Starting in Business
Owning your own business can be exciting and financially rewarding, but unplanned and unresearched could be the cause of much unhappiness. Before you start you must understand the financial requirement of your business and the capital you require to carry you through the early months. You must ask yourself, and more importantly others, whether there is a need for the services your new company has to offer. Check your ideas carefully before spending too much money. Nobody will have your vision of what you believe the future might hold, but is a good idea at this stage to produce a business plan and ask a competent professional to look for any gaps in your plans. We have produced a simple spreadsheet to help you- this maybe downloaded as an interactive sheet or in paper format. For further help visit our download page.
Having satisfied yourself that your ideas have legs, you will have to decide what type of business you wil operate. if you propose to work alone it may be best to start trading in your own name, it is the least complicated and at the end of the year your tax will be calculated on your profits, that is the total of your sales less the expenses you incurred in fulfilling your orders. You will be responsible for all the debts you will incur in running you business, but other than informing HMRC that you have started your business, you have few other legal obligations. You will have to keep basic records of your sales and business expenses but there are few other statutory obligations. We can help with our fixed cost startup package.
Maybe you will seek the help of a friend or another who has a particular expertise to become part of the proposed new venture. Partners have a responsibilty to the business since a decision made by one partner is usually binding on the other. A partnership agreement can be a wise tool. You can assign what share of the profits each partner will receive and conversely how the partnerships debt will be paid and much, much more. That being said it must be remembered that the creditors of a partnership can call on the personal assets of each partner to clear the debts incurred by the partnership. Tax is not paid by the partnership, but partnership accounts have to be filed; each partner will pay tax on his or her share of the profit when the Self Assessment Return is completed.
