A mini guide to starting your own business
With the UK suffering from high levels of unemployment, traditional trading partners being forced to cut spending, and access to credit increasingly hard to come by, businesses in the UK are negotiating their way through some of the toughest trading conditions in living memory.
However, with recession comes opportunity, and the UK is certainly an entrepreneurial nation, with tens of thousands of individuals setting up your their own businesses among the economic turmoil each year.
The following graphic displays some of the key points to consider when setting up a business, as well as looking at vital character traits that might make you the perfect person to build a successful company from the ground, up.
A Mini Guide to Starting your own business
Ever thought about starting your own business? Right now there has never been a better time. 2011/12 marked a record high for
new businesses with over 450,000 people setting up a company and becoming their own boss. Below is an mini introduction into
some of the basics you need to consider when you are thinking about starting a business.
SMALL BUSINESSES AND THE UK
- 4.5 million Small Business in the UK
- 450,000 Small Businesses in the UK set up in 2011/12
WHY SET UP YOUR OWN BUSINESS?
1. Be your own boss
No one will tell you what to do! Benefit from all the freedom to move in different directions and take your own approach to projects.
2. Use your ideas
Use your particular talent or skill to implement your own business ideas and practices.
3. Earn more money
You put a price on the value of your work and generate your own income and profits.
4. Tax Benefits
Being self-employed allows you all sorts of benefits from the tax man.
5. Work from Home
Roll out of bed at 8.55am and be in your office for a 9.00am start! Working from home can be a cheap way to get started.
Free yourself from the stresses of the conventional workplace.
7. Low Start up costs
Technology and social media make it simple to set up a business from as little as £100!
8. Choose your own team
Pick and choose your own work colleagues who can develop your business. Shape the team you have always wanted.
HAVE YOU GOT WHAT IT TAKES
If you answered YES to all the questions then you have the right personality traits to be
1. Are you a risk taker?
No business is risk free, so you need to judge the level of risk and be prepared to live with the consequences.
2. Is change a challenge?
Can you minimise its downsides with careful thought and planning?
3. Are you hard working?
Being self-employed is not an easy option, especially if you are working on your own. Results are often only produced by working long hours.
4. Are you organised?
You will need to be an excellent time manager. You will need to juggle tasks, meet deadlines and prioritise conflicting demands.
5. Can you network?
It is essential to be able to market yourself and your business in social situations. A lot of business is made by networking.
6. Are you commiteed?
Do you believe in yourself and your business idea? Doubts or a half-hearted approach can be disastrous.
7. Do you plan ahead?
You need to do this to minimise uncertainties and maximise your chances of success. Good planning ensures work keeps coming in.
8. Are you a realist?
Can you gauge in practical terms what is possible to achieve or produce within a certain period?
WHAT YOU NEED TO START YOUR OWN BUSINESS
A great business idea
This is the root any business. Does your business have a skill or idea to sell and is there market for your business?
Register your name and check it doesn’t already exist at companieshouse.gov.uk
Will you work from home, contract out or hire your own premises?
Register as Self Employed
When you start working on your own you have a few months to register as self-employed for tax and National Insurance (NI) purposes. You need to call
your local tax office to let them know. You will be given a reference number and be invoiced for NI contributions each quarter.
A written Business Plan
A business plan is the cornerstone on which everything else is built. You will need one to obtain funding. It should include: an introduction,
overview of your product/business, objectives, a marketing plan, sales forecast, operating plan, budget, cash flow and milestones.
Cash Flow Management
Running your own business means there is no certainty and monthly outgoings may exceed what comes in. It is important to ensure that you
are on top of money coming in and out of the business so you have enough cash to operate. Keeping accurate records and accounts is vital
as it provides evidence from which HM Revenue & Customs (HMRC) decide your tax bill. You must also complete annual self assesment tax returns.
If you supply goods and services that are valued above the annual threshold of over £60,000 you must register for Value Added Tax (VAT)
and pay throughout the year at fixed intervals.
Phoneline, IT, Website & Internet Connection
You will need an up-to-date computer and dependable internet connection. There are providers who specialise in
providing these services for small business e.g. www.xlntelecom.co.uk.
If you re paying anyone for the work they do, then it’s up to you to ensure that their tax
and National Insurance obligations are met. Check with HMRC www.hmrc.gov.uk before setting up a payroll system.