10 steps to success: starting your business
Success is different for everyone.
The meaning of success to you could be selling your business for a life changing amount of money, being able to incentivise your team and enable them to participate in the business profits, or it could mean being able to retire to the seaside to watch the waves every morning. Understanding what success means for you is the first step to achieving it, you then need to work out how you get there.
Setting up and growing a business from scratch or taking over from the previous generation means there is an emotional connection as well as financial investment. Taking time to develop a strategic plan to take care of the business and the people in it is fundamental to its success.
At Crowe we talk to our clients about success and listen to their plans as early as possible so we can support them along the way, helping them achieve their ultimate goal.
We outline the 10 steps to consider when starting your business to secure its success.
| 1. Visualise your success | 2. Write a business plan |
| What does success look like for you? It could be retiring to a cottage by the sea but you should also recognise that it may not be a tangible thing. Once you have that image, keep the picture as it will help to remind you why you work so hard at times when business is not so easy. | Now you know where you want to be you need to figure out how to get there. Writing a business plan allows you to write your objectives, decide your audience and use it to raise finance for your business. Using the business plan to break down your main goal into to smaller ones makes the challenge easier. A trusted advisor can review your business plan and help you to forecast how long it will take to generate profits. |
| 3. Build your brand | 4. Create and build a strong network |
| Your brand should be more than just a logo. It should be a reflection of your values and what your business stands for helping to resonate with your target audience. A strong brand can influence consumers purchasing decisions and can put your products and services at the forefront of the minds of your customers. | Build yourself a strong network of family, friends and business advisors to help you develop your business either by working or sharing ideas with them or through getting introductions to people in their network. Your network should be diverse and representative of your customer base. The more diverse the better placed you are to meet their needs. Make sure you see your contacts regularly, to make sure you are in mind whenever an appropriate opportunity or introduction arises. |
| 5. Choose the best structure for your business | 6. Secure initial finance |
| Choosing the right structure of your business affects its legal status, how it operates and how much tax you will have to pay. Speak to an advisor who will be able to tell you the difference and help you choose which one is right for you as an owner, benefits shareholders/employees and is the most tax-efficient. | In addition to your own investment into the business you may want to secure external investment. There are lots of different ways to finance your business including asking family and friends, a bank loan, government grants or through a business angel. A trusted advisor can guide you through the process and help you to decide which source of finance best meets your needs. |
| 7. Decide how you work | 8. Put strong procedures in place |
| Finding the most suitable way to operate your business is an essential part of your business journey. You will need to think about whether you will operate from either a home office, a shared office or private office. Operating from a home office can be cheaper due to tax advantages such as deducting part of your home's operating expenses as business expenses but it may affect your mortgage or home insurance. However, if you choose to rent or buy a property to operate your business out of, you may have additional expenses to account for such as business rates. | At some point most businesses are likely to have a visit or an enquiry from HMRC. It is never a particularly pleasant experience but the pain can be lessened if you are easily able to demonstrate that your businesses has good solid procedures in place. For example, if you are paying a dividend, make sure you have minutes which reflect that you have considered the availability of distributable reserves as outlined above, have a clear documented expenses payments process, outline any key internal policies such as private use of assets within the staff handbook. A recent review we did for one of our clients on mileage payments, we helped to improve record keeping procedures reducing their costs by over £12,000 a year. |
| 9. Delegate your company’s finances | 10. Plan ahead by thinking about succession early |
| Starting a new business can be daunting and keeping a handle on the finances can be quite complex. If you feel ready to delegate your company’s finances, you can then focus on the growth of the business. Good support in finance is essential, as there have been so many changes to tax compliance in recent years and HMRC are swift with interest and penalties. If this is not your area of expertise make sure you have an expert on your side. | Succession planning often takes people by surprise. Whether it is due to retirement or to take on another venture, considering selling or passing on the business is a big step and you will want to make sure you make the most of the investment you have made. Get an idea of the value of your business as it is growing and see how it compares to the value you want or need for the next stage in your life. Don’t forget about tax as even though there are some very efficient ways of disposing of your business it is likely there will be some tax to pay so incorporate this into your plan. |
For more information, visit our Business lifecycle.
How we can help
Rebecca Durrant
National Head of Private Clients, Manchester