‘Sweat the Big Stuff, Right?’ – Tips for Starting Out in Business
by Laura Macarthy, Now Accounting Services
That is usually the mantra that any new business owner has going on, when they are at the start of their new venture. You know, the big sparkly, endorphin-rush stuff that makes you feel gooooooood – the product or service offering, the sales channels, marketing, fancy packaging, pitch preparation and networking.
What about the small stuff? The stuff that if you leave and don’t get hold of, will soon become the BIG stuff that is coming back and biting it just where you don’t want it?
That is often what a lot of new business owners do with the numbers, the nitty gritty bookkeeping and accounts, that, “hey, well, if I make sure the sales fly, the numbers will take care of themselves, right?”
Errrrrrr. Nope. Nah. Negative. Just, well, NO.
So, when it comes to numbers, bookkeeping and accounts, what is the BIG STUFF that needs sorting when you are starting out?
Numero Uno. Sort out what your legal structure is going to be. Is your business going to be a sole trader? A limited company? A partnership?
There are pros and cons for each, and different requirements for each, so make sure you get it right. A good source of information on each of these, what they mean and look like can be found via this blog, published by HMRC:
Then there are certain bits and bobs that you need to make sure are done, based on your legal structure…. Here are some starters for ten… And is by NO MEANS an exhaustive list!
If you decide to trade as a SOLE TRADER….
- You will pay your tax through a ‘Self-Assessment’ by submitting a tax return, yearly by the 31st January
- To do this, you first MUST register with HMRC for Self-Assessment by 5th October the year after you started your business
- This is easily done via your online GATEWAY account with HMRC
- To find out more, check out this link: https://www.gov.uk/set-up-sole-trader
If you decide to incorporate as a LIMITED COMPANY….
- You need to INCORPORATE your company by registering the company name with Companies House
- You will need to have decided on a name, where it is trading from, the Directors, shareholders, details of shares and how it is going to be run
- The company then appears on the public record at Companies House
- More information can be found here: https://www.gov.uk/limited-company-formation
If you decide to trade as a PARTNERSHIP….
- By far the most important thing when setting up a partnership is to have a legally drawn up, agreed and signed partnership agreement
- This will state who is in the partnership and how profits (and losses) are to be split (amongst lots of other important stuff)
- Then, as with all things business and tax, HMRC wants to know! So the next step is to register your partnership with HMRC, with the same 5th October deadline as mentioned for sole traders
- You can do this here: https://www.gov.uk/set-up-business-partnership/register-partnership-with-hmrc
Not sure about any of this? Worried you haven’t done what you should’ve done? Hate numbers and are totally ignoring your accounts?
Then our next bit of advice is to find yourself a Bookkeeper and Accountant who can take the worry away and bring professional help to your door. The two words you need to look out for are QUALIFIED and EXPERIENCED. Take a recommendation from a fellow business owner or networking group.
Laura Macarthy is a Director of Now Accounting Services (www.nowaccountingservices.co.uk), a small bookkeeping and accounting services firm in Hampshire. Follow regular updates via their Facebook page.