Now 2020 has made us aware of the fact that some things are out of our control, we have all had the opportunity to see what is working for us and what simply isn’t.
We have had more time indoors than we could ever have hoped for, and in that time, many people have had the opportunity to dip their toes in projects that they could have never done before. For some, that has been launching their own business.
According to Companies House data, an additional 59,358 new companies were created between June 2020 and August 2020, compared with the same period in 2019.
If you are thinking about starting your own company and ready to take on the challenge, here are some tips on how to make your business dreams into reality. The world is your oyster.
The “perfect” idea
Before anything else, coming up with that perfect business idea is probably one of the hardest tasks. But there is no such thing as a “perfect” idea.
There’s always the chance that problems will come up and force you to make changes to your product or services – just as the pandemic has done over the past year – so we’d always advise leaving some room for flexibility.
Of course, don’t go changing up the whole thing too often, but tweaking some aspects of it may be the reason your brand flourishes or just flops.
However, every time you do tweak your idea, make sure to update your business plan with it.
A business plan is probably one of the most important documents you need when starting a new business.
It will be the backbone of your business, stating how you plan to start, grow and develop your brand. A business plan is essentially designed to steer your business over time, so think of it as a sort of GPS.
Most business plans include SMART objectives, long-term goals and competitor analysis. But however you structure it, a good business plan should include clear and concise aims, so it is easy for anyone in the business to pick up and understand.
Working out how much you can afford to invest in your business should be one of the first things you consider. Your budget should include everything from employee costs to marketing budget and equipment.
Usually, office expenses would be included, but as many of us have recently learnt, you might not need physical premises if you can work remotely.
By working out your budget, it is easier to establish if you have enough to get started right away or if it is better to save up and wait a little longer, or look for extra sources of finance.
Building a brand
From logos, fonts, and colours to tone of voice, branding is a key component of any business. It helps your audience understand and identify your business.
The time you spend developing your brand will affect the way your business is perceived by your target audience.
You may wish to hire a graphic designer or branding professional to help you work on this, which may even strengthen your chances of success against your competitors.
Registering your business
If you are ready to set up your limited company, you will need to register with Companies House.
The UK Government has also released guidance regarding business names.
Learn to love taxes
Taxes. As time-consuming as they are, being tax-efficient can actually help strengthen your cashflow and improve your business in the long run.
You just need to make sure you understand which taxes you need to pay, depending on your business structure.
For example, if you are a sole trader or within a partnership, you will mainly need to pay income tax based on the profit your business made in the financial year.
However, if your new business is a limited company, your company is required to pay corporation tax on any profits it makes, as a separate legal entity from yourself.
Other taxes your business may need to pay include:
- Business rates (although some small businesses are able to apply for relief)
- Employer’s National Insurance contributions
Managing taxes can be a confusing process, and if you haven’t spoken to an advisor, you might end up paying more tax than needed.
One smaller expenditure to remember is the cost of registering your business.
This starts from £12, depending on which method you choose. Usually, if you register online, your company will be registered within 24 hours.
Overall, the most important thing to remember is that preparation is key when starting your business, no matter how big or small.
At James Scott, we can ensure you are prepared when starting your dream business. Speak to us about any business-related queries you may have.