If you’re planning to start your own business, take note of these top tips from our business start-up accountancy expert EMMA CLEMO.
There are different types of business structures and choosing the right one depends on your own circumstances and the tax advantages of each. Setting up as a sole trader or as a standard partnership are both relatively straightforward options but may put your personal assets at risk. Becoming a limited company or limited partnership will help protect those assets but the formation process involves Companies House and is rather more complex. Get expert advice if you can.
Do your homework
Make sure you research your business sector. Who are your competitors, what is your unique selling point, is there a gap in the market, who are your customers and how are you going to reach them? Do you know who your suppliers are going to be and have you factored their costs into your prices? Get as much advice as you can from bank managers, accountants and solicitors. Many of them offer a free initial consultatation.
Tools of the trade
What equipment are you going to need and how are you going to finance it? Remember to include keeping your data secure and backed up in your calculations.
Make sure you register your business
You’ll need to register for Self Assessment with HM Revenue and Customs whatever your business structure and there are deadlines for doing this. Sole traders and partnerships need to sign up for income tax and National Insurance, whilst limited companies are liable for corporation tax. If your taxable business turnover exceeds £85,000, you must also register for VAT. Will you be employing anyone? If so you’ll need to register as an employer with HM Revenue and Customs and The Pensions Regulator.
Get the bookkeeping right
Detailed accounts need to be kept – so how are you are you going to do that? Cloud-based software such as Quickbooks, Kashflow, Sage, Xero etc. will all help fulfil HM Revenue and Customs record-keeping requirements as well as letting you check profitability, money owed to you, money owed to suppliers and general cashflow and banking details. It’s also likely that you’ll be having to upload facts and figures to HM Revenue and Customs more frequently than once a year so a cloud-based software system allowing you to do that quickly and efficienctly could be a ‘must’. If, on the other hand,your business transactions are minimal, you may only need to keep a manual cash book.
Sort the finance and cash flow
Make sure you have the cash resources to start trading and that you know what your cash requirements are likely to be for at least the next six months. You’ll need a business bank account and, if additional funding is needed, think about options including a bank loan, grants or crowdfunding.
Make sure potential customers know you are open for business and think about how you are going to build a relationship with them. Useful marketing tools include branding, a website, social media, networking functions, PR, advertising, events and newsletters. Think about what’s most appropriate for your audience and then plan accordingly.
Need to speak to Emma and get more advice? Call 01872 272047 or email firstname.lastname@example.org