By Anita Brook FCCA, Managing Director At Accounts Assist
One of the biggest challenges when setting up your own business is knowing about finances and keeping track of your accounts. Anita Brook FCCA, managing director at Accounts Assist and serial entrepreneur, shares her top tips to make sure you are on the right path for growth.
1) Have you got enough funds (plus a little bit extra saved in case of emergency)?
Never underestimate the amount of cash you need. Starting a business can be expensive, so make sure that you’ve accounted for all feasible expenditure for your first few months of trading.
You will need to budget too. This is the most effective way of managing cashflow Remember its important to be realistic and have a contingency fund.
2) Have you got time?
Starting your own business can also be hugely time consuming. To be successful, you’re likely to need more than just funds – you’ll also need the support of those around you, free time to put into making it work (are you going to have a ‘day job’ too?), and a good dollop of self-belief.
3) Do you have a business plan?
Typically a business plan should include: an initial executive summary which would summarise your business proposal; a short description of the business opportunity which details your proposed marketing and sales strategy; your management team and personnel; your operations; and financial forecasts.
4) Are you aware of all of the Health and Safety and Insurance regulations for your industry?
Different industries carry different Health and Safety and Insurance regulations, so make sure you’re familiar with yours and that you have all the right documents and policies in place.
5) Have you opened a bank account for your business?
I strongly recommend that you set up a separate business bank account. This will help you to keep your business and personal affairs separate, and help you to identify relevant income and expenditure. It also will allow your accountant or bookkeeper to confirm all the transactions in the bank account.
6) Do you have a licence?
Some businesses will require a licence from the local council to operate. This includes the likes of taxi firms, window cleaners, driving instructors and restaurants. Visit your local council’s website to find out more.
7) Have you arranged an accountant, bookkeeper, or record keeping system?
Whether you intend to keep your own books, or pay someone else to do it, it’s important that you keep clear records from day one. Think about how you are going to record your receipts, how you will invoice, and decide on a sensible system for keeping track of any other dealings your business has.
If you are thinking about hiring an accountant; look for one who is officially recognised – look for the words ‘chartered’ or ‘certified’ in the title.
Once you’ve chosen one, meet with them and stage a planning meeting. Here you can discuss your requirements in depth and what their plan will be. This way you can see how well you will work together.
8) Have you registered with HMRC?
When setting up your own company or going self-employed, you need to register with HMRC as it will affect your tax and National Insurance contributions.
Registration is simple and can easily be done at www.hmrc.gov.uk or over the phone. You will also need to register for Class 2 National Insurance at the same time.
9) Have you registered with Companies House?
If you plan to trade as a Limited Company, you need to register with Companies House. You can register online or get your accountant to do it.
You’ll need to know your Company Name and Address, Officer Details (Director and Secretary), Share Capital and Shareholder Details, and make a registration payment.
10) Do you need marketing materials?
You may not want to splash out on leaflets and ads from day one, but the vast majority of businesses have websites to outline what they do and showcase their services/products. Business cards may be another essential, especially if you intend to network to win business.
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