Setting up a business
Setting up a business can be daunting. Here, however, are 5 top tips from accountancy firm owner, Nicky who runs Worthwhile Accountancy.
Most importantly, Nicky has specific expertise in accountancy but also runs her own business too. As a result, she understands all perspectives to consider when setting up a business…
Where to start for setting up a business
Nicky has set up companies for many people. Likewise, in many different sectors. She finds that many would-be business owners have an idea of what to do. Nevertheless, because it is a new challenge, they are not always sure what to do first. Therefore, she breaks the process down with these tips…
Setting up a business plan – tip 1
Above all, the best start point is to make a business plan.
A business plan helps you to achieve the following:
- Firstly, clearly define your business idea.
- Secondly, detect potential challenges you might face.
- Thirdly, set out your business objectives and targets.
- Finally, understand how to measure your progress.
This last point is particularly important because, above all, you want your business to grow. Therefore, you need to be able to track your progress.
In addition, it’s crucial to make a projected profit and loss, balance sheet and cash flow plan.
Nicky and her team can provide specific pointers here as these three elements are often misunderstood, but fundamental when working out the financing of your business. Therefore, please feel welcome to call for an initial chat (at no cost).
Furthermore, if you’re struggling to write your business plan then see the further help section (below).
Setting up a business – tip 2
Next, it is important to understand which legal entity is most suitable for your business. Are you a sole trader? On the other hand, a partnership? Do you need to be a limited company?
In short, there is no general way of answering this. That is to say, there is no ‘one size fits all’ approach. Above all, therefore, which legal entity is best for your business depends on your specific circumstances. Furthermore, there are a number of factors to consider…
- Firstly, for example, if you intend to employ people.
- Secondly, for instance, if you work from home or intend to have premises.
General advice about different types of legal entities is available on the government website. (Details in the further help section below.)
Nevertheless, if you are still not clear then seek further advice. Most importantly, feel welcome to call the Worthwhile team – we are always happy to help.
Setting up a business – tip 3
Most importantly, inform HMRC. In other words, once you know which legal entity your business needs to be, you must register it with HMRC.
How you register with HMRC depends on what type of business you are setting up. Nevertheless, it is very important to reach out to them as soon as you can. If you have trouble reaching HMRC by phone, then there are forms available online.
Remember, here at Worthwhile, we can deal with HMRC on your behalf once you become a client. Worthwhile Accountancy is an approved HMRC agent and in regular contact with HMRC.
Setting up a business – tip 4
It may seem an obvious next step but get the bank set up. Above all, your business exists to earn and receive money. Likewise, you may need to pay suppliers. As a result, it is so important to have the right type of bank account to best do this.
Furthermore, remember this process can take time. So, you don’t want this stage to hold up your business. Consequently, aim to get this set up in advance of starting trading.
Common pitfalls are easily avoided but it is important to think through how your business bank account is set up. So, perhaps, for instance, some clients know you by your own name. So, for example, they expect to pay “Mr Smith”. Meanwhile others, however, might be familiar with your business name “Smiths Electricians”. They may write a cheque out to the business name instead. Therefore, it could save you a headache to be able to receive payments made to either name.
In addition, if you are setting up a limited company, the business bank account will need to have the same name. Worthwhile can help you with this and the required documentation, such as Certificate of Incorporation. As a sole trader, a separate business account is not required but we always suggest using a different account to your normal current account, for clarity and convenience.
Above all, explore the options with your bank.
Setting up a business – tip 5
Your business cannot operate without keeping records. The importance of this cannot be over-stated because this underpins your accounting. Therefore, consider carefully the best methods for record keeping.
Almost all businesses that we support at Worthwhile Accountancy, have, at times, found recording-keeping challenging. Often, this has actually been a driving factor for them to seek our help.
Most importantly, we are always able to help. In other words, we use our expertise and experience to make record-keeping as easy as possible. In addition, we can provide as much or as little support as possible. Furthermore, we scale our support as you need. As a result, a number of our clients started with us a one-man band and now employ teams of people. The scope of our support means we can help every step of the way…
Record keeping is a detailed area. In short, however, here are some basic record keeping pointers:
- Firstly, maintain records of every payment.
- Secondly, keep track of expenses.
- Thirdly, file bank statements and invoices in order.
- In addition, keep on top of deadlines.
- Finally, choose suitable software to help.
Most importantly, know when to ask for help. As your business grows, outsourcing your book keeping might be the best choice. Consequently, you have more time to focus on your own role in the business.
Further help for setting up a business
Most importantly, reach out to the Worthwhile Accountancy team who are happy to have an initial chat for no cost. Likewise, they can provide pointers on all of the issues covered here.
Call 07507 751400. Alternatively visit our website at https://www.worthwhileaccountancy.co.uk/
Writing the business plan
Firstly, the government offers advice for making a business plan. This includes providing template business plans.
Secondly, The Prince’s Trust offers business plan tools.
Which legal entity for your business / informing HMRC
General advice from the government:
Help and advice
The Federation of Small Businesses