20 tips for budding businessmen

How to keep clients happy, chase invoices, and balance the books. By Russell Smith
Click to follow
The Independent Online

1. HIT THE WEB

Before you do anything, visit the Business Link website (www.businesslink.gov.uk) and download their "No-nonsense Guide to Government rules and regulations for setting up your business". This'll help you to understand what is involved with starting your own business.

2. KNOW YOUR PRODUCT

Planning starts with defining what you intend to sell - a product, a service or a combination. Look to see if you can sell variants of the same thing to create a range.

3. DO YOUR RESEARCH

Do your market research. And don't be afraid of competition, it shows that there is market demand.

4. TEST THE WATER

If possible, test your business idea by working evenings and weekends before committing full-time.

5. SEEK ADVICE

Attend one of the free Business Link start-up courses or seminars local to you that will help you put together a good business plan and cash flow forecast.

6. VISIT THE BANK

Visit five high street banks. Grab their "start-up" guides and look over their business plan templates and cash flow forecast templates.

7. WRITE YOUR PLAN

Write your business plan and cash-flow forecast. Be realistic about what sales you will achieve.

8. FIND SUPPLIERS

If your business will need to buy from suppliers, talk to a range of them before you start trading. Identify at least two suppliers for everything you will need.

9. FIND AN ACCOUNTANT

Visit three accountants that specialise in small business services and select one. Discuss your business plan and cash flow forecast. Ask your accountant to help with (i) registrations for tax and national insurance, (ii) calculating monthly payroll and, (iii) VAT returns (if appropriate). Get their advice on how to do book-keeping and to recommend an Independent Financial Adviser to help with pensions and insurance.

10. TAKE A SANITY CHECK

Are both you and your accountant confident that you will make a profit? Don't fudge the issue by planning to take out an unrealistically small salary. If you are not confident about making a profit then do not go any further.

11. FINANCE YOUR PLAN

If you need start-up finance then ask your accountant to recommend a good bank manager.

12. OPEN AN ACCOUNT

Set up a business banking account and choose electronic banking - seeing what is in your account at any time is helpful.

13. A SAFETY NET

Although very difficult for most people, do consider setting aside some cash to at least cover mortgage costs for three months. Don't lose your home.

14. MARKET YOURSELF

Before launching your business, write a press release for local papers and radio stations. Consider a "launch event" to which you invite friends, family, the bank manager, the accountant, business suppliers and potential clients. Have an information pack about your business for everyone to take away.

15. LOOK AFTER CLIENTS

When launched, pay particular attention to customer service. It's much easier to sell "repeat" products and services to satisfied clients than to find new clients.

16. STAY ORGANISED

Keep on top of paperwork. Set aside times of the week when you do paperwork such as ordering materials.

17. CHASE PAYMENTS

You are not a bank - make sure that clients pay their bills. Allocate time to chase any late payments.

18. REALITY CHECK

Compare your cash flow forecast budget with actual cash flow in and out of your business every month. If things don't go according to plan then change the plan.

19. THE MID-YEAR FORECAST

Undertake a mid-year forecast when you've been trading for six months. This is no more complicated than comparing your budget against what actually happened and learning any lessons that you can. Meet with your accountant to discuss business performance and suggestions for change.

20. MEET YOUR ACCOUNTANT

Do this at least three months before the year end to discuss taxation and financial planning.

Paying attention to these simple rules will increase your chance of business success. Keep to the disciplines of regular financial reviews with your accountant during subsequent years. Finally, look after your own health - you are the most valuable asset in your business.

Russell Smith is the founder of the Business Boffins consultancy

Comments