Optimism, Hard Work and Success in Business: Are the all related?

Optimism, Hard Work and Success in Business: Are the all related?

A great interview with a successful Entrepreneur, aims to inspire any one thinking about starting their own business. be sure to check it out.

Introduction


So you have decided to start your own business, you have this great idea, you have started your business plan and now you need to know what to legally define your company as, well here is a simple guide which will tell you about the possibilities and some of the pros and cons of each.

Choosing the right one is an important step so take your time over this and access your goals and ambitions and chose the one which will best suit your business.

Sole Trader


This is by far the easiest way to set up a business and it is the most popular for those starting out, below are some of the key features:

1. only one person runs and is legally responsible for the business
2. All you need to do is register with HMRC as self employed other than that no other registration is required
3. you trade in your own name for example, Sarah James or with a trading name such as Sarah James trading as My Business
4. you are taxed via the Self Assessment and you normally pay tax twice per annum.

Pros

1. You are only need to maintain a Profit and Loss and Balance Sheet so accounts are kept to the minimum and so are fairly straight forward.
2. very easy and quick to get up and running
3. All profit after tax is yours to keep.

Cons

1. you are personally liable for all the debts incurred
2. your personal assets are at risk, if your business fails your creditors can seize your property in settlement.

Partnership


This is the second most popular way of running a small business.

Features

• a minimum of 2 and a maximum of 20 partners
• Can operate under partnerships name or the partners name followed by trading as. But all correspondences must use name of all partners.
• Each partner must register with HMRC as self employed.Partnership agreement should be signed, to minimise problems in the future.

Pros

1. Very easy and quick to start.
2. Accounts can be simple if you maintain organised books.
3. responsibility for business debts is shared amongst partners.

Cons

1. you are personally liable for up to 100% of the partnership debts and creditors can chase you for this
2. your personal assets are at risk and can be seized by creditors to settle debts
3. When you sign a partnership or verbally agree a partnership, you must split the profits in the agreed proportions

Limited Company


This is one of the less popular methods for start up companies, mainly because the costs to set them up are much higher, however recent legislative changes mean that ltd companies with profits less that £10k have tax breaks mean that they are rising in popularity. They are usually done by established businesses and start-ups with high start up capital.

Features

• a separate legal entity in its own right and can sue and be sued
• owned by the shareholders
• set up via registration at Companies House - see link
• annual accounts have to be submitted without fail

Pros

1. Liability is limited by shareholders stake in the business
2. The company is an entity in itself and hence will not dissolve when the directors or shareholders die or leave.
3. Ltd companies are viewed in a more trustworthy light that sole traders and partnerships.

Cons

1. Large amount of paper to register company.
2. It has much higher costs associated with set up.
3. you can be fined for missing the annual returns

Do I need to write a business plan if I am not planning for bank loan or investment?

This is a questions that I am asked by many starting up a business and the simple and emphatic answer is YES. The fact that a bank or investing individual or institution is a secondary consideration.

Primary focus if the business plan.

The primary and most important role of writing the business plan is to guide and direct the business owner or manger in the operation of the business. Preparing and writing the plan focuses the writer consider all the possibilities and aspects associated with their business. It forces the writer to confront and come up with solutions to any problems which the plan may highlight. It helps you to think about yourself and where you have a deficit in a certain skill and allows you to focus on these and allows you to search for training opportunities or advisers to fill this gap.

A good video on what type of business plan would suit you, by Tim Berry:

Financial advantages of doing a business plan

A monthly comparison of all known costs over time, will indicate to you the necessary sales you need to accomplish in order to match these and a make a profit. It allows you to look at this figure and assess whether it is a reasonable number, if it's not then it can cast a doubt on the validity of the adventure itself. So it is not just a tool for getting an investment or working capital but it's a tool to give your business direction and assess the validity of your hypothesises.

The business plan is an important and working management tool, which allows the manager to anticipate and compensate for situations before they arise and prevent business emergencies.

Foresight and planning are a vital part of starting your own business, don't underestimate them. You can find more information on writing business plans for small business.

Happy New Year - Starting a new business: Business Ideas

Just thought I'd wish you all a very happy and hopefully a profitable New Year. If your New Years resolution is to start your new business then now is the time to act. I know that it can be a mine field of information and this information overload can lead to people giving up on their goals, but please don't. Starting a small business doesn't have to be complicated or stressful and doesn't have to take all that long. But you have to act or it will just stagnate and you will go off the idea.

So get up, and start working come up with that business idea, use brain storming, mind mapping or just jot think about:

• Online - You could start an online business, in e-bay selling, affiliate marketing, content writing etc. The only thing i will say is watch out for the scams there are many and don't sign upto every site you first find. One useful one i still use is Keyword Academy which is well worth looking at. Here is a useful video: 

•  Hobbies - you'd be amazed at how you can monetise your favourite things to do, if you are an incredible baker start up a cupcake company, if you're great at cross-stitch start a personalized cross stitch company, photography start doing head shots for actors.
• Writing - If you are passionate about writing, as I am, then you could start writing articles for content farms, you could use Elance, freelance etc. to get work from people, you could start writing a book.
• Skills - If you are very good at something i.e. leadership, communication, marketing then why not think about starting a consulting business, consulting medium companies and or groups or provide specialised training in these areas.
• Subjects - If you are an expert in a subject, maths, instrument, singing, science, languages then why not start a tutoring company
• Market Experience - If you have worked in retail or product development for many years, why not turn your hand and expertise to making money for yourself in the market you know best by setting up shop, plus you have the advantage of knowing the competitors well having worked for them.
• niche business ideas - This is where you start a business which could be a spin off from a main business idea, for example a child friendly restaurant which caters for kids needs over parents needs.

A good business idea will set you free.

So there are some ideas, use this new year, or if your not reading it then, now to get your business ideas on paper and start this new year with a bang. Once you have done this you are in a good position to make a good go of it. Wondering what to do next, there is a good business startup checklist at The Business Startup Hub which is really worth checking out.