When you start a business there are foundations you need to put in place to not only ensure the business can grow, business stability, but also that you are legal!
There are 6 core areas to running a business and each area of course has many layers that you have to consider:
Not every area you will need straight away but some you do:
You need to understand why you are starting this business, what your end goal is, the best way to do this is a business plan. A business plan will also allow you to ensure that you have done the research needed to ensure a successful business from marketing to competitors, to understanding your own weaknesses and strengths to cashflow forecasting.
Of course the most obvious section you must complete before you start a business is the legal side:-
Structure – what are you going to be – limited / sole trader / partnership?
Terms & Conditions – have you got some? if not how do you protect your business and ensure when you have supplied your product or service that you will get paid?
GDPR / Protection – ensuring you protect your business from being copied and that you understand GDPR / Data Protection rules
Insurance – What insurance do you need? Have you got this in place before you start – its there to protect you!
Register with HMRC & Companies House – Depending on how you will structure your business depends on who you need to register with. The first is yourself with HMRC – this will be either self-assessment (as a sole trader). A Partnership or as a Director.
If you are going to trade as a limited company – you will need to purchase this correctly which will register it with Companies House and HMRC for the corporate tax.
Often the area of running a business people hate the most and the first they outsource. But remember, even if you use the skills of an accountant, ultimately you are the owner and it is your responsibility to report to the relevant authorities when required in the format expected and to understand the numbers of your business.
Banking – is another area you need to have sorted before you start. Especially if you are going to trade as a limited company as you must have a limited company bank account. A sole trader it is easier as you can just you a normal account – but it should be separate from your personal account.
Bookkeeping – how are you going to record your income and expenses? Having an efficient method is paramount – especially if this is not your area of expertise, as you don’t want to come unstuck with your numbers. Keep it simple – don’t make it more complicated than it needs to be and remember you would not ask your milkman to fix your car – maybe this is an area you outsource to an expert to ensure it is done correctly!