The day you decide to take the plunge and work for yourself will be one of the most life-changing choices you ever make. Whether starting a company large or small or as a freelance from the very first moment of being self-employed you and you alone will stand or fall by your decisions and actions. You will be responsible for steering your business through all its ups and downs, good times and bad times with no guarantee that everything will turn out right in the end.
When you are in charge the buck stops at one place. There is no management line to help with complications no colleagues to share the blame for mistakes, there is only you to deal with any problems that crop up, only you to decide how those problems are dealt with, and only you to face the consequences of your decisions whether they turn out to be right or wrong. Whilst there are many pitfalls and worries in running your own business, there are by contrast also times of extreme satisfaction, personal achievements, financial rewards and periods when everything runs to perfection – it’s not all doom and gloom but it is most certainly very hard work.
There are important issues to be considered by anyone thinking of becoming self-employed and all of them should be given very serious thought. Assuming at this point that you know your chosen field of expertise enough to go it alone, sufficient time to plan the setting up of your business is vital. This part of the process may be a tedious and drawn-out exercise but it is necessary to try and ensure the smoothest possible start to your venture.
The most immediate priority is of course money. When you start working for yourself it is recommended that you have enough funds to support you (and your family if applicable) for at least three months, by which time you should hopefully be generating an income from your business. However, saving this amount of money would not be an easy task and so a great deal of forward planning and patience is an absolute must if you want to make it a viable alternative to a bank loan, especially if you have already borrowed money to start the business.
It is worth bearing in mind that a vast number of companies have a ‘cheque run’ on a designated day of every month to pay their suppliers. If you miss this day because you did not send your invoice soon enough you will not get paid until the next cheque run. Experience has taught me that companies will rarely if ever deviate from this rule. It is in your best interests to send invoices as soon as possible too late and you may have to get by for a month with little or no income.
A must-have for any business is a good accountant. How you choose one is usually a matter of pot luck or a referral from someone you know, the latter usually being the best way to find one. Whilst accountants are not exactly inexpensive, they will save you money in the long term. It would be a huge mistake to think that you could do their job better or cheaper than they could – unless of course you are an accountant yourself.
Many a person has tried to do without one to save money and have found themselves having all sorts of problems with the Inland Revenue because they have not filled in their return forms correctly or made glaring errors in their accounts. It is worth noting however that there are also the odd few small businesses whose financial arrangements are so straightforward that they can get by without an accountant although this is generally not the norm.
Opening a business bank account can be a helpful factor in running your new enterprise. It would be a wise precaution to keep personal finances separate from your business ones and a business bank account will enable you to do that. There are no sinister motives here it simply makes sense to track and maintain company transactions from a dedicated account rather than having to identify and separate them from a statement that contains your personal banking details as well.
A useful point to bear in mind is that a good working relationship with your bank manager is an asset to any business large or small. A new business will find help and advice from their bank manager invaluable. There must be give and take though you do have to be honest with the bank. If you are experiencing financial difficulties in business, don’t try to hide it – inform the bank as soon as possible, they can then decide how best to go about solving the problem quickly.
With your chosen accountant acquired and your business bank account open, two key components of your enterprise are now in place. Other things to think about are premises, equipment, supplies or maybe staff. As the principal character in your new company only you will know what other requirements are needed to complete your set-up in order to commence trading, and no doubt have been giving a serious amount of thought to these particular matters.
Apart from the points already mentioned there are a myriad of other considerations involved in setting-up your business. All of them must be addressed at some point but obviously in order of importance. At times all this may seem like an insurmountable task, but the very fact that you made the decision to work for yourself means that you possess the determination and drive needed to see it through.
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