If you are looking into how to start a small business this article is designed to give you some pointers of what you should be looking at in the Start-up stage of a business – at this stage in the life cycle of a business the considerations and planning needed fall into the following categories:
– Decide on whether to should I buy a business or set up a business from scratch or even buy a franchise business. There are relative merits of each route, as discuss in the article link here. A franchise is a good route to take where you are seeking banking finance, as banks like franchises.
– Decide on a name for the business – if you are starting from scratch, you must then consider protecting your name and of course your idea if it is an invention by using the patent protection process. Be very careful with this, as you cannot protect an invention via a patent if the idea is within the “Public Domain”, so don’t go telling people down the pub about your idea until it has been protected, this that would be deemed in the public domain.
– Decide on business bankers – I always suggest that you begin this with meeting up with your personal bankers, as you have a track record with them, which can help in the process here. However, always check around for the best deals on free banking for new businesses.
– Start-up finance required and do your business plans and cash flow forecasts. Whether or not you are looking for start-up finance you should prepare business plans for your business together with some cash flow forecasts. However, if you are looking to seek finance from a bank then a well written business plan is important which must be accompanied by properly prepared cash flow forecasts.
– Choose your business location – depending upon the type of business you are setting up the location may or may not be crucial or you may even be able to start it from your living room at home. However, if you are going into retail the location is one of the most critical decisions you make to get the necessary foot-fall.
– Decide upon a business structure – there are various trading structures for a business ranging from a sole trader to a limited company and the best route to take is discussed in types of businesses and setting up in business.
– Equipment for the business – even the smallest of small businesses requires some equipment and you need to decide how you buy or lease this. If you are looking at some major capital acquisitions you might need to lease or finance these to help with business cash flow. There are tax implications with how you acquire assets and you might want to take these into consideration, but never let the tax tail wag the commercial dog – in other words make your decisions based upon the commerciality of the idea and not the tax implication, but consider it within the overall commerciality of what you are doing. For example, governments sometimes encourage business to buy assets by giving away what is called first year allowances of up to 100% of the capital cost. This means that you would get 100% tax relief in this example for the purchase, whereas if you lease the item you would only get tax relief on the lease payments paid in the year.
– Get Licenses and Permits – certain businesses require licences and some need to have a permit before trading commences. For example if you are about to set up a pub or restaurant with a drinks licence (or buy one) then you will need to obtain a drinks licence.
– You might want to find a Mentor – A business mentor is invaluable and to have someone as a sounding board is a great asset to have. Never under-estimate the learning curve when first starting out on the “Going into business route” and to have someone to talk to is always a bonus. I used to spend many hours talking with my clients in my accounting practice about business “Problems” and how best to expand or how to finance assets or whether to move premises etc. Running a business on your own can be a lonely experience, so any support you can get from fellow businesses owners should be taken up.