Setting up your own small business is a big step and one that needs to be thought through properly before you jump into it. This guide will highlight some of the key things you may want to consider before and during the setup of your brand new company, so that you can give yourself the best start.
Test Your Business Idea
If you haven’t done this already, it’s really important that you start right away. Testing your product or service before you take the leap into the business world will help you to iron out any major issues before you start. Running a business is no easy feat, no matter how great your business idea and if you start to run into serious problems during the first few months, it’s unlikely that you’ll last much longer than this. Whether it’s free trials, focus groups or any other type of field research, testing the waters before you put anything out there for real is incredibly important.
Creating A Company Name
What’s in a name? Well, actually quite a lot if you’re trying to set up a small business. Your business name should of course be something original and imaginative but that doesn’t mean you have to spend hours agonising over it. Some of the best company names come to owners when they’re in the shower or out at the park. Be sure to always carry a notebook with you and jot ideas down on paper whenever you have a bright idea.
This first name you pick may not be the name that sticks. Just keep going until you’re sure the name you’ve chosen reflects the products you offer, as well as the business you want to be.
Which Type Of Business?
You’ll need to give some consideration to which type of business you want to run, as this will affect your finances and legal status in different ways. The three structures you can choose from include being a sole trader, a limited company or a partnership business.
As a sole trader or partnership, you’ll find your business is easier to set up and you may pay out less in taxes but you wont have the freedom to expand. If you set up as a limited company, you can go on to employ others and your financial and personal assets will be separated should you come into any trouble. However, as a limited company you will be subject to more paperwork and will have to pay corporation tax.
Accounting and finance
There are so many things to consider when setting up and running your own business, especially if you have to deal with multiple clients on a regular basis. A good cash flow is essential for any small business but the accounting side of owning a company is a whole other job in itself. If you can’t afford to hire a traditional accountant to take care of things (which many start-ups can’t), then you might want to consider a less traditional, cheaper alternative.
Online accounting software is one alternative that’s perfect for small businesses and allows owners to manage much of their financial workload in one place. From sending professional invoices to managing an overview of your client’s payments, easy to use accounting software can be a real blessing for small businesses, helping them to save both time and money.
There are so many things to consider when setting up your own business but if you’ve got the basics down, you’re much more likely to succeed during your company’s first and hardest months.