Starting in business….?

We take a look at what to do, and what to avoid,
when starting-up a new business.

Around 400,000
businesses start up every year. It is estimated that around one third of these
cease trading within the first three years. But new business owners do not set
out to fail. So what steps can you take to ensure you don't fall into the
failure category?

Starting up a new
business can seem like a minefield. Should you trade as a sole trader or as a
partnership or company? Start-up costs also require funding, which has to be
found and secured. Then there are administrative responsibilities such as bookkeeping
and invoice processing. When you register your new business with HM Revenue
& Customs you must also decide if you need to register for VAT and PAYE
(Pay As You Earn). The VAT registration threshold is currently £79,000 and
there are a range of schemes which may be appropriate for your new business. As
for PAYE, you may have heard about the new system that requires employers to
report payments to staff in real time. This has added another layer of responsibility
for business owners.

But, when you start
up, what you really want to do is take your entrepreneurial talents into the
marketplace, make a profit and enjoy your new found freedom.

Some may have
thought it was that easy and maybe many of them are the ones that do not make
it past the three year mile post. Here are some important tips to help your
start-up get off, and stay off, the ground.

Consider the franchise model

While there is an
upfront cost when buying into a franchise, you have the advantage of buying
into the expertise of the franchisor. You will need to research which
franchises might be appropriate for you but there are always a wide range
available. Franchisors offer varying services and so research, particularly talking
to those who are experienced in franchising, is important. Maybe you could
arrange to talk with those who are operating a franchise in which you have an
interest.

There are more
than 900 franchises available in the UK, which together turn over more than £13
billion and employ more than half a million people. The British Franchise
Association reports that 91 per cent of franchises are profitable, which means
that nine per cent are not. Careful planning is essential as your investment is
at risk if the business fails.

Business structure is important

There are
advantages and disadvantages for each trading structure – be it a limited
company or an unincorporated business – with respect to control, perception,
support and costs.

The choice of
business structure can also be relevant in how you extract money from the business.
A limited company is a useful tax shelter but only until you take the money out
for personal use. There are different ways of doing this, for example with salaries,
dividends, loans or rent.

We can discuss your options
and the implications of each of these with you, to help you determine which is
most suitable.

Fail to plan and you plan to
fail

The more
forethought you can give to the task of running your business, the more likely
you are to succeed.

We can help you
plan but here are just a few questions you might like to consider before you
start:

  • What are your prospects given that
    the economic climate remains a difficult one?
  • Have you any funds you can put into
    the business?
  • Do you need help raising finance for
    your business?
  • Are you familiar with the legal
    requirements that will be placed on you as a business proprietor?
  • Have you considered how much you will
    earn during your first year?
  • After business expenses, including
    taxation and national insurance, have you estimated what your salary and
    profit are likely to be?
  • What are your income requirements?
  • Have you considered how you can
    minimise your tax liability so that you keep more of what you earn?
  • Have you considered how technology
    can benefit your business?
  • Have you decided how the internet can
    be used to your advantage?
  • Does social media have a role to play
    in promoting you and your business?
  • When do you envisage retiring? Some
    business owners have failed to make enough money to save for their future
    aspirations.

Always keep your
medium and long-term goals in mind. Running your business more cost-effectively
can be achieved only if you have the vision to project your goals into the
future.

Where do start-ups incur costs?

  • Advertising,
    marketing and promotion
  • Communications
    and infrastructure
  • Cost
    of finance
  • Equipment
  • Insurance
  • Office
    supplies
  • Professional
    fees
  • Product
    development
  • Transport
  • Website
    and technology

How we can help

We aim to make sure you are as successful as possible and, with careful
planning and the right advice, we can help you earn more and pay less tax.

Viewing
us as your business adviser, as well as professionals trained in traditional
accountancy and tax compliance, could boost your company's bottom line. We are
experienced at guiding businesses through the start-up period and, as well as
advising you on what to do, we can give you some tips about what not to do.

As well as taking
care of your routine accountancy duties, we can also give advice on budgets,
profitability improvement and operational procedures.

Other services we
can offer:

  • Developing your business plan
  • Helping you identify sources of start-up
    funding
  • Preparing budgets and making
    projections
  • Acting as a referral source to help you
    find a solicitor, banker or insurance agent
  • Devising the best structure for your
    business and advising you on when to incorporate
  • Advising you on the acquisition and
    implementation of a computer system and software.

 Contact us with any
questions you may have about starting out in business.