How To Set Up Your Own Business

By Faith Wilkinson

Skills

• Marketing skills are essential in business. Promoting and selling products/services. It’s about acknowledging client needs.

• Management and leadership is a significant skill required in order to succeed in the business industry. Management involves the smooth running of individual’s effort to achieve the goals required.

• Financial skills is about the ability to deal with money, reaching outcomes about savings and debt, assembling financial accounts and understanding risks.

• Self-presentation is essential in business. How an individual presents oneself can affect clients’ perception on you and your business.

• Corporate presentation is a special method of communicating and developing your company’s image. This can be used to promote a product or service.

Resources

Some business start-ups may be located at their homes, office leases or divide space with an existing business. The building should be appropriate for the type of production that is carried out by the organization. Suppliers are generally divided into four different categories. These include: manufacturers, distributors, independent craftspeople and import sources. When seeking supplier, reliability should be the prominent factor to look for. Establishing good professional relationships with your suppliers can ease pressure when clients make challenging requests.

Legal Status

When starting up businesses, the legal structure must be considered. The most prominent are listed below: 1. Sole Trader (Owner has sole control of business)2. Partnership (2+ individuals, sharing of costs and

profits)3. Limited Company (Finance of company is separate

from personal finances of owners) 4. Limited Liability Partnership (Partners are not

responsible for each others financial liabilities/obligations or malpractice)

5. Community Interest Company (Social purpose rather than profitable)

Legal Aspects1. Health and safety – Owner has responsibility for impact of health and

safety upon employees and members of the public.2. Fire precautions – a fire certificate may be required depending on the

type of business. 3. Environment – There are environmental regulations that must be

considered if the businesses uses equipment or resources such as refrigerators/air-conditioning and packaging.

4. Employee rights – The legal rights of the employees must be protected by the owner of the business.

5. Intellectual property – Business names, patents and inventions should be copyrighted and protected. Other businesses intellectual property rights should be respected.

6. License - Businesses should always ensure that they may need a license to trade.

7. Insurance – It’s a good idea for businesses to have insurance to cover loss/theft of business property. Additionally, it is mandatory that public liability must be in business insurance.

8. Providing services for disabled people – Under law, businesses must do everything possible to ensure that access for disabled people are beneficial and possible.

Tax

The operation form of the business determines the type of tax is required to pay. The most common taxes are listed below: 1. Corporation Tax 2. Value Added Tax (VAT)3. National Insurance4. PAYE (Pay as you Earn)5. Stamp Duty6. Capital Gains Tax7. Capital Allowances

Sources of Finance

There are two different types of sources that are funded from outside and inside the business. It’s important to have a source of finance when starting up a business to help fund the resources required. These can either be long or short term. Internal soures – Funded within the business eg holding onto profits which can be used for financial expansion of the businessExternal sources – These sources feed into the business, and they can be: investors, banks, sponsors and creditors.

Financial Systems

Short term Long termOverdraft facility Owner investmentTrade credits Loans from bank/friendsFactoring Debentures Mortgage Leasing Grants

Credit Control

Method used by organizations to ensure that credits is given only to clients that are able to pay, additionally on time.