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Spring 2022Setting up a business

Five tips for those who have made the decision and are ready to set out on their business journey

MOLESWORTHS BRIGHT CLEGG employment solicitor, Adam Salkie; head legal cashier, Asya Bibi and trainee solicitor, Aamna Ali reflect on the legal and practical considerations in setting up a business.

1. Be an expert

You must know your product or service and your market inside out. If you are not confident that your product or service is strong and will guarantee business, attend courses and opportunities to learn and develop, do market research where applicable. Alternatively you may work in the field already that relates to your business.

2. Know and understand your structure

Seek professional advice of accountants and solicitors to ensure that the best structure for the business is chosen, whether that be sole trader, partnership, limited company or LLP. This will help you to think about and take further advice on the agreements that you will need in place with business partners, investors etc.

3. Finance

This isn’t a dirty word. In fact it is your friend. You must have a financial plan in place from the start and decide how the company will be funded. Will you invest yourself? Are you going to have someone else invest? Will you be going to a bank? Understand key terms before embarking on a business – turnover, profit, net, gross, revenue. It’s important.

4. Marketing, staff and location

Now that you have sorted the finance, the next thing to consider is how you are going to attract customers to grow your business. You will need to consider marketing, branding, and how you wish to balance online and offline promotions. You might want to begin with doing some competitor research, build a social media presence or create a website. When considering your offline promotion, you may wish to use flyers or newsletters.

Have you ever heard the saying employees are the company’s most valuable asset? This is because employees are a major contributor to profit and value of a business. Therefore, when deciding on employees, take into consideration the nature of your business, potential customers, skills required and assistance needed with employment contracts.

Choosing a business location is an extremely important factor. Did you know that in the UK, only 22% of businesses operate more than one site? This means that the majority of businesses operating in the UK only have one opportunity to make the most out of their location. Think carefully, when considering location.

5. Legal governance, risk management and compliance

Once all the above have been considered and you are ready to start shaking up the business world, you need to legally register your company. Registration requires you to choose which type of business suits your needs: limited company, partnership, self-employed, sole trader.

You will also need to consider what insurances you will need in put in place. Some insurance policies will be legally required. We can also advise you on any protection of ideas and business secrets that may be required.