When you’ve got a great idea for setting up your own business, the freedom of being in charge of your own destiny can be very alluring. So, it can occasionally be tempting to throw caution to the wind and get started straight away. But before you make the leap, it’s worth taking a little time out to consider this checklist.
Working 5 to 9
Unless you are fully confident that you can start earning enough to live on from day one, it might make sense to keep your day job on for a while and set up your business on a part time basis. Many new businesses start up this way, often working for a few hours in the evening after work. Of course, this can get exhausting in the longer term and you need to make sure that you do get some proper rest and recuperation. But in the short term, this can be a good solution as it provides a steady income while you’re getting into the swing of your new venture.
Get some help
You may not be able to afford to employ anyone in the early days of your business so that means you can be doing everything on a solo basis. Being in control of everything can be very exciting but it can also become tiring, especially if you are still holding down a day job. Think about whether anyone in the family might be able to help out for a short time just to get you off the ground. Alternatively, it could be worth thinking about outsourcing some of your work to freelancers. This approach means that you can get some much needed help without the hassle of worrying about ongoing wages, pensions and tax. For example, if you need a virtual assistant to take over the running of your office, try www.emoneypenny.co.uk to get a freelancer quickly. This can take some of the administrative burden from you and has the added benefit of providing a professional front to your business.
Holidays and Sickness
The majority of paid jobs come complete with a package of benefits on top of the regular salary. This might include fully paid time off for sickness as well as four weeks of paid holidays. One of the few drawbacks of running your own business is that you need to pay for your own time off. You may decide not to take any time off, but this can result in stress and illness so it may be rather self-defeating. Instead, it is worth planning your target income over ten months instead of twelve. That ensures you can take some time off and it also provides a contingency in case of illness or domestic emergencies.
If you haven’t already done it, sit down and calculate your projected earnings over the coming years. In most cases, your business is not going to be in profit for some time so you need to consider cash flow, particularly in the early days of your business. You could make an appointment to talk to your local bank manager about business loans. Alternatively, you could approach a commercial specialist like abn amro commercial finance who will be able to recommend a range of suitable options for your company. They will also be able to advise on more specialised solutions such as factoring and invoice discounting. These are methods that enable businesses to effectively borrow against current invoices or to sell on unpaid invoices in order to improve cash flow.
Type of Business
Depending on the nature of your prospective company, you need to give some thought to whether you will be self employed as a sole trader or whether you want to set up a limited company. If you think that you may need to employ staff at some point, then it’s most likely that you will need to go down the limited company route. Registering as a limited company will also offer some protection to you in the event of the business not working out. It means that your private property could not be taken to pay off any business creditors. There is some helpful advice at Business Link to help you decide.
This helpful article was provided by Matthew Cayless.