Why entrepreneurship is the new women’s movement
Starting a Business
How to set your business up for success
For most of us, the idea of setting up a business can feel like a complete minefield, but owning your finances, getting a grip on the legal side of things, and setting the initial groundwork are essential aspects to pin down, no matter your venture. While we often focus on the creative parts when finding our feet – from a perfectly curated Instagram feed to nailing our email marketing journey – none of this will create the impact you desire without feeling confident in the very basis of your business.
Trust us, you’ll find it far harder to play catch up than taking ownership from the get go. The best part is, your business is an evolution and you’ll always be improving, so don’t sweat the small stuff around getting it completely concrete the first time. You can change everything from switching from sole trader to limited company, to re-establishing your year end date, becoming VAT registered, or even shift from self employed to employed, and back again! But remember, a bit of forward planning is NEVER a bad idea in business, so let’s break it down…
1. Make a name for yourself
In the literal sense. This is one of the first decisions you’ll have to make when it comes to practically setting yourself up, and importantly, before you make any financial investments that tie yourself to that name. Think about what makes your business, well, yours, and choose a name that reflects that. Do you want your name to describe what you do, what you stand for and who you are? Or are you aiming for something more abstract?
The name itself is down to you, but ALWAYS remember to check that it hasn’t already been taken. There’s nothing worse than investing in a website, email address and perfectly printed personalised notecards, only to realise there is already someone using it. A quick google search never goes amiss.
2. Get yourself registered
So, you’ve decided on your business name (and checked that it’s yours to claim!) and now it’s time to get registered. You’ve got a couple of options here, and as we said earlier, nothing is permanent, so don’t lose sleep over signing into a lifelong commitment. Your first option is to register as a sole trader, which means you’re letting the tax man know that you’re now self-employed, and will be filing a tax return by January each year.
The second is to become a Limited Company, which involves registering your business on Companies House. Aside from the £15 filing fee, this is all you’ll need to do to get started – and hello! – you’re now an official company. The primary difference when becoming a limited company is that any liabilities are ‘limited’ to your business, while a sole trader will be liable for any monies owed. Regardless of which you decide on, you’ll have financial admin to keep track of from now on, so keep tasks like submitting year end accounts, tax returns and self assessments at the forefront of any money spent (or accrued!)
3. The T word
We’re not going to get into the depths of all things tax in this article, but if there was one thing we wished they put in bold letters when you first register yourself as a sole trader, it’s that when it comes to your first years’ self assessment, you are asked to pay a year in advance.
This means that, for some people, almost two years will be due when you make your first payment; the year just gone, and a payment in advance for the following year. SO many people get caught out by this, so it’s really worth spending the extra time to get it right, as that first hit can catch people off guard. Our advice? Do your tax return as soon after April as possible, as it is due by the following January. That way, you have a whole 9 months to know what you need to pay.
4. Find yourself a professional
We advise you to find yourself an accountant, and here’s why. By seeking the help of someone in the know, they can ask all the questions for you, and feed them back to you in a way that you fully understand. They can help you define what really is the best set up for your unique circumstances, because we’re all wonderfully different, so have differing needs, wants and priorities. Wrapping this up at the beginning of your business journey avoids potential late filing – and those dreaded fines – along the way.
Having said that, there’s nothing stopping you from handling your own finances and completing your tax return and company accounts yourself, but an accountant is often a wise business investment. Not only will they save you hours of frustration and ensure that your accounts are legal and above board, but they can actually help you save money by ensuring that you’re making the most of any tax breaks.
5. Define your payment terms
It’s imperative to think about your cash flow from the very beginning, because remember, fixed regular costs may still be required to be paid even in slowest of starts or quiet sales months. Think practically about negotiating payment terms with suppliers, to ensure you’re able to stay afloat during those quieter times.
6. Create financial boundaries
Although here at Holly & Co, we’re big believers in creating one ‘good life’, where work and home are perfectly intertwined, we feel slightly differently when it comes to money. Keeping your business and personal finances separate from the very start will create clear boundaries as to what’s up for spending, and what needs to head straight back into the business funding pot.
If a business account feels a bit of a jump away, you can always get started with a second personal account dedicated to all things business, but do consider what you might need in the near future. If expansion plans and borrowing money are on the horizon, it might be worth kicking things off with a business account from day one.
By having a clear understanding of what makes a secure business set up, you’ll allow yourself more time to focus on the things that spark your passion and excite you – which, ultimately, is what we know it’s all about! With this in mind, we’d love for you to tell us all about your business blind-spots; the key areas you’d like us to cover with advice from Holly, your fellow founders and industry experts.
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There's never a right time to start a business
With our busy lifestyles actually starting your business can be one of the biggest challenges so Holly reminds us why we just have to do it! And shares tips on how to actually get going.