Register nowBecome a member

LoginIf you are already a member, please login

Forgot your password

or keep it simple with and login with social media

24th August 2012

Starting your Own Business - 4 Critical Areas to Cover

 

Deciding to start your own business is easy. However ensuring that your start up does not become an insignificant statistic in the "graveyard of broken dreams” along with the start ups  that fail within 3 years is more problematic.

Let's take a look at 4 critical areas to increase the probability of success for your business.

 

 

1. Legal structure of your business

The legal structure that you choose for your new business will have far reaching consequences and you should be crystal clear as to what structure is best for you and why.

There are three common ways to structure your business:

a) Sole trader

b) Partnership

c) Limited company.

Sole trader

As a sole trader you will be solely responsible for the debts of your business. Clearly this is something that requires serious consideration on your behalf as failure could leave you saddled with the debts of the business, even after you cease trading.

Partnership

Setting up your new business with a partner and forming a partnership to conduct your business means that each of you will be liable for the debts of the partnership. It is important to understand that this does not mean the debts are shared or split between you - each of the partners will be jointly and severally liable for all debts of the business.

Limited Liability Company

A limited liability company has a separate legal identity from its promoters, shareholders or directors and the company's liability, if things go wrong, will be limited to its paid up share capital.

 

2. Your personal make up

All of us, at one time or another, dream of "firing the boss". The attractions of being your own boss working when you choose to; and fitting your new business to accommodate your lifestyle is an irresistible lure for many.

The reality is more prosaic.

Setting up and running your own business can be a lonely, tough task especially in the early days. If you are someone who enjoys the company of colleagues in work, superiors to rely on when it comes to making tough decisions and long weekends recharging your batteries setting up your own business will be a tough journey.

Running your own business will involve all decisions, big and small, being made by you, working weekends and ultimately relying on your own judgment with the buck stopping on your desk.

 

3. Professional advisors

Having professional advisors that you can rely on and whose judgement you respect can provide a great sounding board for many of the significant decisions you will need to make on your own.

So get yourself a good accountant and solicitor to whom you can turn and who will ensure that all of your legal requirements are met - things like registration for VAT and as an employer, business name registration or company set up are necessary details that will need to be executed properly and which will allow you to spend more time on the overall development of your business.

 

 4. Cash flow budgeting

A prime reason for the failure of start-ups is a shortage of cash. Cash is king, especially in the early days and you need to be clear about the difference between profitability and cash flow and the ability of new businesses to suck considerably more cash than anticipated in the early days.

In conclusion, starting a new business can be an exhilarating white knuckle ride. However, taking care of these four fundamentals will ensure that it will be an enjoyable and profitable journey too.

 

Terry Gorry

Comments

Write a comment

Comment

or
Sign in without social media

Welcome to the new All About Business

Close

Powered by

Help us build your profile with some basic details

Please fill in all details.

I`m happy for Bank of Ireland to contact me about their offers I do not want to receive more information, content and resources to help me enhance my business

Thank you for registering

Close

Powered by

Looks like your email address is already registered with All About Business

Recover password

Close

Powered by

Enter your email account to recover your password