By Julie Robertson BA FCCA, JRW Chartered Accountants
As we start a new year, this is often a time for reflection and making fresh starts.
But if you have ambitions that go way beyond renewing your gym membership then this article might be of real interest to you. If you have always dreamt of starting your own business and being your own boss, there are a number of considerations that you should take into account before taking the plunge into the world of self-employment.
Factors such as should you consider Franchising? How can you raise finance and get a grant? Which business structure should you choose? Do you have a Business Plan?
Setting up and running a business takes a lot of time and commitment, the rewards can be great but you have to know why you are starting your own business and what you are getting into. Here is our guide to the main considerations before starting a new business.
* Decide on your business structure. You can trade as a sole trader, partnership, limited liability partnership or limited company. They all have different tax consequences and responsibilities and you should take advice on which one is best in your circumstances.
* Identify your strengths and especially your weaknesses. Identify areas where you need to get advice.
* Produce a financial forecast so that you know what funding you are likely to need and be conservative.
* Investigate the competition thoroughly, don’t take them for granted and look to take advantage of their weaknesses. You must also constantly be on the lookout for what they are doing.
* Research your market to ensure there is a demand for what you are offering.
* Decide on your marketing plan. Just because you have a good product or service doesn’t mean you will sell anything. Getting the marketing right can be the difference between success and failure.
* Decide on what staff you are likely to need and what skills they need to have. You will have to operate PAYE for any employees you have although your accountant can help with this. You’ll also have employment law and health and safety law that you must be up to scratch on.
* A business plan is an important document to put together even if you don’t need to raise finance. It will help you to be properly focused.
* Design your business stationery, ensuring it not only meets your legal obligations but conveys the image you want to get across.
* Decide on how you are going to keep your accounts and get advice from your accountant from day one.
* Make sure you register with all the relevant authorities including HM Revenue and Customs and decide if you need to register for VAT.
* Consider all the necessary insurances you need including public liability, keyman, stock, business assets, business interruption, bad debts, motor insurance, employer’s liability (compulsory if you have employees), professional indemnity and permanent health insurance.
* Use trusted advisors such as accountants and solicitors to help guide you. Not getting the right advice can be costly.
How we can help you
Whilst there are many common issues to consider for new businesses, every business start up situation is different and expert advice at the beginning will pay for itself many times over. JRW can provide expert advice and assistance with business plans for funding, setting up your book-keeping system and tax planning at the beginning of setting up your business venture. Give us a call if you have plans to set up your new business.