Starting a new business venture
Starting a new business venture always carries an element of risk, regardless of the economic conditions. Of course, there are many factors to consider, including: the nature of the business; your unique selling points,your target market and competitors; the potential for profit; how you will extract those profits; how fast the business will grow; how the business will impact on your life; the potential risks involved; and how you plan to exit the business when the time comes.
Business plan: A comprehensive business plan is essential. It should include a marketing strategy; Why should customers buy from you? Who are your target market? How do you reach your target market? It should also include financials: your sources of funding; tax-efficient borrowings; whether the business needs a PAYE scheme and/or to be VAT registered; and, not least, the business structure that will best meet your needs (sole owner, partnership, limited liability partnership or limited company). We can help you through the decision-making process – and to make the appropriate decisions. A good cash flow forecast can help you spot potential times when cash will be short, and regular updates will help you to determine how your business is performing.
Business structure: You will need to decide which business structure best suits your needs. There are both advantages and disadvantages for each trading structure and each has implications for control, perception, support, and costs. For example, careful consideration is needed regarding whether or not to retain personal ownership of any freehold property on an incorporation of business.
HMRC registration: Informing HMRC when you become self-employed, and probably liable to Class 2 national insurance contributions (NICs), may not be very high on your list of priorities in the first weeks and months of a new business. However, failure to notify will attract a penalty if tax or NICs are unpaid as a result. We recommend that you register as soon as possible to begin paying NICs and notify HMRC of your new self-employed status.
