The most important factors to consider when you are launching your own business.
There’s rarely ever been a better time for people in the UK to look at starting their own business. With the spread of online content and business, and the accessibility this presents, it’s easier than ever before to reach customers and sell your vision to them, while the continued slow but steady growth of the economy in the last couple of years has left the UK in a position where there’s greater potential for businesses to succeed and grow than there has been at any time in the past decade.
Smaller businesses and start-up companies are the heart and soul of British business, representing 99 per cent of all firms in the country, according to the FSB, and accounting for 60 per cent (or more than 15 million) of all private sector jobs. The success of the SME in recent years has meant more people taking the initiative and giving themselves the chance to succeed on their own.
However, before taking this big step, there are a number of factors that any business person in waiting should be considering, both financially and legally. These can help shape the business, and can often be the difference between success and failure, so having an expert solicitor with the requisite knowledge to advise on such issues can give new businesses the very best start, and the highest possible chance of succeeding in the long run.
Funding and finance
Perhaps one of the most daunting and challenging aspects of any new business will be the funding and finance. Finances are often very tight when a new business is started, so raising funds to be able to operate to the full potential of the business is one of the most important aspects.
Whether it’s family and friends helping out in the initial stages, a business loan through a bank or pitching to investors, a solicitor can help start-ups not only work out what the best strategy for their own funding is, everyone is different after all, but also how to go about putting together business plans, pitches and documentation that helps to secure the money needed to grow and expand.
Of course, it’s not all just about how businesses get the funds to operate; managing finances is just as important, which is why you need the right business bank account. Business accounts can vary greatly, so it is important to research on what perks and features to look out for.
Another challenge that any new business will face will centre around contracts. Chances are, most people who are launching a new business for the first time will never have dealt directly with suppliers and contractors in the past, and getting involved with this side of things as a decision maker can be a daunting prospect.
No matter the type of business you are planning to launch, you will need to deal with other businesses in some capacity, whether you are buying in raw materials, products or simply services that your business does not provide on its own. When forging these sorts of business relationships, there so many aspects to handle, such as pricing, goals, agreements and expectations, that it can be hard to keep track of it all. To that end, it’s easy for things to fall through, things to get forgotten or lost, or relationships to break down.
For this reason, it’s important to have watertight agreements in place, especially for small start-up firms that could easily find themselves in financial trouble if contracts and agreements are not adhered to. Having someone with vast experience and a specialism in business law can be key in this regard, making sure that contracts, terms and conditions are legally binding and look after the best interests of the business.
Limited company or sole trader?
Another decision that needs to be made early on in the process of setting up as a business is how you want to operate. Will you be a sole trader or a limited company? There are, of course, benefits to both, but for those without the knowledge of what each offers, it can be a confusing decision making process.
For example, the two pay taxes in very different ways. A sole trader will pay Class 2 & 4 National Insurance and Income Tax on taxable company profits, whereas limited companies will pay corporation tax on taxable profits, as well as Income Tax and National Insurance for staff members and Income Tax on dividends for shareholders.
Knowing which of these options, as well as a range of other differences, is the right one for you, will be an almost impossible decision to make without advice from an expert, and it’s always advised that such a crucial issue be discussed with a specialist solicitor before a decision is made either way.
An issue many might not consider before they move into business is the legality of their enterprise, and this is an area where a solicitor can advise, especially when it comes to things such as licensing and certification.
For example, even a simple business selling food and drinks to city workers at lunch time can fall foul of the law at times. Legally, anyone who is selling such products needs to obtain the correct licence to do so, and not obtaining the correct documentation and permission before launching the business can lead to problems such as fines, or worse, the business being closed down.
By bringing an experienced and specialist solicitor on board, new businesses can help mitigate against these issues. The solicitor will be able to advise on local and national trading law and restrictions to make sure that the business is legally sound before it ever launches, ensuring that all certification and licensing has been obtained through the right channels and covers the business in the case of any investigation.