Starting a business: what you need to know

Young entrepreneur starting a business. Guidon Group Stockton on Tees Accountants

Starting a business: what you need to know

Starting a business is something many people dream of doing. As the coronavirus pandemic continues to affect companies, redundancies seem to be part of the landscape in the future, sadly.

But fear of the unknown is often the reason why some don’t chase their dream. For many, they think they won’t be able to afford to do so. Others worry that no one will buy the product or service they want to offer.

If you have an idea then you are ready to start the process starting your own business.

Where do I start?

Like most things, you can’t start if you don’t have an idea. If you’re reading this then you probably do but you’re unsure about if it will work.

Don’t be put off if your idea feels too similar to another business. Look at the companies that are known as ‘disrupters’ because they started up and shook up a traditional market.

For example, Elon Musk and Tesla! Other carmakers were investing in electric vehicles, but it took Tesla to really start the ball rolling. The main thing to do is explore your idea to see if it has the potential to become a business.

You will probably need some help to look at the market potential of your idea.

Get some advice

Once you have an idea, then you need some advice. There are a few things you need to know about running a business before you start.

First of all, how do you find out if your idea has a market? How will you fund your business? Do you need expert, outside help to get the idea off the ground?

You can access a number of different initiatives run by local councils, such as Stockton-on-Tees Borough Council. There are also local training companies, such as Enterprise Made Simple. They have access to information as well as knowledge of local support for new businesses.

As well as funding, they can introduce you to strategic partners and mentors who will help you on your journey.

You don’t always need an accountant from the start. But you may need to consider speaking to one if you want to go limited.

Also, you may also want to ensure your self-assessment tax returns are done correctly. Failing to do so could mean paying too much or too little tax!. We offer a free initial meeting where you can discuss what legal implications you will face, for example.

Business plans

Benjamin Franklin is often quoted when it comes to plans. He said: “If you fail to plan you plan to fail!”

Many small firms go out of business because they didn’t plan. Had they done so, they may have noticed the possible issue at the beginning and created a contingency plan.

Part of a business plan is checking that there is a market to sell your idea. If there isn’t, at least you can change your mind or rule out your idea before you start spending money unnecessarily.

The plan will also allow you to estimate what kind of funding you need and whether you’ll need help from funding providers.
It will also mean you can work out if you can start from home or whether you have to find business premises.

Many people start from their kitchen table but there are cases where suitable premises is essential. Will you need employees from the start? Did you know 96% of small businesses are micro-businesses, which mean they employ fewer than 10 people!

You may be able to start alone for a year or two but if your business takes off, would you be able to afford to take on employees?

Your plan will also be able to help you decide whether should you be a sole trader or whether you should be a limited company.

If you’re a sole trader you basically own the entire enterprise and pay tax on everything you earn.

A limited business means you’re effectively an employee (even if it’s just you in the business) and you are paid a salary. As a result, the taxes you pay can be minimal.

Being limited also means you have a lot more paperwork to do.

You will need the expertise of an accountant to prepare and submit your accounts. They will even help you save money on your tax bill! If you’re not sure then that’s when you need advice.

All of this and more will be part of the planning process and can help you make the best decision.

Your next step!

If you’re thinking of starting your own business or have what it takes to be an entrepreneur, the government has useful information here.

And once you have made your decision, why not contact us, where we can help put you in touch with the people who will help you.