My previous blogs looked at why people start their own business, how to start with no money and what to do before you start. Well, now you are ready to go. How about a quick few first steps when starting a business to help you on your way.
You have now got your plan ready; your product or service is all set for launch; your finances are in place and now is the time to start.
For many, starting a new business means moving out of your comfort zone. You will find that being the ultimate boss brings responsibilities you have never had to deal with before.
Finances are of course vital to the success of a business. I am particularly keen on my clients getting their records in order so we can monitor business performance.
There are other areas too that a new business should get in place as quickly as possible. If you are setting off on your journey of business ownership I recommend these 6(ish) things are put in place very quickly.
Your first steps when starting a business.
It is important to get the right legal structure, whether that be sole trader, partnership or limited company.
Limited companies are commonly thought of as the best option for tax savings. A number of clients I have dealt with have gone straight down this route. However, it is not always the case and, particularly since tax changes in the last few years, it can be the worst option.
Always speak to an accountant – yes, I know that is self-promotion, but it is my blog.
Once the decision is made, register the business with HMRC and Companies House if applicable.
I cannot stress this enough, no matter what structure you use, always get a separate bank account for your business!
A limited company must, by law, have its own account in the company name. But even as a sole trader having a separate account will help you monitor how the business finances are going, make business transactions far easier to track and make accounts and tax returns much easier for you or your accountant to complete.
Don’t let tax rule your business but do put money aside for it.
I suggest putting around 15-20% of your turnover (sales) income aside for tax although this depends on your level of income and the type of business you operate.
In the first year, if you do well, the tax bill can be large for sole traders and partnerships because of the ‘payments on account’ legislation (speak to an accountant if you are not sure about this). By keeping in contact with your Accountant we can monitor the tax position regularly so you can stay on top of your tax payments.
Keeping your records up to date from the start will help you monitor your business and make sure your customers pay you and you pay your suppliers.
There is nothing worse that having an impending tax deadline and trying to put together your books from up to 18 months ago.
Use spreadsheets or software from the start. I recommend Xero software for small businesses but again speak to an accountant about the best option for you. If bookkeeping is really not your thing then outsource it.
Your Accountant will thank you for it!
Website and Social Media
Never has it been more important to get your Website and Social Media presence as visible as possible.
Whether you like social media or not it is the biggest free advertising place for your business and your website is where your potential customers can learn all about you.
Again, you can outsource this, but I would always recommend learning how it all works so you can retain control over what gets posted. Always make sure you have administration rights to your website, even if you have outsourced the building and maintenance of it.
Get a Mentor
Business Mentors are invaluable, choose one that has literally been there, seen that and worn the T-shirt.
My business, for example, changed completely when I took on a Mentor. They can help, advise, be a sounding board and give you a kick when needed. That support is invaluable.
Get the basics in place
Make sure you have the basics covered, such as:
- Have a separate phone and phone number for your business
- Get any licences required in place
- Have business cards ready, particularly if you are dealing with your customers face to face
Don’t be daunted by all of this, you will be surprised by what you can do and learn. There will always be people on hand to help when you get stuck.
We all have our limitations, as my d.i.y. regularly proves. If you need help always ask, there is no shame in admitting you cannot do everything – nobody can.
Finally, enjoy it, running your own business should be fun too.