It may feel like a scary time to start a business, and not just because it is Halloween. The impact of the Covid-19 pandemic and ensuing economic crisis has hardly made for an ideal trading environment. However, with many successful companies having been borne out of times of economic hardship, Paul Garrod, Owner and Director of chartered accountancy firm, Garrod Beckett & Company, believes now may be the ideal time to cash in on the big idea and shares his top tips to help start a business.
It might feel like a scary time to start a business. But some of the World’s most innovative and successful businesses have risen out of economic meltdowns - take Microsoft, Airbnb, Uber and Disney to name a few.
Perhaps you’ve had an idea bubbling away for a while. Maybe you’ve spotted a need in response to lockdown, or you might feel ready for a complete change of direction. Whatever the reason, it could be exactly the right moment to get your business up and running.
In the spirit of Halloween, we’ve put together our top five tricks [and treats] for start-up success:
‘Soul’ trader: The way you set up your business has an impact on how it operates, VAT and tax implications, and the potential risk to personal assets. Different options, such as a Limited Company, Partnership, Limited Liability Partnership and Sole Trader, have advantages and disadvantages, so get advice on the best structure for your business.
Witchful thinking: Great ideas are the starting point for any new business, but you need a business plan if you’re going to make it work financially. It doesn’t have to be long or complicated, but it needs to set out what your business is, the market in which it operates, what you plan to do and how you plan to do it. In a tough financial market, a sound business plan is essential if you want to attract funding or investment.
Creep it real: Choosing a business name and getting a logo designed are the fun bits. But preparing a budget is fundamental to your business plan and is key to managing the ongoing health of your business. You won’t have exact figures when you’re starting out, but map out your predicted income and expenditure over the months ahead to see if you can turn your idea into reality.
The lifeblood of your business: We go on about this, but cashflow is the most important thing to monitor in your business. It’s one of the key reasons why 50 per cent of businesses don’t make it to five years. You can be making a profit, but if you don’t have the right balance of cash in the right place at the right time to pay your bills, you’ll quickly run into trouble.
Avoid a pain in the neck: Keep on top of your business expenses from the outset and you’ll save huge amounts of hassle further down the line. A separate business account makes this much easier to manage, alongside a bookkeeping record of your expenditure. There’s a growing number of online accountancy software options which are easy to use and a great way to capture your incomings and outgoings. We find this works brilliantly with clients, as we have ‘real time’ information that helps us provide the right support and advice.
Setting up a business at any time is hard work. But if you get the fundamentals in place, you’re much more likely to avoid frightful mistakes and make a smashing success of it.
Readers can take a look at Garrod Beckett & Company’s Business Growth Guide for more information, or telephone 0208 5912391 to arrange a ‘Fresh Start’ consultation.
This article originates from the Garrod Beckett & Company business blog.
Photo by Andy Holmes on Unsplash
