To start a business you need an idea, a product to sell. This is usually the most difficult part. It is not always easy to come up with a business idea that hasn’t already been done so you should research first what is out there. Many people have brilliant ideas but not all of them manage to create a successful business. Careful planning, setting realistic goals and most importantly knowing everything there is to know about the product usually determine the success of a business start-up.
So, you have an idea, you have done your research and you think it will work, but how do you get it off the ground? The first thing is to put pen to paper. Draft a business plan. A written business plan will help you get perspective, think carefully what you want to do and what your target is and how to go from here to there. It will also be essential for getting funding from a bank or an outside investor. A business plan will help you decide for example how much money you need to start. You will have to consider start-up costs (premises, insurance, stock levels, marketing budget etc) and a cash-flow statement that will estimate your expenses (salaries, travel and non-pay expenses etc) and your income (make allowances for personal finance as well as business finance). Be realistic and plan for the future.
Besides a carefully prepared business plan knowing the market you are entering, the competitors, the key suppliers and distributors and of course your future customers are also equally important. Your customers are ultimately the key to your success: know who they are, what affects their purchase decisions and what will convince them that your product is better than that of the competitor. Having done your research carefully and knowing your product well from the start will make the difference. Once you enter the market you will have to make changes and adapt but you won’t know that beforehand. So think and plan carefully, know the economic climate but don’t take too long as markets change rapidly and you might have the right product and the right business plan but be too late.
Depending on your personal circumstances and your product, your goals and your finances you need to decide the right business structure that suits you. The common business structures are usually sole traders, limited companies and business partnerships but there are other available structures as well, so again research is the key. The type of business you decide will determine many things such as the necessary paperwork to launch the business, the reporting requirements, the tax to pay, how to get profits personally and the responsibilities you will personally be liable for. As a general rule partnerships are better initially when profits are low and companies are usually better when initial profits are expected to be higher. So choosing the correct business structure is crucial.
Get the necessary legal documents correct from the start. There are several websites that can help you prepare the necessary documents but usually getting legal advice before launching a business that will affect your personal and professional life is much better.
At CH Legal we can help you decide the right structure for your business, prepare the legal documents and help you get started.