The CSD Guide to starting a design business

starting own business

Starting your own business can be an exciting and rewarding endeavour, but it is not without risks. Studies show that 1 in 3 start-ups in the United Kingdom fail within the first three years, and 20 per cent of them in their first year.

This is often because of improper planning, lack of business knowledge, failure to conduct market research or simply setting unrealistic expectations.

However, the good news is that many new businesses do become successful and profitable, and you can increase your chance for success by making sure you plan properly.

Most businesses get their start from a single idea which must be turned into a product or service that people will want to buy. The following is a general overview of the steps you should take to do this, split into two parts: setting up and business planning.

Part one: setting up

Research your market

Researching your market allows you to address problems before wasting too much time, effort and money. It involves identifying and contacting potential customers to determine whether your idea meets a need: you want to make sure that there is a real demand for what you are planning to sell.

Make sure you:

  • Identify and talk to potential customers about their specific needs.
  • Make a prototype of the product, test it with potential customers and ask them for feedback.
  • Find out what potential customers would be willing to pay for the product or service. Try different pricing with different customers to see what people will really pay. This will help ensure you can make a return on your investment.
  • Determine what makes you stand out from competitors. Are you providing something better than or different from what is already available?

Develop and plan your product or service

  • Test your product or service with real potential customers; make changes based on their feedback and test it again.
  • Continue to test until you are sure that customers will be willing to pay what you are asking and that their needs are being met.
  • Address any issues, including how you are planning to make and sell the product or service.
  • Write a business plan to show the results of your customer research and explain that your idea is viable. This will be essential in helping you secure funding and find partners.

Find partners and suppliers

You need to work with others to develop and sell your idea. Many businesses start with just one person, but consider taking on partners and suppliers:

  • Having a partner allows you to bring in someone with different skills and expertise with whom you can share responsibilities.
  • Contact potential suppliers if you need raw materials, supplies or equipment to run your business. You should get estimates, negotiate prices and develop relationships with reliable and trustworthy suppliers.


  • Decide what legal structure your new business will take: sole trader, partnership or limited company. Each structure affects personal liability, tax requirements and control issues.
  • Decide if you will be employing staff. If so, this may require additional legal responsibilities, such as health and safety compliance, insurance requirements, licences and permits.

Find additional funding

If needed, explore different sources of funding, including bank loans, government-backed schemes or selling shares.

Further resources

For business advice and support over the phone, you can call the Business Link Helpline on 0845 600 9006 (Monday – Friday, 9:00 to 18:00).

There are also business training courses available from the National Careers Service, and many business training and networking events are listed here.

For help in developing business ideas, you can also visit the National Enterprise Network.

Part two: business planning

Creating a business plan is one of the most important aspects of starting a new business. It can help you focus and clarify your ideas and business objectives, plan for the future and attract investors and funding.

It may sound like an overwhelming task, but it is actually quite manageable when broken down into steps. All business plans should be jargon-free and easy to understand and update.

The following sections outline what should be included.

Executive summary

The executive summary is an outline for your business plan. Although this is the first section, complete everything else before you write it. It should highlight all the main points in the rest of your plan, including:

  • Your product or services
  • The opportunity in the market
  • Financials and forecasts

Keep it brief and straightforward, but make sure that it is appealing for investors.


The second section (but first step) is to write down the basic details of your business, i.e.:

  • The name of the business
  • The registered address of the business
  • The business’ website
  • Contact details, including email
  • The legal status of the business (partnership, company, etc)


In this section, you need to describe the background and vision of the business. This should include:

  • When do you plan to start the business?
  • What sector will you operate in (e.g. construction)?
  • Any related experience you have
  • A description of your products and/or services, specifying:
    • What makes your product or service different or better than all others in the marketplace
    • Why you think customers will prefer it
    • How you will develop it over time
    • Details for any patents, copyrights, trademarks or design registrations you hold or plan to hold


Lay out what your business goals are, but make sure they are measurable: you will want to assess them periodically to see if you are meeting them. This section can include:

  • How do you want the business to progress in the future?
  • What goals do you want to achieve in the next year? Three years? Five years?
  • What are your long-term goals for the business?

Legal obligations

Write out any legal obligations you may have, such as:

  • Licences
  • Insurance
  • Health and safety law requirements
  • Other legislative requirements

Market research

As explained above, you need to make sure that you have a group of buyers with a common need that you can satisfy at a profit. In this section of your business plan, provide information about the market research you have conducted.

Elements to include are:

  • Your market knowledge: information on market size, potential for expansion, market trends and any potential customers and competitors in the marketplace.
    One way to get this information is to find similar businesses and potential customers and ask for their feedback through a structured process, such as a questionnaire.
  • The group(s) of customers you want to target, their needs, what they expect to pay and what they are willing to pay. This can include profiling potential customers by age, sex or interest.
  • Compile a list of competitors and assess their strengths and weaknesses. Specify how you can improve on what they are offering to show that you have unique selling points.

Sales and marketing

Use this section to show how you will position, promote, market and sell your product to customers. It should include the following:

  • A business model describing how you will use the product or service to generate income.
  • The sales channels you will use to distribute your product or service to the market (for example, phone, internet or face-to-face). Base your sales channels on feedback from target customers.
  • A pricing structure outline that details your costs and how much above this price your target customers are willing to pay.
  • An overview of how you will promote the product or service. This does not have to be too specific, as you should have a separate marketing plan.


The financial section of your business plan will help you lay out forecasts and projections to determine whether your business will be economically viable. Your financial section should include:

  • Estimated running costs: calculate how much you will spend on equipment, premises, materials, stock, transport, insurance and potential employees.
  • Sales forecasts: analyse customer spending habits and the performance of similar businesses.
  • Profits and loss forecasts: outline potential risks, such as rising costs, and list assumptions that support your forecasts.
  • Cash flow projections: identify potential shortfalls and determine whether you will need additional funding. If so, know how much and when you may need it.

Once your business plan has been completed and implemented, make sure to revise it when necessary. The business environment is constantly changing, so keeping your plan updated can help you stay one step ahead of the curve.

Categories: Design, Resources