Setting up a business

2009-08-23T02:40:00.000-07:00

It is exciting when anybody decides that they are going to set up their own business. it is empowering and taking control of your own destiny. Most importantly it will be what turns this bad economic situation around. So I salute anyone who chooses this path for their career.

Setting up in business is a massive step to take. it is risky. You may be giving up a steady job with a regular income or you may be investing some of your hard earned savings. It is a big responsibility.

There are so many things to think about when you set up - what is my product or service? Who are my customers? Who are my competition and what are they charging? How can I be different to my competition? Do I need a website? How am I going to market my business? plus many many more questions. The next question people don't like to confront is how they are going to deal with the finances of their business? Unless you are financially trained it is a question that daunts even the most successful entrepreneurs.

As an accountancy company that specialises in new businesses I cannot begin to re-iterate how important addressing the finance at day 1 is. Dealing with the finances always seems to come at the bottom of any new business owners list. However if you deal with them at the beginning, it can be crossed off the list, you can be sure you are setting your business up legally and you know that you are on top of your finances right from the start.

If you leave sorting out your financial issues until later in your first year it can be difficult and more importantly very expensive to sort out. We have come across businesses time and time again that are not set up in the most efficient and legal way to do their trading. It varies from business to business and is dependent on so many factors.

Business owners spend so much time in their first year getting their business marketed, getting customers, dealing with suppliers and spending hours trying to build their business. They can be blissfully unaware that they have any financial issues. these range from not telling HMRC they are self employed (obligatory within the first 3 months of trading), incorrectly paying their staff (as they are not registered for PAYE) to being set up as a limited company but then not realising what all their legal obligations are.

By getting this all correct from the start you can be sure you are set up in the most tax efficient way for your business, you have kept the tax man happy and most importantly (and the reason you probably went into business) you are making as much profit as possible!

I was reading an article the other day in the August edition of Shortcut Confidential (a business magazine) and they were interviewing a chap called Robert Wass who is the managing Director of Sheerion LLP.

One of the questions they posed to Robert was,

Whats the biggest mistake you've ever made in business and how would you prevent it if you had the chance?

His answer.....................

"My biggest mistake was not taking the accounting side of my business serious enough. Although, it's not an excuse that works with HMRC, when I first started in business I was young and too busy trying to make money that I didn't really care much for paperwork.

Three years later when I finally started to get organised I paid for my naivety. Our accounts underwent a tax investigation and believe me it is not a nice experience. Trying to find receipts or explain what payments were for three years previously is not an easy or enjoyable task. Neither is the accountancy bill for sorting out the mess you have made or the inevitable tax demand that comes through your door.

Never, ever think that you can get away with not paying tax, it will always catch up with you. If I had the chance to go back I would have made sure I took the accounting side of my business a lot more seriously. I would never throw away a receipt and I would have made sure I got a good accountant.

I cannot stress enough how important the accounting side is to the success of your business. Done properly, your accounts can give you a great insight into your business no matter what your size."

So there you go! If you have recently set up in business and are not sure where you are heading financially get in touch with us at www.balanceaccountingsolutions.co.uk We are here to help and more importantly we are keen to hear about your exciting new business. We are happy to give you a FREE hour consultation and a no obligation quote.

Balance Accounting Solutions

Setting up a business