Getting the right start in your business life
Getting the right start in your business life
For many people, the first meeting that they will have with an accountant is when they are starting up their own business. That is a good time to consider issues such as how to structure the business and how to maximise its tax efficiency.
However, becoming your own boss is certainly not easy, and whilst the hands on side of the business is within the owner’s comfort zone, people can find the financial and management side quite daunting.
Running a successful business is about managing resources to ensure that you are creating and generating enough revenue and profit, that there are sufficient funds to operate and that you have the right people to help you.
Despite the difficulties attached, many people in the UK still aspire to own, or to become a partner, in a business. They may be attracted by the potential flexibility or by financial rewards. Some simply look forward to going to work and not having to answer to anyone else.
Years ago, the accountant was the number cruncher who dared not interfere with the clients business. Today, companies look to good firms of accountants for business advice and solutions much more than simply assisting with preparing statutory accounts and tax returns.
If there was one magical formula to help your new business achieve success then everyone would follow it. However, thinking about some of the following issues may help put you on the right track in the crucial initial phase of your business.
PLAN – don’t dive into business and hope that things will just work out; all good things need a plan. You can obtain a sample business plan from most banks and many good books. Think about what you have to offer, your strengths and weaknesses, who are your competitors, what opportunities are arising in your market place from which you could take advantage, and what might be the problems you face. When you know what you have to offer, plan where you want to be in one, three and five years time and decide how you are going to achieve your goals.
Have a unique selling point (USP). Identify what this is and let your customers know. You should have a product or service that people will want to pay you for, not something that you will be relying on friends and relatives to “give you the business”. USP’s don’t have to be ground breaking, it can be that you offer a more friendly, personal service than your competitors, you may package things differently or you may offer a unique delivery service.
CASH MANAGEMENT – Cash is a resource without which you cannot operate. Plan your cash requirements, make sure that you have sufficient funds to run your business, and spend your money wisely. Prepare a cashflow forecast and explore options about how to finance the business, such as banks, personal loans, invoice discounting etc.
PROFESSIONAL IMAGE – Most people that you will come across will give you more business if you and your operation look and act professionally. It should not make the slightest difference to the product or service that you are offering, but unfortunately looking a mess may put customers off, like it or not!
LISTEN TO OTHERS – select one or a few people who you trust, and talk to them. Sound out your problems and talk through the issues that you are facing. Owning a business can be lonely, but it is most likely that someone has had a similar issue to face before and can help you or just be there to listen to you. Some people have a family member, others have friends in business, an accountant or you can join a networking group. It doesn’t matter who you choose, but don’t do it alone.
With all the positive steps, you will still need to rely on a bit of luck, or Divine intervention. Good plans can fail, seemingly bad plans succeed, fortunes can change literally overnight and what seemed an impossible situation can become positive and amazingly profitable. You can only try your best but you should do everything you can to make your efforts worthwhile.
Geoffrey Hollander is a partner at Cameron Baum Chartered Accountants and advises on General practice matters and tax investigations.