Starting your own business can be exciting and stressful, but it is important to understand the implications before embarking down this road...
Here are a few tips to help you try and make the best decisions in starting up your business...
SOLE TRADER OR LIMITED COMPANY?
Whether you will be a small business or a limited company is a really important decision that will impact how your business pays its tax and your legal and financial responsibility. As a sole trader you will be classed as self-employed and can keep all of your businesses profits after you have paid tax on them – you can find out more about setting up as a sole trader on the HMRC website: www.gov.uk/set-up-sole-trader
KNOW YOUR COMPETITORS
Whilst researching your potential new business you need to assess the market place. How many competitors do you have, how established are they, what are their USP’s and what is the differences in their pricing? You can find out how many of your competitors are in your area from online directories.
WHEN SHOULD YOU PAY YOURSELF
Forecasting is the only way forward to determine when you can start paying yourself and how much you will need to live on. Some people prefer to have a part time job whilst starting their business. This provides a steady income and also give you money to invest in your business. By working out a cashflow of your projected earnings and expenses you will be able to determine whether you will need an additional job to cover you.
Writing and adhering to a business plan is integral to the success of a business. Your business plan needs to include what you want to achieve and how you will achieve them as well as your financial projections for the first year. Don't give up on your plan after this time, next step forecast a five year plan. You will always need goals and objectives.
It is important to know how much income the business is generating and how much you are spending. This can be recorded simply on a spreadsheet or on a specific software. The financial side of the business is where some businesses come unstuck. This is where we can help you. We can provide you with a full book keeping service whether you are a sole trader or Limited Company. If you are planning on embarking into the world of self employment, give us a call or drop us an email to see where we can help and offer advice.