1. Be sure this is for you.Before you even spend a penny you should think very carefully about the life-changing decision you are making.When I first started I believed there was very little risk involved because I intended to operate from home, as a sole trader. I thought I could give it a go and walk away at any time if things weren’t going right. I was wrong.Even after months of working 15 hour days and running at a loss, I refused to give in. I attribute this phenomenon to partial reinforcement, the same mechanism that keeps the multi-billion pound gambling industry alive! There was always something in the back of my mind that told me that if I kept going, one day I would make a million. To make things worse I read books on sales and positive thinking which resulted in me putting pictures of luxury yachts, sports cars and posh houses on my desk. Every time I received a sale I felt elated and my dream car seemed a little closer! I even changed the sound in my email client to make the ‘ch-ching’ sound of a cash register every time I received a sale!Every time I thought of walking away, I looked at the pictures of my dream life-style and simply couldn’t bring myself to make an objective decision. I made excuses to myself and to others and started viewing the accounts with a very biased, overly-positive view. The other major draw that kept me from cutting my losses was the thought of having wasted all the money and time I’d ploughed into the business, not to mention the feeling of having failed. After all, people always said that I could be anything I wanted to be!When I look back now I realise how important that initial decision was to start the business. It pains me to think that I didn’t spend more than a few hours making the decision (if that).If you only take one thing away from this article then make sure it’s this: it is essential that you invest considerable time in making this life-changing decision. Talk to friends and family, weigh up the pros and cons, compare the likely rewards with alternative career options and, most of all, ensure you are being honest with yourself. Visualisations and success stories can be hugely powerful… and damaging. If you are going into business imagining you are going to be able to reap large financial rewards by only working a few hours a day, ask yourself how realistic this day dream really is. I can assure you that building a successful business takes huge amounts of time, effort, sacrifice and money.This is not a decision you can afford to take lightly and before you even start contemplating the pros and cons of this career choice, you need to do a significant amount of research first.2. Research your market.According to the Office for National Statistics, there were 723,165 babies born in England and Wales in 2010. If you are considering starting a business in the baby/parenting field then this statistic is encouraging. Furthermore, there were 706,248 babies born in 2009 which suggests the potential market is growing significantly.However, a quick Google search of ‘Baby Gifts’ produces approximately 214 million websites. That’s a lot of potential competition! What resources do you have at your disposal to get you to the top of Google above those 214 million sites? You should be very cautious of ‘SEO experts’ who claim to be able to get you to the top and we will talk more about this later. Furthermore, I can tell you from personal experience that being in the top positions in Google for ‘Baby Gifts’ is lucrative, but not a fraction as lucrative as I thought it would be. The average online conversion rate in this industry is between 1 – 2% and you can expect to receive around 50-200 visits per day from occupying a top 3 position for this search term. Once you get below the first 3 spots, the visitor rate drops exponentially.Google Adwords has a free, useful tool which enables entrepreneurs to gauge the size of their potential market and helps them choose search terms (keywords) to target. This tool compares the number of people a month who search for a particular keyword with the level of competition. However, it will usually lead to you overestimating the amount of traffic you will likely achieve and should be used as a general comparative guide only.You need to thoroughly research your market and assess the different ways of bringing traffic to your website. For example, you might find it much easier to market your website offline with leaflets, networking and word of mouth than an exclusively search-based marketing campaign. If you are under the impression that you can start a website, write some content and META info, swap a few reciprocal links with other webmasters and start getting decent Google rankings for lucrative key-terms, I’m afraid you are grossly mistaken.You should ensure that you spend considerable time researching this market: talk to business owners and potential customers in great detail and ensure you gain an accurate and realistic picture of the market and how it works before you begin.If you are unwilling to pick up the phone or to hit the streets with a clipboard and pen then Mintel is a great place to get extremely detailed market research about your industry but you will have to pay a premium for the reports you download.3. Know the law.If you do decide this career choice is right for you then the next order of business will be to familiarise yourself with the numerous legal considerations of starting a business.Business Link used to run a superb service where you could get one-on-one expert business advice in your area. Sadly, due to spending cuts, the service in England and Wales is now limited to their website. I believe Business Link in Northern Ireland still offers the one-on-one service but I could be mistaken.The Business Link website is a trusted resource and has a wealth of good quality information, however, due to the volume of information involved, it is often difficult to find out everything you need to know using this resource alone.I therefore strongly recommend that you spend the money required to get some good quality legal advice from a qualified solicitor with experience in the field. I know this is extremely unappealing but it will save you hours of time and could potentially save you from hefty fines or even imprisonment should you neglect any of your complex legal requirements.4. Create a Business Plan. The degree of planning you do before you start will ultimately determine if you will succeed or fail. The vast majority of start ups fail in the first year. Most of the time this is largely due to inadequate planning. Assumptions are as dangerous to a business as poor cash flow. Make sure your planning is based on research and facts.Deciding on the business structure is one of the first things you will need to do. Most E-commerce websites are set up by sole traders or private limited companies and there are advantages and disadvantages to each type of business structure. In a nutshell, setting up and managing a business as a sole trader is simpler but you will be personally liable for the debts the business accrues. Furthermore, a private limited company is actually fairly easily to set up and run these days, especially if you hire an accountant. I’d strongly recommend you hire an accountant regardless of the business structure you go for. You should expect to pay between Ãï¿½Â£200 – Ãï¿½Â£500 per year to begin with for a good accountant but he or she is likely to save you more than this by ensuring you pay the lowest amount of tax possible.You should also decide on your branding. What type of brand are you aiming to build? This is closely tied to the pricing strategy you will adopt and your target demographic. Who will you be selling to? How much do these people generally spend on presents for babies? What type of companies/brands do these people generally buy from? You can then use this information to produce your marketing plan which will basically tell you exactly how you will target these people. I regret that I cannot go into more detail here but this article is an overview to give you some key considerations. I will cover more detail in subsequent, more focussed articles.Accurate forecasting is also an essential requirement at this stage. You need to make a good educated guess about how much money will be coming into the business and how much will be going out. However, this ‘guess’ should be based on actual data about the market size and the likely percentage market share you will be able to acquire. If you can get your hands on the books of a company in a related field to the one you are starting, this would be ideal.One of the best ways to start a new business is to spend a few months or years working as an employee in a similar type of company to the one you intend to start. This would give you the opportunity to learn everything about the market and provide you with access to the hard figures desperately needed to plan a new venture. However, you will need to make sure there isn’t a clause in the employment contract that prevents you from setting up on your own after you leave the company.Your accountant will be able to help you with the financial forecasting for your new business and he or she will also be able to explain the various financing options that are available to you. Even if you are personally financing this project, ensure that you plan and track every pound going in and out of the business, right from the start.One important thing most business owners overlook is their exit strategy. Ensure you’re not one of them. Although it might seem like the last thing in the world you need to think about right now, having an exit strategy in place from the outset will shape your entire business. Do you want to build this business up so that you can sell it for a big lump sum? If so, how successful will the business have to become for you to sell it? Who will you sell it to and how long will it take you to get the business to this stage?If you don’t sort the exit strategy out now it may cause huge problems for you later. For example, if you come to decide much further down the line that you want to sell the business, you may find that you cannot get a reasonable valuation due to the firm’s daily operation relying heavily on you and your unique skill set, thus devaluing it significantly. In this scenario, if you had planned to sell from the start you could have ensured your role was easily transferable.Arguably the most important decision you have to make at this stage is what to call the business. This is a pain staking process as you will find that virtually everything good you think of has already been taken. However, you cannot cut corners here as the name is essential – it is your brand and trying to change the name at a later date is incredibly difficult. There are entire books written on just this subject and I will dedicate a subsequent article to just this topic. However, the main tip I shall give you here is to thoroughly research your chosen name to ensure that it is not currently in use by another party. The last thing you want is a lengthy legal battle somewhere down the line as this could result in you being forced to change your name and to pay compensation. Do internet searches in the first instance and then progress to more comprehensive searches such as a Companies House check. If the name has not been registered with Companies House then register it right away. Even if you plan to operate as a sole trader, registering the name with Companies House will protect it and you can leave it as a dormant company until you decide you want to active it. You should also register your company domain name at this stage.The planning considerations listed above will form part of a much more comprehensive document, the business plan. This is not a static document; it adapts and evolves with the business to ensure it’s always accurate. It helps you to objectively measure your success at every stage and keeps you focussed and on the right track. It is also the first thing potential investors will want to see if you decide to seek finance.A worrying number of entrepreneurs don’t bother with a detailed business plan. You should use every advantage you can to propel yourself above the competition. If you have a comprehensive business plan from the outset then as soon as the starter’s gun goes off you’ll ensure you accelerate in the right direction, leaving the competition to fumble around on the starting line.5. Hire a professional to build your website. Once the planning stage is over, you can begin to build your business. Obviously the major task you face at this stage is building an E-commerce website.Imagine you are opening a traditional bricks and mortar store. Do you pick a location at will and hire a builder and decorator at random to build and furnish your shop? Of course you don’t. Well the same care and attention to detail should go into your online shop.When I first started I knew a little about website design and so, to cut costs, I decided to design the entire site myself. I dread to think how many hours I’ve spent since addressing problems and attempting to improve the design. That time could have been much better spent on tasks much more worthy of my time. Furthermore, as web technologies progressed my website was left behind as it was held back by my limited knowledge. It also made it very difficult for a professional to come in at a later date and improve it. In fact, over the past three months my entire site has been rebuilt from scratch so that it can compete online and I look forward to its imminent launch.The new Lullaby Babies website will be fully loaded with all the latest features as well as having a much sleeker and professional design. However, it was a very difficult decision to start again from scratch and to invest a considerable amount of money in doing so. If I had hired a professional from the outset then the website would have been able to evolve, incorporating the new technologies along the way. Therefore I recommend you find a reputable web developer in your area and hire them to build your website.Make sure you research the web developer in great detail and ask to see numerous examples of his or her work. Web designers have different specialities and it’s essential that the person you choose has built a range of E-commerce websites before as these are much more complex than content- based websites such as blogs or personal sites. You should sketch out all the features you want the site to have and plan how it will look and feel from the customer’s perspective. You should use and reference existing websites to help you accomplish the task. Ensure you explain your brand in detail to the developer. It’s essential that he or she uses fonts, colours, images, logos etc. that are in line with your brand.Ensure your E-commerce site is built on a popular CMS (content management system) such as Magento. This will allow you to add new products and content to the site with just a few simple clicks. It will also enable the website to evolve with the times.Ask the designer to produce a detailed breakdown of the work involved so that the costs are transparent. This breakdown should also include time-frames and stages of development and you should arrange to evaluate the website at every stage.Finally, don’t put too much faith in the website designer’s SEO (search engine optimisation) claims. Whilst it is essential that they have good knowledge of SEO to build you an ‘SEO-optimised’ website, they are unlikely to be able to get you to the top of Google for your ‘big business’ key-phrases. Unfortunately you will need a specialist SEO-company for this due to the complexity and constantly evolving nature of the industry. This industry is an absolute minefield and it’s full of dreadful companies that take your hard earned cash and do absolutely nothing for your website. There is no regulation and it’s a subject I will cover in great detail in a future article to ensure you avoid making the classic mistakes.This concludes my first article; I hope you have found it useful. This is a two-part article and in the second installment I will continue the list of start-up considerations. Further articles will cover individual subjects in greater depth and if you have any suggestions for future topics please contact me via my company website.