Starting a business advice

Starting a business is the ambition of many people. Some may have been made redundant and find themselves with free time and financial resources. Others make the decision to start up in business to be more independent and obtain the full financial reward for their efforts.

Whatever the reason, a number of dangers exist. Probably the greatest concern is the possibility of business failure.

Read on for guidance on some of the factors which need to be considered before trading begins.

Initial considerations

Number of key factors to consider in order to set the foundation of success for your business.

  • commitment – starting a business is demanding, determination and enthusiasm are essential
  • skills – you will need managerial, financial, technical and marketing skills. if you do not have these skills personally, they can be found in a partner or employee, or acquired through training
  • your product or service should have a proven or tested market, but must not conflict with the patent or rights of an existing business.

In addition to these general considerations there are a number of more specific matters.

The business plan

A clear business plan is a blueprint that will guide your business from it’s infancy phase through establishment and eventually business growth, and it is crucial for all new businesses.

Off course there are different types of business plans for different types of businesses.

If you are considering financial support from investor or financial institution, a formal business plan is must as investors and banks look for common set of sections when they are validating your idea.

Otherwise a simple one-page business plan can give you clarity about what you hope to achieve and how you plan to do it. In fact you can create a working business plan in your mobile notes and improve it over time. Some kind of plan in writing is always better than nothing.

Business structure

Three common types of business structure:

Sole trader

This is the simplest form of business since it can be established
without legal formality. However, the business of a sole trader is
not distinguished from the proprietor’s personal affairs.

Partnership

A partnership is similar in nature to a sole trader but because more people are involved it is advisable to draw up a written agreement and for all partners to be aware of the terms of the partnership. Again the business and personal affairs of the partners are not legally separate. A further possibility is to use what is known as a Limited Liability Partnership (LLP).

Company

The business affairs are separate from the personal affairs of the owners, but there are legal regulations to comply with.

The appropriate structure will depend on a number of factors, including consideration of taxation implications, the legal entity, ownership and liability.

Get an accountant to help you

Well, we would say this, but it doesn’t make it any less true! When deciding a business structure, it’s always best to seek specialist advice from an accountant such as AKKS.

We can help you selecting the most tax efficient structure and off course provide ongoing support by phone/email and in person.

Starting a small business advice

There are more than 5.8 million small businesses in the United Kingdom, making up a whopping 99.3 percent of all UK Businesses, according to the Federation of Small Businesses (FSB). The moment you consider some of the most popular reasons for starting a small business, including having a great business idea, planning a career that has the flexibility to grow and prosper with you, working towards financial independence, and investing in yourself/family – it’s no surprise that small businesses are everywhere.

But not every small business is positioned for success, In fact; only about two thirds of businesses with employees survive at least two year. So you may be in for a real challenge when you decide to jump, ditch your day job, and become a business owner. The stage is often set in the beginning, so making sure you follow all the necessary steps when starting your new venture can set the foundation of success.

What help is available?

Fortunately, when it comes to small business, Government-backed advice services around the UK will help you with everything from researching the market, to finding finance and recruiting staff, depending on where you live:

Do your research

Most likely you have already identified a business idea, so now it’s time to balance it with a little reality. Does your idea have the potential to succeed? You will need to run your business idea through an evaluation process before you go any further.

In order for a small business to be successful, it must solve a problem, fulfill a need or offer something the market wants.

There are a number of ways you can identify this need, including research, focus groups, and even trial and error. As you explore the market, some of the questions you should answer include:

  • Is there a need for your anticipated products/services?
  • Who needs it?
  • Are there other companies offering similar products/services now?
  • What is the competition like?
  • How will your business fit into the market?

Don’t forget to ask yourself some questions (about setting goals, consider laws and regulation, establish a support network and off course ensure you have the right mindset) too, about starting a business before you take the plunge.

Plan your finances

Starting a small business doesn’t have to require a lot of money, but it will involve little initial investment as well as the ability to cover ongoing expenses before you breakeven or turning a profit.

Prepare a spreadsheet that estimates the one-time startup costs for your business (market research, property lease, legal fees, branding/marketing and equipment etc.) as well as what you forecast you will need to keep your business running for at least 12 months (rent, utilities, marketing and advertising, supplies, travel expenses, employee salaries and your own salary etc.)

Those numbers combined is the initial investment you will need.

Since you have rough number in mind, there are number of ways you can fund your small business including:

  • Financing
  • Small business loans
  • Small business grants
  • Angel investors
  • Crowdfunding

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Decide and Register Your Business Name

Your business name plays a crucial role in almost every aspect of your business, so you want it to be a good one. Make sure you think through all of the potential implications as you explore your options and choose your business name.

Once you have chosen a name for your business, you will need to register it, depending on the choice of business structure.

  • Self-employed registration
  • Register partnership or limited liability partnership (LLP)
  • Private limited company formation

Since digital presence plays an important role for every business success, therefore don’t forget to check and register your domain name while selecting your business name.

Get Licenses and Permits

Administration and paperwork is a part of the process when you starting your own business.

There are number of different licenses and permits depending on nature of business you are starting and where you are operating, but many may not require any license rather affiliation, certification or accreditation in order to prove the authenticity.

You will need to research and determine what apply to your business.

Choose Your Accounting System

Small businesses run most effectively when there are systems in place. One of the most important systems for a small business is an accounting system.

Your accounting system is necessary in order to create and send invoices, track anything outstanding, manage your cash flow and get up-to-date financials in order to make timely right decisions as well as file your taxes.

Get an accountant to help you

We can help you selecting the most suitable software, help you setup and provide ongoing support by phone/email and in person. AKKS Small Business Accountants certified by industry leading software providers.

Set Up Your Business Location

Setting up your place of business is important for the operation of your business, whether you will have a home office, a shared or private office space, or a retail location.

You will need to think about your location, equipment, and overall setup, and make sure your business location works for the type of business you will be doing. You will also need to consider if it makes more sense to buy or lease your commercial space.

Get Your Team Ready

If you will be hiring employees, now is the time to start the process. Make sure you take the time to outline the positions you need to fill, and the job responsibilities that are part of each position. The Gov.UK has an excellent guide to employing your first employee that is useful for new small business owners.

If you are not hiring employees, but instead outsourcing work to independent contractors, now is the time to work with an solicitors to get your independent contractor agreement in place and start your search.

Lastly, if you are a true solopreneur hitting the small business road alone, you may not need employees or contractors, but you may still consider having your own support team. This team can be comprised of a mentor, small business coach, or even your family, and serves as your go-to resource for advice, motivation and reassurance when the road gets bumpy.

Promote Your Small Business

Once your business is up and running, you need to start attracting new customers.

You’ll want to start with the basics by writing your unique selling proposition and creating a marketing plan. Then, explore as many small business marketing ideas as possible so you can decide how to promote your business most effectively.

Once you have completed these business start-up activities, you will have all of the most important bases covered. Keep in mind that success doesn’t happen overnight. But use the plan you’ve created to consistently work on your business, and you will increase your chances of success.

Good luck!