Thinking Of Starting A Business?
Make sure you start on the right foot ...
Posted by Maureen Windridge on 26/12/2013
These days, more and more people are considering the benefits of starting a business. Does becoming Master or Mistress of your own destiny appeal to you? Becoming self-employed or forming a new company might be one of the best decisions you ever make, however there are lots of elements which need good consideration ...
retiring to a tropical island may be your vision in starting your own business
So, you've decided that you want to start a business; what are the reasons? And can you afford it? Maybe you are finding the economic situation pretty dire; you can't get a job and you need to earn a living? Maybe like Steve Jobs you have a passion and a desire to enable the world to share in your vision? Maybe you want to build wealth and one day retire to a tropical island
Whatever the reason there are practicalities to think about and some simple steps to take to ensure that you get off on the right foot, if - indeed - running a business is for you!
The process recommended by MW Bookkeeping is:
- Prepare a personal/household budget. The purpose of this is:
To see where your money is going
To help you make decisions about economies, if and where they can be made
To enable you to know how much money you need to make from your business. This a good starting point for preparing your business plans
- Prepare a cash flow statement for your business - as it is now, if you have already started - or as you envision it if you haven't. Then go through the steps above for your business
- Have a think about your hopes, plans, dreams and aspirations for the future of your business
- With the knowledge gained at 1 and 2 above, start preparing a business plan with a cash flow forecast for your business
You've now begun to build good starting blocks for your future business planning and financial records.
If you should want to go down that route at a later date, the records you are creating are starting to form the foundation of a model that could help you to franchise the business.
If your intention is to create wealth in your business, so you sell it and retire, you need to keep records that show the success of your business and the potential for further growth.
If your reason for starting a business is simply the need to earn a living you still have to keep records that will prove to HMRC that your returns are accurate. These records, by the way, have to be kept for a minimum of 6 years.
Whatever your reason for starting your business, records are important. The system you use for keeping the records does not have to be complicated, it just needs to be appropriate for your business and for your plans for the future and enable you to comply with statutory obligations.
People dipping their toes into the water of entrepreneurship for the first time regularly seek advice from MW Bookkeeping and ask for assistance in setting up and maintaining the records which are important to the successful running of their new Company. Why not give me a ring on +44 (0) 1908 692378 and let's chat about how I can help you with your bookkeeping needs?
Until next time ...
I consider myself to be incredibly lucky because I am a bookkeeper. At the age of thirteen I did a three year course in three months and passed with distinction. Many years have gone by since then and I am still fascinated by the process of double entry bookkeeping. A process developed over 500 years ago by a venetian monk called Luca Pacioli.
Many people would like a machine that they could put all their paper work into at one end and it would come out the other end all sorted totalled and balanced. I'm glad it hasn't been invented because it would take all the fun out of my work!