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Five factors to consider before starting your own business!
There’s lots to think about before you start your own business.
Here are five factors to consider when setting off on your entrepreneurial journey:
✅Business structure
One of the key decisions you need to make when starting a business is which legal structure to select. The best choice for your venture will be dependent on your personal circumstances so it’s important you understand your options.
The main types you can choose are being a sole trader or a limited company.
Sole trader is the easiest structure to set up because it involves limited paperwork and legal obligations, but it could mean you have reduced access to finance, less credibility in the marketplace and problems attracting customers.
Creating a limited company is more complicated and involves more costs and paperwork, but it can be advantageous when it comes to raising funding, encouraging trust among your customers and gives you more ability to time personal tax payments.
✅Business plan
Many entrepreneurs find writing a business plan at the start of their entrepreneurial journey to be a very beneficial exercise. It can help you work out if your idea is feasible and keep you on track with your objectives as your business grows.
A plan is also often a mandatory requirement when applying for finance or pitching to investors.
Key details to include in your business plan include:
1️⃣The gap in the market the business is filling, backed up by market research
2️⃣Your business goals and objectives
3️⃣Your unique selling points
4️⃣Your marketing strategy
5️⃣The team you have on board as co-founders, employees or advisers
6️⃣Sales and cash flow forecasts
An accountant can help you create a credible and professional plan.
✅Funding and costs
It’s important that you estimate your start-up costs before launching your business. The level of costs you face will depend on the type of venture you are launching but it could include expenses related to property, equipment, office furniture, insurance, energy, suppliers and recruitment.
Once you’ve worked out your costs, spend time understanding how much working capital you need to run your business by formulating a cash flow forecast. An accountant can help you do this.
You may require external finance to start and run your business so be clear about your options.
Many entrepreneurs turn to friends or family for their initial start-up capital. If you go down this route, you should both be very clear about whether the funding is a gift, loan or investment. Consider formulating a formal agreement and seeking independent legal advice.
Other options include a bank loan which is secured or unsecured finance that you must pay back with interest. Read advice on how to get a business loan here.
Traditional bank loans can be hard to access for new businesses, so the Government’s Start Up Loans scheme could be useful.
You could also track down grants which are funding that you don’t have to pay back.
✅Find an accountant
You need to wear many hats when starting your own business which can be challenging. This is where an accountant can help.
They can help you manage your finances, monitor your cash flow, comply with your tax responsibilities, improve your tax efficiency and avoid penalties for filing your tax returns late.
An accountant is also useful as your business grows to ensure that you maximise all opportunities. Working with an accountant in the early days of your business means you can build a good relationship with someone who fully understands what you are trying to achieve and can assist in your business’ growth.
✅Employee issues
If you launch your new business with employees or plan to recruit some in the future, there are several factors to consider.
You need to know how you are going to find your staff. Options include using a recruitment agency, your company website and social media networks like LinkedIn.
You should also think about where your employees will work. You might decide to have your own office, use a co-working space or adopt a hybrid working approach.
Other factors to consider are training and benefits for staff to keep them motivated, productive and skilled, as well as employment law which imposes legal obligations on employers.
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