START A BUSINESS TODAY
Starting up in business can be scary, but it really doesn’t need to be. You may be worried about taking the plunge from being employed and the financial security that brings, but if you have the right motivation and drive then you will be a successful business owner. Having the right mindset and understanding what you want to achieve from starting your business are the first steps to put in place.
Make a decision of exactly what business you want to run and don’t go into it blind. Before starting out make sure you do your research. What sector does it fall under? Who will your competitors be? How will you get your first client? Is there a market for your goods or services? All of these questions are really important to establish if your business will be viable.
Decide on a business name, this needs to be something catchy, not too complicated and easy for people to remember. More importantly it needs to be unique. Your branding is the first thing that people will notice and it needs to give the right impression. Make sure you check the availability of your business name, this can be done on Companies House website. Your own website is a great platform to advertise your business. Most people turn to the internet to do their research so be visible. Check that your domain name is available, there are many websites which will enable you to do this but here is a link to Wix. For more information on choosing a company name visit the government website.
WRITE A BUSINESS PLAN
A business plan will help you to clarify the reasons for starting up your business, and what your objectives are. It will help you to understand any potential risks and how you can overcome them before they actually happen. It’s also important to look back on your business plan in order to reflect on what you have achieved and what progress has been made. If you need financial support in order to start-up your business you will need to present your business plan. If you’re unsure of where to start take a look at the Princes Trust website, they have free templates which you can download.
ESTABLISH YOUR COSTS & BUDGET
A business budget is an overview of your finances. It will state what your current financial situation is and what to expect in the long-term. Establishing a budget from the outset is really important to ensure that you don’t overspend. Setting a budget will confirm whether or not your business is sustainable. It will help you to make financial decisions without causing detriment to your business. Your business budget will help you to determine where your potential over spends are, highlighting where you can make cost savings in order to increase your profits.
So how do you put a budget together?
Make a list of the sources of your income
Set out your fixed costs - these are business expenses which will be the same each month, ie software subscriptions.
Determine your variable costs - these are costs to your business which can change month on month, for example travel expenses.
Predict one off spends - You may have expenses which are just one off annual amounts, so include these in your forecast. Don’t forget to factor in any unexpected costs which may occur such as damaged equipment for example. Having a contingency plan included will mean there will be no nasty surprises.
Evaluate - Now pull all this information together and see what it looks like, this is your Business Budget.
DECIDE ON YOUR BUSINESS STRUCTURE
There are various different business structures you can choose for your business. The most common are; Sole Trader, Partnership or Limited Company. The structure you choose is important as it determines your taxes and expenses, day-to-day running of the business and whether or not your personal assets are affected by your business finance.
Sole Trader - Your business will not be treated as a separate entity, you can still have a business name but you will be ‘Trading As’. Your personal finances are the same as your business finances, so you will therefore be responsible for any debts which the business incurs. If your business is ‘low risk’ without many overheads then this option may be ideal for you. Due to the financial status of a Sole Trader it can be more difficult to get financial support, such as business loans. You will keep any profit you make after tax.
Partnership - This is just as it sounds, more than one person who owns the business. This is the most basic form of more than 1 person running a business. Both Partners will share the responsibility of the business and any profits after tax. You will need to choose a business name together and decide who the ‘nominated partner’ is. This is the person who will be responsible for submitting tax returns and keeping necessary records, although both/all partners will need to submit a self assessment tax return.
Limited Company - Your personal finances will be treated separately from your business finances and therefore any debts incurred will be the companies liability and not yours. The business will be owned by shareholders. You will need to pay corporation tax as well as each shareholder completing a Self Assessment tax return. Your business will be more likely to access financial support such as loans.
DECIDE ON YOUR PROCESSES
You will need to put processes in place for the day-to-day running of the business. This will help to streamline your daily activities and help you to acknowledge any inefficiencies. You also need certain procedures in place to ensure that you are complying to laws and regulations. Not only should you have hard copies of your processors and procedures but you should ensure that they are kept up to date and any employees are aware of them and follow them.
AVOID COMMON MISTAKES
Common Business mistakes are things such as;
Not doing your research
Not writing a business plan
Choosing the wrong business structure
Not putting processes in place
Failing to write down your goals
Not being an expert in your field
For a successful business don’t make amateur mistakes
START SELLING AND STAY POSITIVE
So what are you waiting for? Get your business started today! Realise your potential, set your goals, do your research and we wish you the best of luck. For advice and guidance please get in touch.