Setting up a business requires a great deal of thought, but it offers a great opportunity if you have been thinking about new beginnings. And if your dream is to create a better work-life balance, the stark realisation that you only DO have one life – so making it count could be at the top of your to-do list.
Is now the time for you to consider becoming your own boss?
If you are seriously thinking about setting up your own business, here are some things you need to think about as part of your journey.
Going it alone (at least to start with) can be both exhilarating and challenging.
It requires a great deal of attention and, to be fair, loads of energy. Got a fantastic problem-solving idea? One that will appeal to your target market and return a profit? Or at least earn you enough money to pay your mortgage and your bills?
Now’s the time to marshal your thinking into some defined steps to keep you on track. Allow WHA to walk you through some basics. To be fair, this blog can only touch on the headlines, so do get in touch if you would like some more in-depth advice.
Make a plan
If you’re serious about your future success, you must create a business plan. Why?
Because a properly structured, measurable plan will help you to frame your ideas, work out your pricing model, project your income, plan your marketing, work out who your competitors are – in short, everything that will help you to keep focused and motivated. As a matter of fact, once you have documented everything, ideally, you’ll keep referring to it.
You may even amend your strategy to react to the real-world response to your business.
If you’re looking to secure finance, potential lenders will want to see your business plan. And, getting serious attention from a bank or an investor isn’t always easy, so think very carefully and realistically. The financial section of your business plan needs to include a sales forecast, your expenses budget, a cashflow projection and a profit and loss statement over 1, 3 and 5 years.
Top tip: WHA can help you here. Also, there are plenty of business plan templates just a click away on Google.
Let’s talk money a little more:
How much working capital do you need when setting up a business?
You will almost certainly have to make some upfront investments before any money comes in.
In our experience, would-be entrepreneurs often underestimate how much capital they need. You simply cannot do it on fresh air. Where WHA can help is by guiding you through the process with our knowledge and experience.
Open a business bank account
Having a business bank account will enable you to separate your company finances from your everyday money management. Plus, you will be able to set aside a proportion of your revenue for the tax man; you’ll also be able to use your business debit card for expenses relating to your work, which makes record keeping easier.
Be aware: opening a bank account isn’t as straightforward as it used to be. It may take longer than you think. During the pandemic, banks have been reluctant to take on new customers, although we’ve been aware that this situation has been easing off recently.
What is your legal structure?
Are you a sole trader, or would setting up a limited company work better for you?
In part, this will depend on your level of profitability. WHA can work with you to understand the mechanics and the best structure that will work for you.
If you’re not sure, we’d be happy to advise.
Think about insurance
Another big subject.
If you’re a sole trader or a company that provides advice, recommendations, designs, or instructions (and so on), professional indemnity insurance could protect you in the case of a claim.
Public liability insurance will help to protect your business if a claim is made against you – for example, if something happens that results in an injury to a customer, or there’s damage to property. The clue is in the name: if you interact with the public in any way, this type of cover could be the best choice.
Thinking about taking on staff?
Becoming your own boss, and then the boss of other people can be daunting. However, in our view, if you want to grow then you’ll need to delegate some important tasks to people who may be better at doing a particular task than you are.
For this to happen, you’ll need to make your workplace safe for your employees, take out Employer’s Liability Insurance and register for PAYE, and setting up a workplace pension.
Marketing: You DO have a website, don’t you?
Your business will benefit from a website – without a doubt. A good online presence legitimises you as a business and creates confidence and trust in the mind of your
future clients. And it is open 24 hours a day, 7 days a week.
How much you’re willing to pay depends on your budget, and to be fair, how much research you’re prepared to do to find the right website designer. We work with marketing specialists, and we would be happy to refer their expertise to you.
How much money do you need to live on when setting up a business?
Creating financial projections for a brand-new company is a bit of an art. A science, even. Be as sensible as you can here. You may have a budget in mind, but it may not be enough if you encounter unexpected domestic crises, such as a broken boiler or you need to replace your car.
By the same token, you will also need to consider how much business revenue will be reinvested into your enterprise.
There IS advice out there
Do not be put off. You do not have to do all this by yourself, you know. Business mentors and coaches who specialise in helping start-ups are out there, waiting to help you.
As Chartered Accountants and business advisers, the team here at Warren House is so much more than an accountancy practice.
We work closely with our clients to develop a full picture of what their future will look like. We would love to hear about your business ideas and how we can best support you. In fact, your first year’s fees with us include ongoing advice to help you and your fledgling business grow and fly the nest.
Contact us here or give us a call on 01444 716946. We’re looking forward to working with you.