Starting a business is something that needs careful planning, especially in challenging economic environments.
Regardless of the economic climate, there are a lot of things to consider before you take the plunge.
Will you make enough money to sustain this as a full-time business?
Why are you running the business? Spotted a gap in the market? Or is it ultimately a hobby which you hope can make you some money?
What competition is out there?
Drawing up a strong Business Plan that outlines your aims and strategies is essential. Also take the time for market research and draw up detailed financial forecasts that cover sales, costs and cash flow.
Because nothing is certain, prepare best- and worst-case scenarios. And regularly update your forecasts as actual data becomes available.
Other things to consider include:
Funding
The biggest challenges for new businesses often include securing funding. Options might include personal savings, family and friends, bank loans, overdrafts, remortgaging property, commercial mortgages or grants.
The team at Saint & Co has great experience of signposting people to grants and funding available, and we can advise on what funds are required to help you achieve your business goals.
It’s important to have a positive mindset. But at the same time, be realistic about what you can afford to repay as you are starting out and how long they can be maintained.
Structure
Choosing the right business structure is also a key decision. Running a business can be much simpler and easier to manage and potentially may be slightly more tax efficient depending upon the size of your business.
On the other hand, limited companies can make raising finance easier. They also offer some protection from business debts and may be preferred by suppliers or lenders.
Partnerships and shared ownership can also provide access to complementary skills and resources. Saint & Co can advise on all these options, after weighing up your goals and your circumstances.
Practical considerations include selecting suitable premises, whether to buy or lease equipment, registering for taxes, and complying with VAT and Making Tax Digital requirements.
Staffing
Businesses employing staff have to manage payroll, National Insurance, workplace pensions and rapidly changing employment laws. Pension obligations apply even if you have only one employee.
Exports
Online trading can help to reduce your overheads and widen your customer reach. But businesses involved in international trade need to consider post-Brexit regulations, border controls and tariffs that might affect competitiveness and supply chains.
Succession planning
Even from the outset, you should consider both short-term survival and long-term exit strategies.
When it comes to selling a business, tax planning is crucial. You must decide whether to sell shares, business assets, or accept arrangements such as earn-outs, shares or loan notes.
Taxes
Tax considerations include VAT treatment, corporation tax, and the potential for double taxation when selling a company’s assets. Don’t worry if this is all overwhelming, the specialists at Saint & Co are here to help.
Professional advice throughout both the start-up and sale process can help business owners avoid costly mistakes and achieve the best outcomes.
Lindsay Farrer, a Partner at Saint & Co, is providing assistance to people starting their own business by hosting a free to attend webinar covering related financial requirements.
Sign up for the webinar here which will take place at 10am on Tuesday, September 22nd.
Get in touch today at advice@saint.co.uk or 01228 534371
