This is a guest post.
Setting up your own business, earning your own income and creating a new life for yourself all sounds great, doesn’t it? But in these tough economic times, it isn’t the easiest thing to do; so it’s important to be serious and have a plan. The first step is to educate yourself on what is required, before you can even get started.
1. Have a plan
Writing a business plan may sound like a needless task when no one will see it but you. However, just doing this will help you map out where you intend to go, with key milestones, supported by information on how you’ll achieve this. This will help you calculate all your costs, create an annual budget and give you a stable base on which to build your new business.
At this stage you need to think about the business savings account you’re going to open for those all important funds. Choosing to set up a business account allows you to choose from a variety of fixed rate and flexible access business savings accounts to match your personal requirements.
2. Small business insurance is a must
You should never go into business without first making sure you’re properly insured. Small business insurance is suitable for all types of mini and micro businesses, whether it’s a home business, sole trader or partnership. You must become well versed in what insurance you need and get it in place before you start.
3. Inform the Inland Revenue
For tax purposes you must inform the Inland Revenue within three months of forming your own business.
4. Remember the Data Protection Act
If you intend to hold data about customers or prospects, you must register with the Information Commissioner in order to not fall foul of the Data Protection Act. This is easy to do and only costs £35.
5. How you’ll structure your business
There are various ways to structure your business – sole trader, partnership, limited liability partnership (LLP), limited company, PLC. Sole trader is the most common for a small business, but you must decide which is most appropriate for you.
6. National Insurance Contributions
You must check how much you’ll be required to pay for National Insurance contributions.
7. How you’ll market it
Many great business ideas never see the light of day due to poor marketing. You must decide which kind of marketing you’ll need – a web presence, direct mail, employing direct sales people. This should form a vital piece of your business plan.
8. Be aware of any regulations
Many small businesses involve selling online. This is termed ‘distance selling’ and is covered by the Distance Selling Regulations. It is essential you are familiar with this, if you choose to trade online.
9. Get your terms and conditions in place
If you are providing a service or goods to your customers it’s very important to have terms and conditions of sale in place – acting as the contract between you and the customer.
10. Have a contingency fund in place
Cash flow is integral to any new business, so you should never spend all the money you make. Always try and keep a contingency fund in place, set up a business account as you should always expect the unexpected; like an opportunity for cheap advertising, or for quarterly tax returns or needing to replace an important piece of equipment.