“Not another blog about starting a business?”
While the picture for the UK economy as a whole still seems to be that of a no growth economy, more people than ever are taking the plunge and starting their own business, even as some established high street names are disappearing from the high street, here in Brighton & Hove ‘entrepreneurship’ is the word on many people’s lips.
Statistics show 40% of start up businesses fail within 12 months but our city already has the highest proportion of self employed workers in the country, so is now the right time for you to take the plunge?
“Am I ready to be my own boss?”
There can be nothing better than becoming your own boss. No one to answer to, in charge of your own destiny, no creative constraints, it’s the big dream become reality.
The secrets of becoming your own boss are in the detail. It takes self-discipline, perseverance and determination,ticking these three boxes is a good start. Then break it down and ask yourself the following:
• Am I focused?
• Am I ready to rely only on myself?
• Do I have a great skill or product, is it niche enough?
• Have I built a strong network of people to support me?
Success in business is all about planning ahead and getting it right from the off. Business is also an ever changing process and you need to adapt to changes, evolve with time, and give yourself room to be flexible.
“So, what kind of things should I be thinking about? “
• Understand your market, who your customers are and why your customers buy.
• Focus on how your business will work, its systems and schedules
• Plan by creating a road map of where you want the business to go. “To fail to plan is to plan to fail”
• Plan to measure your failure and your success, remember cash is king.
• And finally, be realistic and don’t stand still. You won’t be booking that holiday to the Bahamas’ for a while yet.
“I’ve got what it takes to become self-employed”
Great! (Here comes the accountancy bit)
Step one: register with HMRC before the 5 October in the tax year you started. Registering is easy and can be done online.
Step two: register for Class 2 National Insurance, this NIC pays towards your state pension.
“Okay, now what?”
As you’re self-employed you need to complete a personal tax return once a tax year. The tax year runs to the 5 April each year. Returns need to filed and paid online by 31 January after the tax year. Be aware though that there are penalties for failing to do so.
Keeping up-to-date records of your performance is vital to your success as a business. It is this information that will feed into your tax return and help you manage your business efficiently.
“Hands Up who hasn’t had that conversation with their mates down the pub where they start advising you on what you can claim?”
Yes you can offset your business costs to help reduce your tax bill (and to the unfamiliar this has nothing to do with dodging the Tax Man). These costs must be a necessary business cost such as travelling, working from home, telephone, computer equipment, accountancy costs and professional subscriptions, these are all allowed.
I could go on however why not read more here (Need to insert web link to our start up’s advice page). Next step is best practice of maintaining your on-going business which we will cover in our next issue.
So I ask again, is now the right time for you to take the plunge?