YOUR VITAL CHECKLIST FOR SETTING UP A BUSINESS

So you’ve made the decision to go it alone, break out, and set up your own business. That long held dream that you have been nurturing for so long to be your own boss is finally coming to fruition and you’re ready to take the plunge.

Suddenly you’re faced with a load of questions which could leave you feeling overwhelmed and frozen in the face of indecision. So let us help you move forward step by step by guiding you through those first few decisions you need to make.

Can you afford to?

Or maybe the question should be, can you afford not to? The reality is that you will still have to live – pay the mortgage, cover the bills, feed your family. Setting up your own business does not mean that you immediately start making pots of money – in fact the constraints on your pocket will tighten quite considerably until you start to build up a reliable clientele.

Don’t be in a rush to leave your job. As long as your employment contract doesn’t prohibit it, try and run the two in tandem initially, until you have built up enough income to cover your living expenses as well as the new business expenses. This may be a burden on you time wise, but it will relieve some of the financial stress and strain that going it alone can generate.

Outsource the boring bits

There are some elements to running your own business that you should leave to the experts, because doing it yourself will take up your time and energy, and you’ll never be an expert. Bookkeeping services is one of those that can be easily, and cost effectively, outsourced to an external agency. This frees up your time, and more importantly creative energy to focus on what you do best, which will be the focus of building your business and becoming financially independent.

What is the best business structure?

There are four common legal structures that you need to adopt when setting up your own business – these are a sole trader, a partnership, a limited liability partnership, and a limited company. Each has different rules and regulations with regards to liability and tax implications depending on your earnings. 

An accountant will be best placed to advise you on which structure would suit you best and why.

Carry out a SWOT analysis

We are assuming that you know what your business will be doing, and that your primary function in that business is something that you are capable of professionally. But how well have you assessed the marketplace? Have you investigated it in depth, or are you just so passionate about what you do you just believe it will work anyway?

A SWOT analysis forces you to confront all that is good and bad about your potential marketplace. It’s an acronym for Strengths, Weaknesses, Opportunities and Threats, and provides a framework for you to evaluate your competitive position and develop strategic planning based on your findings.

Essentially, the opportunities and threats that your business faces are external factors over which you have no control. You need to be brutally honest about these factors – it’s all too easy to overlook something that concerns you, or that doesn’t fit the narrative that you would rather see. This is not about putting you off starting your business – rather it is a crucial element to place all the facts, good and bad, on your plate so that you can work on the internal factors – the strengths and weaknesses – to mitigate these.

Forewarned is forearmed – don’t be afraid of confronting uncomfortable truths about setting up your business. The earlier you overcome them, the more chance you have of building some solid foundations for future growth.