The state of the economy would suggest that now is not a great time to be starting your own Start Up business but with unemployment and redundancies on the rise it could actually be the perfect time to go it alone.
Below are three top tips for anyone looking to start their own business.
Minimise your personal liability
There is a good chance that you will have to take out a business loan when starting out on your own but loans have become increasingly hard to take out as the banks have curbed their lending.
This is particularly true of unsecured loans and so you may be asked to put up your property as collateral for a secured loan. For start-up business own liability depend more and it give strength to the business, so make it quite affordable. Just make sure to ask for advise from a bankruptcy lawyer if in case financial problems are being encountered.
One word of advice: DON’T!
Even if you think you have the most watertight small business plan you can never be sure that your business won’t fail and the last thing you need is your house being pulled from you at the same time as your business.
So, wherever possible, never use your house as a guarantee and keep personal liability to a minimum. Negative thought on business always affects and affect it badly, so stay away from it.
Keep a good account
It’s important to keep on top of your accounts from day one. This means keeping a comprehensive list of your incomings and outgoings so you know exactly where your money is coming from and where it is going.
If you fail to do this then it becomes harder to identify the areas in which the business may be struggling and so you may not be able to take the necessary action until it is too late.
It is also a good idea to regularly visit your accountant, every quarter is probably sufficient, to make sure that you are on top of everything. If you leave it until year end you could be looking at gathering information from 18-months-ago.
Pay on time with Employer of Record services
This is one area where you should definitely run your business finances as you would your personal finances.
If you miss a payment on a loan or a credit card you would fully expect to incur a penalty charge and have it noted on your credit file. Things are exactly the same in the business world and if you are late with payments, you may find that your credit score is affected (this can also affect your personal credit score if you don’t decrease your personal liability) and suppliers may be reluctant to offer you credit or even do business with you if you are viewed as being unreliable. Goodwill goes a long way in business as it does in life. If the payment not done timely then business can lose trust and trust is the key.
Obviously, there is more to starting up a business than has been outlined above and there is a wealth of start up advice out there but these three rules should see you start off on a sound footing.