First steps into business

Planning for success

What structure will my business take?

Differing rules come into play if you plan to work in the construction industry or if your business is to be

• a partnership
• limited company
• a franchise
• limited liability partnership

We will write more about the different types of business, later in the series.

Have you got a business plan?

A well constructed business plan will make your life so much easier. Carefully planning your business direction will allow you to maintain focus, set your own targets and to gauge of you are meeting all your objectives. We will guide you through writing a business plan later this week.

VAT. Should I register?

This decision can be based on three factors;

1. your turnover reaches a certain limit
2. you have taken over a business as a going concern
3. you buy goods from other EU countries.

You can also register voluntarily if you so wish and this may be of benefit to you and your company.

VAT. What is it?

If you are VAT registered, you will charge VAT of 17.5% on many goods and services you supply to customers in the UK and the Isle of Man. VAT is also charged on most goods and services supplied from places outside the EU. Some services are exempt. For more details, contact your local Inland Revenue for details.

There are three main rates of VAT:

1. 17.5% Standard Rate
2. 5% Reduced Rate
3. 0% Zero Rate.

There is also an option know as Flat Rate. More will be written about VAT as we progress through this series.

Our next topic to be discussed will be record keeping and the important role this plays in your business.

First steps into business

The basics

Whether you are thinking about starting up or indeed, your business is already up and running, it is worth taking some timeout to ensure you have done everything you need to do.

This section will inform you of the main areas you will need to cover when you begin trading.

Were you unemployed before your business start-up?

If so, you will need to inform your local Jobcentre that you are starting work for yourself. This needs to be done before you commence and ideally, you should be able to inform them of a starting date.

Are you currently employed or self-employed?

Your status depends on a number of things. These include your terms and conditions and the way you organise your work.

If you are working for yourself you are most probably self-employed. Differing rules may apply if you work through an agency or are trading as a limited company or a partnership. In these circumstances, you may have to pay tax and national insurance as if you were an employee.

Self-employed. Have you registered with the Inland Revenue yet?

You must register with the Inland Revenue within 3 months of starting your business. Failure to do so, may leave you liable to a fine of £100

What about tax and national insurance?

When you become self-employed, you will be responsible for paying your own national insurance contributions. As for tax, after the first trading year, the amount of tax you pay will be based on the profit you made during this period. Each April, you will receive a self-assessment tax return.

Does your company still advertise using 0870 numbers? Are you a customer with a strong viewpoint for or against?

Well, I remember when grabbing an 0845 or 0870 number meant your business looked professional, big, or indeed gave it a corporate image that belied it’s true status.

Now that many telephone service providers, including mobile services, include free calls to any network or a fixed landline, could this be the end for non-geographical telephone numbers (such as 0116 etc.)

I have spoken with quite a few of my clients over the last few months and the camp is till divided.

Many of them like the corporate image an 0870 number portrays but some have ditched this number completely.

Well, here are my two cents as both a customer and a consultant.

As a customer, if the product or service I am looking for can only be supplied by this company and they only use an 0870 number. I will first try and spot any online contact method (form, email etc.) If none are available, then I shall bite the bullet and call them…even if it does cost me Xp per minute!

But if there are other options, they will rapidly slide down my list. Why? Not because I am a tightwad..honest, but because I feel they have not looked at their customer demographic close enough!

As a consultant, I would advise against using this number alone. If you wish to  keep the number then by all means do, after all you have paid for it. But in the interest of your customers, ADD A GEOGRAPHICAL (OR FREEPHONE) NUMBER TOO.

So, as you embark on buying that new company stationery (did I mention you can get free business cards from VistaPrint…), think hard.

What does your telephone number say to your customers.

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