Category: Setting Up Companies

start-up typing

Step-by-Step Guide to Starting a Business

Posted on | by Jade Donno

Step-by-Step Guide to Starting a Business

Starting a business can be both an exciting and daunting endeavour. With the right guidance, you can navigate the process smoothly and set up your business for success. This comprehensive step-by-step guide will help you understand the essential aspects of starting a business.

1. Research Your Market

Before you invest time and money into your business idea, it’s crucial to conduct thorough market research. Understand your target market, identify your competitors, and analyse demand for your product or service. This will help you refine your business concept and develop a strategy to stand out in the market.

2. Develop a Business Plan

A solid business plan is the foundation of a successful business. It should outline your business objectives, strategies, market analysis, financial projections, and operational plan. A well-thought-out business plan not only helps you stay organised but also attracts potential investors and lenders.

3. Choose a Business Structure

Selecting the right business structure is vital as it affects your legal responsibilities, taxes, and how you can raise capital. In the UK, the most common structures are:

  • Sole Trader: Simple to set up and gives you complete control, but you are personally liable for any debts.
  • Partnership: Involves two or more people sharing the profits, risks, and responsibilities.
  • Limited Company: A separate legal entity from its owners, offering limited liability but with more regulatory requirements.

4. Register Your Business

Once you’ve chosen your business structure, you need to register it:

  • Sole Traders need to register with HM Revenue and Customs (HMRC) for self-assessment.
  • Partnerships also need to register with HMRC.
  • Limited Companies must register with Companies House and HMRC.

Ensure you also register for VAT if your business turnover exceeds the VAT threshold.

5. Set Up a Business Bank Account

Separating your personal and business finances is crucial for managing your accounts and simplifying tax returns. Choose a business bank account that suits your needs and offers the best benefits.

6. Understand Your Tax Obligations

Understanding your tax obligations is essential to avoid penalties and ensure compliance. As a business owner, you’ll need to manage various taxes, including:

  • Income Tax (for sole traders and partnerships)
  • Corporation Tax (for limited companies)
  • Value Added Tax (VAT)
  • National Insurance Contributions

Consider consulting with an accountant to help you manage your tax affairs efficiently.

7. Obtain Necessary Licences and Permits

Depending on your business type, you may need specific licences and permits to operate legally. Check with your local authority and the UK Government’s licence finder tool to identify the requirements for your business.

8. Set Up Your Accounting System

Efficient bookkeeping is crucial for tracking your income and expenses, managing cash flow, and preparing for tax filings. Invest in accounting software or hire an accountant to ensure your records are accurate and up-to-date.

9. Create a Strong Online Presence

In today’s digital age, having a robust online presence is vital. Develop a professional website, create social media profiles, and utilise online marketing strategies to reach your target audience. Consider investing in SEO to improve your website’s visibility on search engines.

10. Develop a Marketing Strategy

A well-planned marketing strategy helps you promote your business, attract customers, and generate sales. Identify the most effective channels for your business, such as social media, email marketing, content marketing, or traditional advertising.

11. Network and Build Relationships

Networking is an essential aspect of business growth. Attend industry events, join local business groups, and connect with other entrepreneurs to build valuable relationships. Networking can lead to new opportunities, partnerships, and support from fellow business owners.

12. Monitor and Adjust Your Business Plan

Starting a business is an ongoing process, and it’s important to regularly review and adjust your business plan. Monitor your progress, track your financial performance, and be open to making changes to adapt to market conditions and achieve your business goals.

Conclusion

Starting a business in the UK requires careful planning, research, and execution. By following this step-by-step guide, you can lay a strong foundation for your business and increase your chances of success. Remember, every business is unique, so tailor these steps to suit your specific needs and circumstances. For personalised advice and support, consider consulting with experts at 1 Accounts.

start up typing

Essential Financial Tips for Start-Up Businesses: Setting Up for Success

Posted on | by Jade Donno

Essential Financial Tips for Start-Up Businesses: Setting Up for Success

Starting a business is an exciting journey filled with potential and opportunity. However, one of the most critical aspects of ensuring your start-up’s success is having solid financial foundations. Here at 1 Accounts, we understand the unique challenges faced by UK entrepreneurs. This blog will provide essential financial tips to help you set up your start-up for success.

1. Develop a Comprehensive Business Plan

A well-structured business plan is crucial. It should outline your business goals, target market, competitive landscape, and financial projections. This document is not only essential for securing funding but also serves as a roadmap for your business. It will help you stay focused and make informed decisions.

2. Understand Your Funding Options

There are various funding options available to UK start-ups, including:

  • Personal Savings: The most straightforward form of funding.
  • Government Grants: Programmes like Innovate UK offer grants for innovative businesses.
  • Bank Loans: Traditional loans can be a viable option if you have a solid business plan.
  • Angel Investors: These individuals provide capital in exchange for equity.
  • Crowdfunding: Platforms like Crowdcube and Seedrs allow you to raise funds from the public.

3. Separate Personal and Business Finances

Keeping your personal and business finances separate is crucial for several reasons. It simplifies accounting, improves tax efficiency, and helps in building business credit. Open a dedicated business bank account and ensure all business transactions are conducted through this account.

4. Monitor Cash Flow Closely

Cash flow is the lifeblood of any business. Regularly monitor your cash flow to ensure you have enough funds to cover operating expenses. Tools like cash flow forecasts can help you predict future cash flow and identify potential shortfalls.

5. Keep Detailed Financial Records

Maintaining accurate and detailed financial records is essential. It helps in tracking your financial performance, preparing for tax returns, and meeting legal requirements. Invest in reliable accounting software or consider hiring a professional accountant to manage your books.

6. Understand Your Tax Obligations

Understanding your tax obligations is vital. This includes registering for VAT if your turnover exceeds the threshold (£90,000 as of 2024) and ensuring timely submission of your annual accounts and corporation tax returns. Familiarise yourself with HMRC’s guidelines or seek advice from a tax professional to avoid penalties.

7. Plan for Contingencies

Unexpected events can significantly impact your business. Having a contingency plan and maintaining a financial buffer can help you navigate through challenging times. Consider insurance options to protect against potential risks.

8. Seek Professional Advice

Starting a business involves navigating complex financial landscapes. Seeking advice from financial advisors, accountants, and legal professionals can provide valuable insights and help you make informed decisions. At 1 Accounts, we offer expert financial advice tailored to your business needs.

Conclusion

Starting a business in the UK is an exciting venture, but it requires careful financial planning and management. By following these essential financial tips, you can set a solid foundation for your start-up and pave the way for long-term success. At 1 Accounts, we’re here to support you every step of the way with expert advice and tailored financial solutions. Contact us today to learn how we can help your start-up thrive.

succession planning text

How Do Family Businesses Ensure Successful Succession Planning?

Posted on | by Jade Donno

How Do Family Businesses Ensure Successful Succession Planning?

Succession planning is a critical aspect for family businesses, especially in the UK, where they play a significant role in the economy. A well-thought-out succession plan ensures the longevity of the business, maintaining the family legacy, and securing the financial future of the next generation. Here’s a detailed guide on how family businesses can ensure successful succession planning.

1. Start Early

Starting the succession planning process early is crucial. Ideally, planning should begin years before the current leader intends to step down. This allows ample time to prepare the successor, ensuring they are well-equipped with the necessary skills and knowledge to lead the business.

2. Involve the Family

Transparency and communication are key in family businesses. Engage all family members in the succession planning process to avoid conflicts and ensure everyone is on the same page. Hold regular family meetings to discuss the future of the business and address any concerns or expectations.

3. Identify and Develop Potential Successors

Identify potential successors within the family and evaluate their skills, interests, and commitment to the business. Provide them with opportunities for professional development, including formal education, mentorship, and hands-on experience within the company. This helps in building a competent and confident future leader.

4. Define Roles and Responsibilities

Clearly defining roles and responsibilities for family members involved in the business can prevent overlap and confusion. Establishing a clear organisational structure with defined job descriptions ensures that everyone knows their role and contributes effectively to the business.

5. Create a Succession Plan Document

Documenting the succession plan is essential. This plan should outline the process of transitioning leadership, including timelines, training programmes, and contingency plans. Having a written document ensures clarity and serves as a reference point for all involved parties.

6. Seek Professional Advice

Engage external advisors, such as accountants, lawyers, and business consultants, who specialise in family business succession planning. They can provide valuable insights, help navigate complex issues, and ensure that the succession plan complies with legal and financial regulations.

7. Consider Tax Implications

Succession planning often involves significant financial transactions, which can have tax implications. Understanding inheritance tax, capital gains tax, and other relevant tax laws in the UK is crucial. Professional advice can help in structuring the succession plan to minimise tax liabilities and protect the family’s wealth.

8. Plan for Contingencies

Life is unpredictable, and it’s essential to have contingency plans in place. What happens if the chosen successor is unable to take over due to unforeseen circumstances? Having backup plans ensures the business remains stable and continues to operate smoothly regardless of unexpected events.

9. Monitor and Update the Plan

A succession plan is not a one-time activity but an ongoing process. Regularly review and update the plan to reflect changes in the business environment, family dynamics, and the readiness of the successor. Continuous monitoring ensures the plan remains relevant and effective.

10. Focus on Governance

Good governance practices are fundamental to the success of any business. Establishing a family council or board of directors, including non-family members, can provide objective oversight and ensure that business decisions are made in the best interest of the company.

Conclusion

Successful succession planning in family businesses is a multifaceted process that requires careful planning, communication, and professional guidance. By starting early, involving the family, and seeking expert advice, family businesses in the UK can ensure a smooth transition of leadership and secure their legacy for future generations.

Starting your own business after redundancy

Posted on | by Jade Donno

Facing redundancy can be incredibly challenging, but it could also be the perfect time to start a brand new career based on your interests, your lifestyle and your aspirations.
Does this sound too good to be true?
With these five steps, we can help you transform your redundancy package into your very own startup:

1) Take advantage of your notice period

Typically, you’ll need to work a notice period. Instead of worrying about what comes next, use this time to start planning your new venture!
Dive into research, enrol in training and network as much as possible. The sooner you can start, the better! After all, wouldn’t you prefer to plan for your future whilst you’re still on the payroll?

2) Develop a business plan

Success is all about strategy, so it is important to develop a business plan.
Every business plan will look slightly different, but the main areas you want to focus on are the:

  • Executive summary – create a brief overview of your business detailing what services you offer and what you intend to achieve.
  • Management bio – this is your opportunity to introduce yourself, your values and your professional experience.
  • Marketing plan – identify your target audience, USP and market competitors before explaining how you intend to attract your desired audience.
  • Financial plan – because you’re just starting out, your financial plan will be primarily made up of projections (sales projections, expensive projections, cash flow projections etc.). Make sure you’re thorough with your research if you intend to achieve accurate estimates.

Your business plan will become the blueprint for your company, so the more information you can include, the better – particularly if you want to attract investors!

3) Address any legalities

To establish a legitimate business, you need to fulfil certain legal requirements. Now, these requirements may vary depending on your business model and industry, so it’s always worth checking whether you need to obtain a specific type of permit or insurance.
You can find these answers by visiting the government website or checking with your relevant industry bodies.
It is also worth hiring an accountant early on to advise you on the financial aspect of your business.

4) Open a business bank account

This next point is directed specifically to our sole traders. Although you don’t have to open a business account, we strongly suggest you do. It will make your bookkeeping 10x easier! So unless you want to waste your time separating your expenses and risk receiving a penalty, you should seriously consider setting up a business bank account.
If you are starting a limited company this is also something you will need to do, however it is essential rather than it just being strongly advised.

5) Set yourself boundaries

Starting a business is an exciting endeavour. However, it can become all-consuming. So for our final point we wanted to discuss the importance of setting yourself boundaries and practising self-care.
Firstly, give yourself some grace. Redundancy is incredibly difficult to navigate, so try not to be too hard on yourself – especially during those early days.
And secondly, start as you mean to go on. Give yourself lunch breaks, take time off and allow yourself opportunities to relax. Only then can you avoid burnout and achieve sustainable growth.

When life hands you lemons, make lemonade


No one wants to be made redundant – but that doesn’t mean it has to be all doom and gloom. Instead, this could be the start of your exciting adventure into entrepreneurship! So take the chance, pursue your passion and totally transform your career. You may just find redundancy works in your favour.

accountant with laptop

15 things you didn’t know an accountant could do

Posted on | by Jade Donno

When asked “What does an accountant do?” many people answer with accounts, tax or compliance work. While that’s true, what many don’t know, is that the good ones do so much more. The best accountants will become a part of your team; they will give you strategic advice to save money and boost revenue, they will help you work more efficiently, and they will not only help you plan for your future, but they will help you get there.

To better answer the question, “What does an accountant do?” here is a taster of what they offer to you and your business.

Things an accountant can do…

  1. Launch a start-up

You need to know that your idea will make money and may potentially need to convince investors of the same thing. An accountant can do that for you plus work out your start-up and operating costs and create credible revenue forecasts.

  1. Manage your cash flow

Getting a stable and consistent cash flow is every business owner’s dream. An accountant can make sure that you always have the money there to pay staff and suppliers, as well as cash reserves in case of an emergency.

  1. Help make you more tax-efficient

Everyone knows that an accountant can help you complete and submit your returns at the end of the tax year. What many don’t know is that they can also help you to lower your tax ethically as well as helping you deal with old tax debts and making sure your books are watertight if you’re audited.

  1. Manage your debt

What loan should you choose? Should you use spare cash to pay back loans or reinvest in the business? An accountant can help you develop a specific strategy to manage debt in a way that is best for your business.

  1. Chase unpaid invoices

An accountant takes the ‘chasing money’ headache away from you by setting up an automated invoice system. When a payment is due or overdue, this will send out automatic reminders to your clients until they pay. Some accountants will even call clients who are very overdue with payments.

  1. Improve your business strategy

Yes, your accountant can help you figure out where you want to go and what’s important. They will work with you to set realistic personal, professional, and financial goals, and then they will measure your progress to help you achieve them.

  1. Budgeting and forecasting

Working off a vague set of numbers can result in irreparable damage to a business. With an accountant, you can work to an exact budget where you know exactly what is coming in and going out, and how much money you have to reinvest, and all in real-time. As well as having the figures at your fingertips, you will also know your figures that you’re aiming for and how long you could last in a crisis.

  1. Writing and pitching loan applications

Applying for a loan is a tedious and difficult process, but not with an accountant. They can pull together your numbers to help you write a solid application, not to mention give you the forecasting figures that will win over any loan officer.

  1. Help you with recruitment and payroll

Should you hire a full-time employee or outsource? Will your bottom line benefit more from a salesperson or a technician? Can you afford to hire and train a new employee? All these questions are important and should be handled with confidence. An accountant can help you make the best choices for you and your business and make payroll easy.

  1. Set up your cloud accounting software

Accountants aren’t stuffy number crunchers who speak a different language, they are tech-savvy and future-driven. Using the best tools out there, good accountants can help you automate your business’s accounting so that you’re always on top of your finances wherever you are. As well as implementing this software in your business, they can also train you to use it confidently.

  1. Help your business run more efficiently

In addition to accounting software, accountants can also help you unlock the power of other applications so that you can start working smarter, not harder. They can help you increase productivity with your invoicing, payroll, customer relationship management, staff scheduling and time-recording etc, and integrate all these tools together to create an effortless workflow.

  1. Improve your inventory management

Many business owners don’t realise how much money is lost due to poor inventory management. What an accountant can do is help you identify the cost of holding inventory and how much revenue is lost, so you can start to place accurate (and cost-effective) orders.

  1. Help you plan for the future

Do you want to sell your business in the future? Do you have a succession plan? Do you want to retire early? All these questions need to be addressed and planned for early on in your business journey. As well as helping you develop a plan for the future, an accountant will keep this larger goal in mind and will help you stay on track.

  1. Listen and support you

A good accountant will become an essential part of your team. They will be your financial advisor for all aspects of your life and will be there to listen and support you whenever you need them (not just appear in your life at the end of the tax year).

  1. Give you peace of mind

Your business, your finances, and the welfare of you and your family are probably the three most important things in your life. An accountant can help ease this pressure, giving you the reassurance and confidence that everything is being done or is planned for. The result? Peace of mind and being able to sleep soundly.

Megaphone with speech bubble

What are the pros and cons of becoming self-employed?

Posted on | by Jade Donno

Self-employment is quickly becoming an area of interest for many people. It’s not surprising really when you hear that UK redundancies hit a record of 370,000 in the last quarter of 2020. As the unemployment rate rises to 4.9%, many people are looking at their options and wondering if now is the time to strike out on their own.

While being self-employed does come with a lot more control over your future, it is by no means a walk in the park. Here are the pros and cons of becoming self-employed.

Pros

  1. You can work when you want – you have the flexibility to decide your own working hours. Are you more productive very early in the morning? Then start early and finish early. As long as the work gets done, it doesn’t matter if you want to take Mondays off.
  2. You can work where you want – all you need is a phone, a laptop and a stable internet connection. This means you can define your own work environment, whether that’s at home, at a café or somewhere else in the world.
  3. You can choose the work that you want – you don’t have to work with frustrating clients, be around co-workers you aren’t comfortable with or work on mind-numbing and boring tasks. You are free to take on the work you are most passionate about and to decide who you want to work with.
  4. You could potentially make more money – your hourly rate is going to be much higher than what you would earn in a full-time job. If you’ve got a full schedule of work booked in, you could be making a lot more per month than you would be employed.
  5. You are always learning – running a business takes a lot of additional skills, so you will always be developing yourself. As well as business skills, you can also take more control over your own learning and development.
  6. You could benefit from tax advantages – many things become tax-deductible if it’s purchased for the sake of your business. These business expenses can even include a portion of your rent and house bills if you are working from home and any asset purchases such as cars.
  7. You have more control over your income – if you want to make more money, you can find more clients. Since you are responsible for your own income, this provides you with more of an incentive to work harder too.

Cons

  1. Hours can be long – you may enjoy your time off work less when you think this time could be spent earning. This may mean that you end up working far more hours than you did as an employee (especially to start off with).
  2. Being alone in your work environment – it can be lonely working entirely alone during the work hours for days and weeks at a stretch. Having no one to discuss work with or share victories or frustrations can be very difficult.
  3. You have to do everything – now you’re self-employed, you have to do all of the work, all of the marketing, all of the bookkeeping and so on. This not only takes up a lot of your time, but it can be quite stressful too. Especially since you can’t ask a colleague for help.
  4. There is no guarantee of work (or money) – unlike a 9-5 job, you don’t know what work you will be able to secure when and for how long. This often leads to a lumpy pipeline (i.e. not being able to win a job for months and then landing 3 at once).
  5. You could potentially make less money – being self-employed is difficult and requires a lot of self-motivation. If you don’t have the drive, then you’re going to earn less.
  6. You will have to work for free – running a business takes time, time to market yourself, quote for jobs, invoice clients, and managing multiple clients and your own schedule. This is time that you’re not getting paid for.
  7. You have no employment rights or a workplace pension – being self-employed means no sick pay, annual leave, workplace pension or company benefits (e.g. a company car, health insurance, gym membership etc). Essentially, any time not working is time not making money.

Self-employment isn’t all smooth sailing

Being self-employed may sound like heaven, but you alone are responsible for whether you fail or succeed. You get what you put in when you’re self-employed, and while this could result in more money and freedom, it takes a lot of self-discipline, motivation, and hard work to get there first.

Have you got a government gateway?

Posted on | by Jade Donno | Leave a Comment on Have you got a government gateway?

The help and advice that is available from the Government is forever changing. This is the latest update we have on how to apply for the self-employed grant. 

For those who are eligible, you will receive an EMAIL, not a letter as we had thought. Be aware that there are lots of phishing emails out there, HMRC’s email does not ask you to click on anything.

If you are unsure if you are eligible please follow this link –  https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme. Please make sure to put capital letters for your NI number otherwise it will fail. If you believe you are eligible but the calculator is failing, please get in touch and we will try and help.   

If you qualify you will be able to claim from the 13th/18th of May. To claim you will need a Government Gateway! 

If you do not have one, please follow these steps to set one up. We recommend you do this NOW to avoid any delays. 

https://www.gov.uk/personal-tax-account

If you have forgotten your username and/or password you can get these reset with HMRC. 

https://www.tax.service.gov.uk/account-recovery/lost-user-id-password/check-email?state=5eb2c2442100008e90c6e413&ui_locales=en-GB 

From what we have seen, we will not be able to claim your grant through our gateway. This could change, but to avoid the delays in getting your grant please make sure your gateway is set up. 

If you need help applying please email jade@1accounts.co.uk