Ten (10) priority things that concerns us when to start a business.

Topic: Ten (10) priority  things that concerns us when to start a business.


1. Getting Customers and
achieving sales.
This is undoubtedly the single biggest issue facing
any business. It has been said that businesses face
two problems;-
A) Sales
B) Everything else.
While this seems trite, it is definitely true. If the
business has robust sales, then everything else can be
fixed. If it doesn’t have adequate sales, then the
business is in serious trouble, in fact there really isn’t
a business.
So the first concern has to be attracting new
customers, and retaining existing customers.
Developing a “route to market”, a marketing and
advertising campaign, and, probably, building a
website.
The route to market that you choose will depend on
your business and your target market. Consider online
techniques including search engine optimization, pay
per click advertising, social media marketing. Also
consider offline techniques such as newspaper and
magazine advertising, posters, and leaflets.
This should be clearly defined and planned in detail
before you launch the business and start incurring
overheads. Your business plan should be written
before you do anything else, and this will address all
these issues.
2. Raising capital
Almost every business will need cash to start off with,
whether it is to buy stock, lease premises, or just to
support the owner until a profit is made. Potential
investors will want to see a business plan and cash
flow forecast.
The usual routes to raise finance include using
savings, or personal credit lines. Friends and family
may also invest, and banks are a traditional source of
funds. These days crowdfunding presents new
opportunities.
There is a balancing act here – not committing
yourself to too much debt, but also not under
resourcing, which can restrict trading.
3. Cash flow
It is cash flow problems that spell the end for many
businesses, so it is important to sort out your cash
flow budgeting, planning and money management.
Almost all business need some cash to get started, so
you need to consider how to raise that. Are there any
loans or grants available?
Banks or investors will need to see your business plan
and satisfy themselves they will get a return on their
investment, so be sure you have a robust plan in
place.
Getting paid is an important part of cash flow, and
more difficult than it sounds, so set up a good Credit
Control system.
4. Company structure and Legal
Protection in the event of
business failure.
The Company structure you use for your business is
important. It has an effect on the Director’s personal
liability, the potential to raise funding, affects tax
liability and the reporting the company is expected to
carry out. Assess, the advantages and disadvantages
of each structure, and what will work best for you.
If you have set up as a limited company with limited
liability then generally your personal assets are not at
risk. But as a director you must still act within the
law and run your business in a responsible manner.
But if the business does fail, debts will be written off,
as long as you have not personally guaranteed them.
But if you are operating as a sole trader, as you are
personally responsible for any losses the business
incurs. So your personal assets are at risk. This is the
main reason people choose to form a limited
company.
5. Accounting, Bookkeeping and
Tax
The main concerns are understanding your
responsibilities, knowing when to complete accounts,
and planning how to record income and expenditure.
Make sure you keep all your invoices and receipts.
You need to either employ an accountant or use an
accounting software package. Again you may need
advice from an accountant about local tax issues and
the most tax effective way to structure your company.
Continued in next lesson.