starting a new business

Every year, thousands of people decide to set up their own business. Here are some of the practical points which require consideration before trading begins:

Selecting a legal entity

The entity you choose will impact on the way you are protected by law, and affected by taxation rules and regulations. The 4 main entities are:

• sole trader
• partnership
• limited company
• limited liability partnerships

Registering with the Tax Authorities

Every business must comply with tax and information filing requirements and failing to do so may result in problems and penalties.

Inland Revenue:
All businesses must notify them of their existence within 3 months of commencement of business.

H M Customs and Excise:
Businesses will need to register for VAT purposes if taxable supplies exceed the registration limit.

Payroll Taxes:
If you are going to have employees then you will have to run a Pay As You Earn scheme. Every employee will also require an employment contract.

Financing For Your Business

In most cases you will need to obtain outside capital for the initial expenses of your business.

In order to determine your capital requirements, a business plan will need to be formulated including estimates of future sales, expenses, cash flows etc. As well as aiding the development of your own business, a potential lender will want to know these details to understand your proposal and see how you plan to utilise the money.

Your new venture may be eligible to receive a grant. There are many different schemes in operation by various awarding bodies.

Insurance

You must insure against risks that could have a detrimental impact on your business. The only mandatory insurance is public and employers liability, but there may be others relevant to you.

Accounting and Bookkeeping

Good, well-organised financial records are a necessity for any business as they will be the basis for the financial statements on which many decisions will be made by yourself as well as outside entities such as potential lenders and trade creditors.

Bookkeeping could be done manually or by using a computerised accounting package. Appropriate training and guidance can be provided to ensure you have the most effective system for your business

If you are interested in arranging a FREE initial consultation to find out how we can help you in any of these areas, please see the contact details for our offices or call Andy Neeve on 01768 863651 or email him at andyneeve@o-reilly.co.uk.