The leap to a new enterprise?11 March 2020
A new decade (and a leap year) has arrived in 2020 and some have paused to reflect on their work life and the way their future employment might be modelled. Staying an employee for many has its merits, with the comfort of a monthly salary and benefits to rely on. But the corporate world usually involves a hierarchical structure which means that reaching 'the top', in whatever format that takes, can take significant time and energy.
Others, understandably, see the new decade as a time to look to new enterprise options and to start their own business. This might be a leap from employment or self-employment to a Limited Company or Limited Liability Partnership (LLP). However, I use the word 'leap' carefully, noting that it is usually exactly that. And anyone considering this move to establishing a new company will know that the change takes time and planning, usually with the support of some professional services, such as accountants, solicitors and financial planners.
What might be your motivation? Some examples could be:
- To earn money to help the family
- To build a business you could sell, or franchise out as a model / creating a brand
- To grow a business to have a team who will add to a bigger income / profit position
- To have a business to pass on to the family
You may well have other reasons, sometimes positive, sometimes negative, that may be your personal motivators.
What might need to be considered? The following is not an exhaustive list…
What's in a name? Well, usually quite a lot and checking that no one else is using the name first can save a lot of time. Looking at the Companies House register is a great place to start (but other checks are recommended) before starting a process of building any brand / branding you plan. You would not want to be disappointed if you found that someone has the trademark and will stop you from using your planned name.
Website & Social Media?
What do you want to communicate above all to web visitors? Have a look at websites that you like and narrow these down to three sites. You are looking for a style that reflects what you want to achieve / how you want to be regarded, rather than the content. You are likely to need regular updates and topical blogs to keep the content fresh.
You can spend a fortune on marketing and will be approached every day to spend cash on an advert. Be careful with your strategy because young businesses are usually cash hungry in the first year or two.
Accounting & Legals?
It can usually be beneficial to speak to an accountant at the outset about what you want to achieve, the levels of business you are likely to create and the type of business structure you would want. They can then guide you accordingly, also taking into account other important issues such as VAT registration, if required. Accounting software will be needed, and you will need a business bank account when ready, and an accountant can usually guide you on these points, along with the registration of any business documents.
Data protection is paramount and would need to be reviewed regularly. Professional Indemnity (PI) Insurance and cover, along with liability insurance is also something to consider, based on the type of business you plan to run.
The above is not an exhaustive list of points for a new business to consider, but certainly provides a flavour of the elements that are worth considering. Planning is key to the launch of a successful business and we believe that setting it right at the outset will usually save significant time later.
Its also important to consider the loss of benefits that may occur if you are moving from employment to a new company. You may lose death in service benefits, pension provision and health protection cover in the switch and these should also be considered.
We hope that any new enterprise you establish flourishes in the roaring twenties!
No individual advice is provided during the course of this blog.
Keith Churchouse FPFS
CFP Chartered FCSI
Chartered Financial Planner
Chapters Financial Limited is authorised and regulated by the Financial Conduct Authority, number 402899