issues won’t stand in your way of achieving startup success.