Thu 01 / 04 / 21
Everything you wanted to know about running a business, but were afraid to ask
Want to run your own business, but aren’t sure where to start? Mark Crowter from Galloways Accounting has put together the key takeaways from a recent session with Julia Chanteray from Joy of Business, looking at the things you wanted to know about running a successful business – but were afraid to ask.
By Mark Crowter of Galloways Accounting
Earlier this month, Julia Chanteray from The Joy of Business, and Mark Crowter from Galloways Accounting, joined Brighton Chamber for a session to discuss everything you wanted to know about running a successful business. They shared practical tips, advice on finding the right clients, focusing your time, plus structure and tax.
In case you missed it or want their advice as a reference point, Mark has put together their 12 tips for starting out, and considerations for structure and tax.
12 tips for starting out
1. Find your purpose
If you can find the source of your ‘why’, you’ll have the sense of purpose to keep going when things get tough - and they will get tough!
2. Work in your genius zone
If you can spend your time working with your innate natural talents, you’ll find you flow much easier and have a much greater sense of inspiration.
3. Find and work with the right clients
This is an important point, especially for service businesses. Early on, you are the product. This means your customer base is going to be really limited, as you’re constrained by how many clients you can service.
If you’re spending time with people who don’t get you, clients who want to chip at your price, or don’t value your input – it’s time to find new clients.
4. Listen to and trust your judgements
A lot of people who will be trying to support you won’t get your dream and will be advising you from a place of fear. If you can listen to and trust in your own judgements, you won’t have to carry their doubts.
5. Get your pricing right
There are a lot of good materials out there on pricing and it’s a constant learning process. Know your budget and you’ll know where your price needs to be in order to keep you paid.
6. Keep on top of cash flow
Early on, the key to keeping on top of the cash is being organised and staying up to speed. Keep track of who owes you money and know who you owe money to. You’ll need to be checking the bank regularly because cash is king.
7. Investment is opportunity
If you’re going to spend cash, make sure it’s an investment. In order to grow a business, it’s most likely you’re going to need to borrow money. Make sure you see this as an opportunity, not as a risk. If you shy away from borrowing, you’re going to slow your growth right down.
8. Spend time on marketing and your sales pipeline
We all like focusing on the delivery of our products or services. But if you’re the work winner, you need to make sure you don’t get sucked into the doing, over building out your network and your sales pipeline.
9. Organise, prioritise and know the value of deepwork
There are going to be a lot of pressures, pulling you in a lot of different directions. Managing your time, your priorities and holding reserved blocks of time for ‘deepworking’ are going to allow you to get through that ‘to do’ list.
10. Watch out for the opportunity costs of overservicing
If you do more for a client than they are willing to pay for, you’re spending your time doing something complex or difficult for free, instead of building the pipeline, monitoring the cash or getting in to the deepwork. Be very careful of scope creep as you can lose hours of time which could be spent on something constructive.
11. Run your own race
You will have a sense of you own goals and objectives. By getting sucked in to competing with others, who may be spinning you a yarn anyway, you’re pulling your time and you’re focus from the things than really matter.
12. Set yourself long term goals, in manageable chunks
Think about where you’d like to be in 5 years and what you’d like to be doing. Working back in 6 – 12 month chunks, you’ll be able to answer the question “What actions do I need to take in the next week to deliver on my 5 years goals?”
What about structure and tax?
Sole trader or limited company
This is a really important consideration when starting a business. From a purely tax perspective, at the time of writing, it’s more tax efficient to have a company behind you if your profit is in the £30k - £40k bracket.
Whilst there is a greater level of admin involved in being a limited company, and higher professional fees, it does offer greater legal protection. If you work in a litigious sector, trading through a limited company may help protect your personal assets.
An introduction to tax
Whether you’re on PAYE, a sole trader or trading through a company, whenever cash flows to you there’s likely to be a personal tax charge. The rates vary and it can get complex.
As well as spending more on professional fees, companies also have to pay corporation tax. This is currently 19% but there are plans to increase the rate up to a potential 25% rate in April 2023. This comes off your profit before arriving at what you can take out of the business.
If your turnover is more than £85k for any 12-month period, you’ll likely to need to register for VAT. There are a number of difference schemes and VAT rates, so I would always encourage anyone who is expecting turnover to breach this level to speak to a professional for specific advice.
Galloways help businesses and individuals manage their financial and compliance matters. They provide a full array of specialist accountancy, taxation, payroll, advisory and financial planning services – from complex group audits to sole trader accounts preparation. Find out more about Galloways on their website here.
Catch the Wave is a business support programme for anyone in the city who wants to launch and grow a business, offering affordable workshops, useful resources and mentoring sessions.
The programme runs until July 2021. You can see all upcoming Catch the Wave sessions, and sign up, through the Chamber website here.
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