1.  Write a Business Plan

Write the plan in a way that it makes people want to read it.  This is important as it will be read by people outside the organisation and needs to make sense to them.  Banks, equity investors or senior management are unlikely to buy into a plan that they cannot understand.  Get as much independent advice as possible.  This may cost money but getting someone unattached to look at the plan could save you time and money and they will be more objective.

2.  Consider what skills you need

However great your initial idea may be you need to ensure that you can follow it through with conviction.  Are you able to sell, provide after-sales care and manage your cashflow.  If not you may fail and so it is important to ascertain these short falls at the beginning and try and plug the gaps.  This could be through courses, employing the correct personnel or making use of external businesses such as consultants.

3.  Be aware of the legal and tax implications of the trading structure you choose

Registering as a Limited company will mean that certain information will be publicly available through Companies House.  Sole traders and Partnerships do not need register with Companies House but will have unlimited liability for any debts of the business unlike a Limited company.

4.  Understand the obligations and regulations of your industry

There are many industry specific regulations that your advisors may not be aware of.  As a director of a company or a sole trader or partnership it is your responsiblity to ensure that you are up to date on your obligations and regulations.  If you are not you could be liable to fines and penalties which in some instances could be large enough to see an end to the business.

5.  Make sure you have sufficient insurance cover

There are many types of insurance cover you may require such as motor fleet insurance for company vehicles.  If you employ staff you will need employers liability insurance.  Other types of insurance range from business interruption, buildings and contents, professional indemnity insurance and public liability insurance.  It is important to gain the right level of cover for your needs.  Not being insured appropriately could lead to significant financial loss and the ultimate failure of the business.

6.  Cost your products/services properly

It is vital to ensure that you make a profit on the products/services that you will be selling.  In order to get the selling price correct you need to know the cost of the product/service being sold and what profit is needed to cover your overheads.  You should not price on cost alone but take into account the value of the benefit you are selling.  Missing the obvious could have disastrous consequences.  What are competitors doing?

7.  Think about your exit strategy

What are you trying to acheive by running the business?  Are you running the business for lifestyle purposes or do you have a plan to sell the business with a view to making a capital gain.  This will play a major part in how you are advised as we can help you limit the tax implications of a sale.  You could end up paying large amounts of Capital Gains Tax so get professional advice early on.  You need to consider various external factors when deciding when to sell and we can guide you through this process.

8.  Think about a successor early on

Not having a succession plan can create uncertainty amongst staff, customers and suppliers alike.  Not having a succession plan can have a detrimental effect on the value of a business which is especially important if you are looking to sell.  The value of a business is seriously effected if the knowledge is all inside key management's head.  You should think about putting time and investment into ensuring there are sufficient systems, processes and procedures in place to ensure a smooth handover.