Considering a business start up project?
It is the ambition of many people to run their own business. In recent years this dream has become a reality for some; forced on others who have been made redundant; whilst others may decide to start up in business to be more independent and to obtain the full financial reward for their efforts.
Whatever the reason for considering setting up in business, a number of dangers exist.
A major concern must be the risk of business failure, despite considerable time, effort and finance having been put into the venture. Research shows that 4 out of 5 business start ups fail within the first 5 years. Even worse….57% of business start-ups fail in the first 12 months! These are terrible statistics and some of the key reasons for business failure are:
Lack of a documented and/or communicated business vision, so no one understands the long term key objectives
Lack of or poor strategic and business planning giving the business no real critical direction
Poor sales and marketing plan and/or activity, resulting in inadequate sales to meet the business costs and/or give the owners a satisfactory return
Inadequate finance either for capital investment or to fund working capital i.e. stock and debtors less creditors
Cash flow problems as a consequence of lack of attention to cash flow management, with the business running out of cash
Poor business management and weak relationships with employees leading to a demotivated team
Failure to keep up with new technologies and methods meaning competitors gaining competitive advantage
Help you clarify your reasons for going into business and your personal objectives.
Help you prepare a business vision.
Help you decide the most appropriate business entity and complete the necessary formation procedures.
Help you prepare some initial financial forecasts for the year ahead including profit, cash flow and balance sheets, which will assist you in determining whether you need any other financial assistance other than your own resources.
Helping you raise appropriate finance where necessary.
Help you complete the appropriate registrations with the tax authorities.
Helping you decide if you need to register for VAT and, if so, helping you do so.
Helping you register for PAYE and NI and setting up a payroll operation to enable payment of your employees and adherence to legal requirements. We can also provide you with a payroll function - see details of our Payroll Service under 'Compliance Services'.
Help you set up the most appropriate accounting records including, if necessary, helping you chose the most appropriate accounting software. We are certified partners for Sage and Xero accounting software. See our full Cloud Accounting Solutions under 'Compliance Services'. We can even maintain your accounting records for you if you decide that you don't want the hassle of bookkeeping.
Greater chance of success and achieving your personal objectives;
A clearly defined vision for your business and path to follow;
Most appropriate legal entity selected;
All registrations with various tax authorities completed and on time to avoid potential penalties;
Financial forecasts prepared and any finance requirements required are determined at the outset;
Greater chance of obtaining external finance. Banks and others will only invest in a business that is properly planned and managed;
Accounting records properly set up to meet the tax and regulatory requirements.