Starting out in Business
Starting up in business can be both exhilarating and daunting at the same time. There are a number of financial and practical issues that you will need to consider before launching yourself into the world of business.
What type of business are you looking to set up?
The first thing you’ll need is a sound business idea, along with a name for your new enterprise. Then you’ll need to decide on what type of company best suits your business idea. For example, will you trade as self-employed, or are you looking to set up a limited company or some other type of venture?
If you can run your business from home, at least at first, all the better, as you’ll save on rental charges. However, for some types of business you will need to consider renting premises and you’ll need to take rental costs into account when you make your business plan.
It may also be a good idea to ask yourself what kind of competition you will face, how is what you offer unique? This doesn’t mean that you’ll need to come up with a ground-breaking or even a new idea, but defining yourself from your competition can increase your odds of success.
Where’s the money?
After the very practical initial considerations outlined above, you will need to get down to the nitty gritty of financing your business venture. You will need to consider:
- Where the money will come from. Will you be using your own capital, taking out a loan or sourcing cash elsewhere? Is there any funding or help that you could apply for to get you started? Outside funding can be a valuable life source for small or start-up companies and businesses.
- Whether you will be taking on employees. Once you become an employer you will be faced with legal obligations towards your employees. What these are may depend on the size and type of business you are planning on running.
- What your tax obligations are. Even if you work from your own home you will be subject to certain taxation rules. You should always find out what these are according to your own individual circumstances and the type of business that you’re running. You will also be required to keep records or your business transactions.
Rules will of course be slightly different according to where you live .
Do I need to make a business plan?
It is always a good idea to make a full business plan, whatever the size of business you’re planning on starting. Taking the time and effort now to make a full practical and financial plan could save you a lot of money in the long run. A business plan will help you to crystallise your objectives in setting up a business and may be very useful when you apply for funding or bank loans for your business.
This post was written by John Hughes who is the resident blogger at www.independentfinancialadvisor.co.uk, a UK based site that provides access to financial advisors as well as to debt advice charities for those struggling with their debts.