There’s nothing like the thrill of starting a new business. Your head is bursting with creative ideas and new concepts. You can’t wait to get stuck in and create your first company empire. Every entrepreneur’s mind works like this.
They’re entirely focused on launching their product or putting new ideas into motion. However, there are lots of administrative considerations to work through first. It’s a slow process of dull tasks, but I’m afraid it’s an essential part of business.
Without checking off each and every task from this list, your startup is going nowhere. Worse, you could leave yourself vulnerable to lawsuits and bankruptcy. Many entrepreneurs will glance at this list and ignore it. Trust us, we’ve seen plenty of business owners do the same thing and end up in trouble. You might have a world-changing idea, but you’ve got to build those foundations first.
1. A thorough business plan can go a long way
Without a business plan, you’re setting off in the darkness. It’s like taking a road trip without a map. You might have a great idea, but you need to define its purpose. What is your mission statement? How will you turn this idea into a profitable business? Where do you want to be in ten years? A business plan isn’t just a guide to the future, it’s also an essential piece of your investment puzzle. Every small business needs capital. It needs an injection of funds to get going. Well, no bank will grant you a loan without a sound business plan. So, before you do anything else, sit down and work this out.
2. Don’t lose sight of the budget
As we said, every small business needs money to get started. But, how much? Every startup is different. Each has their own bespoke costs involved, so what are yours? It’s time to draw up a specific list of startup costs for your business. In general, we break this down into assets and expenses.
Assets are the physical tools and ‘things’ you need to do your job. If you’re mechanic, this will be your essential tools and equipment. Your expenses are things like the rent on your mechanic garage or your marketing costs. Get realistic quotes and keep a certain amount aside for emergencies.
3. Employment permissions
Many small businesses will hope to bring on a few employees. Before you do, it’s important to use an employment verification system to confirm work eligibility. It’s also worth drawing up extensive employment contracts and agreements. It will tighten your foundation and help protect against employee liability cases. We’ll come to more legal issues later on.
4. Business structure
In order to trade as a business, you need to register your company as a tax-paying entity. An accountant will help you do this, but you’ll need to choose the right business structure. Each one has different rates of tax and varying legal consequences. For example, a sole trader or partnership business is less risky than a limited company. With a limited company, your personal assets can be seized in the event of bankruptcy. It’s these considerations that are best discussed with a lawyer and an accountant.
5. Other legal issues
We’ve touched on a couple of legal requirements for setting up a business. But, we’re not finished yet! You may think that it’s far too early to consider hiring an attorney. However, in our experience, the earlier the better. You need to protect your company right from the start. First of all, there are intellectual property considerations.
You’ll need to trademark your company name and apply for any relevant patents. You may also want to consider copyrights on any creative aspects. Next, you’ll need to draw up sound legal contracts for use with suppliers, employees, and distributors.
6. Hire an accountant (if you can)
We explained before how an accountant will help you setup your business structure. This same accountant should also take care of your end-of-year and tax accounts. In addition to that, it’s worth hiring a day-to-day accountant to take care of your books. As an entrepreneur, your sole focus should be on the business.
You should be making deals, meeting clients and powering the company. Let someone else take care of the accounts and keep the books. A qualified accountant will get your business organised from the very beginning.
7. Health and safety
Lastly, you should commission a full health and safety audit on your small business. It’s early days, but it’s worth making sure you conform to regulations up front. Getting essential legal regulations in place from the beginning will save you trouble in the future.
Once you’ve taken care of these aspects, you can free yourself up to focus on the business. Unleash those fantastic ideas, and power the company forward! Best of luck with your new venture.