Five factors to consider before starting your own business

Business plan

Many entrepreneurs find writing a business plan at the start of their entrepreneurial journey to be very beneficial. It can help you set out your ideas and see if your idea is feasible. Having a business plan can also keep you focused and on track with your objectives as your business grows.

A business plan may be required when applying for finance or pitching to investors.

Key details to cover in your business plan include:

• The gap in the market your business is filling, backed up by market research
• Your business goals and objectives
• Your unique selling point (USP)
• Your marketing strategy
• The team you have on board to deliver your ambition
• Sales and cash flow forecasts

An accountant can help you create, and review your business plan to ensure it's credible and professional. Read our guide to writing a business plan for more information.

Funding and investment

It’s important that you estimate your start-up costs before launching your business so you have an idea of how much you can fund yourself an what external investment you'll need. The costs to consider include property purchase or rental, equipment and furniture purchase or hire, insurance, energy, stock and recruitment.

Once you’ve worked out your costs, we recommend you speak to an accountant to help you understand how much working capital you need to run your business and prepare a cash flow forecast.

You may require external finance to start and run your business so be clear about your options. Many entrepreneurs turn to friends and family for their initial start-up capital. If you go down this route, you must be very clear about whether the funding is a gift, loan or investment. Preparing a formal agreement and seeking independent legal advice can help avoid misunderstandings further down the line.

Other finance options include a bank loan which is secured or unsecured finance that you must pay back with interest. Read advice on how to get a business loan here.

Traditional bank loans may be hard to access for new businesses. The Government's Growth Guarantee Scheme could be useful.

You could also track down grants which is funding that you don’t have to pay back, we offer advice on applying for grants here.

Read our full guide to business funding here.

Business structure

A key decisions you need to make when starting a business is which business structure to choose. The best choice for your venture will be dependent on your personal circumstances so it’s important you understand your options.

The main business structures are:

• Sole trader
• Limited company
• Partnership
• Limited Liability Partnership (LLP)

Sole trader is the easiest structure to set up because it involves limited paperwork and legal obligations, but it could mean you have reduced access to finance, less credibility in the marketplace and problems attracting customers.

Creating a limited company is more complicated and involves more costs and paperwork, but it can be advantageous when it comes to raising funding, encouraging trust among your customers and gives you more ability to time personal tax payments.

Speak to an accountant to understand the pros and cons of business structures and working out what your best option is both now and in the future.

Find an accountant

You need to wear many hats when starting your own business, which can be challenging. This is where an accountant can help.

They can help you:

• manage your finances
• prepare your bookkeeping and accounts
• monitor your cash flow
• comply with your tax responsibilities
• improve your tax efficiency with proactive tax planning
• avoid penalties for filing your tax returns late
• prepare your payroll.

Working with an accountant in the early days of your business means you can build a good relationship, and start to create your business network. Accountants will have many local contacts who can offer you support andf advice for your business. An accountant is also useful as your business grows to ensure that you maximise all opportunities. Read our guide for more advice on why you might need an accountant and how you can find a good one.

Employment issues

If you launch your new business with employees or plan to recruit some in the future, there are several factors to consider.

You need to know how you are going to find your staff, and how to keep those employees working for you. Options include using a recruitment agency, your company website and social media networks like LinkedIn.

Other factors to consider are training and benefits for staff to keep them motivated, productive and skilled. You'll also need an idea of what employment law and obligations you need to be awarew of as an employer.

TaxAssist Accountants can assist you with your payroll obligations and we work with employment law support service Employmentor. It is a practical and cost-effective service that equips businesses with tools to manage day-to-day employment law issues, while complying with legal requirements.

How TaxAssist Accountants can help

TaxAssist Accountants can support your start-up business. Our expertise covers tax, accounting, bookkeeping and payroll so you can be sure we can do more for your business. Call us on 01322 553597 or contact us to find out more about our services and to book a free initital consultation.

Date published 2 May 2023 | Last updated 25 Oct 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

---