These notes are for guidance as to principal matters to be covered when setting up a new business. They are intended to prompt your consideration and provide a starting point for your agenda.
There are many other Net Lawman advice and information pages relevant to a starting-up a business. Go to the end of this article to find the list of relevant articles.
Decide on a business structure:
Is it to be sole trade, partnership, or limited company or Limited Liability Company?
Prepare a business plan:
What is the business?
Who will buy the product or service?
What are the strengths and weaknesses of the business?
Why is this good business idea? What is the opportunity in the market place? Why is the opportunity present now?
What difficulties do you consider might arise? What might cause them? How will you deal with them? What will be their effect on the business?
Three-year budget and cash low forecast. (Often very difficult at the outset, but banks like to see a medium term plan.);
Capital requirement and funding proposal. How much? Where from? How long? What cost? How will you repay?
Who will be shareholders? Are the minority shareholders happy with proposals? Have you a proper shareholders agreement to record exactly what you have agreed?
Who will be directors? Are directors aware of their responsibilities as directors? If not employees, what will they be paid? What will you are paid?
What other staff will be needed? At first? Later?
What space will be needed? What will it cost? What other terms?
Prepare a marketing plan:
Three-year plan required, to support the business plan;
Analyse sales by customers / sources of sales;
Analyse sales by product or service;
Remember extra staff when needed;
Remember VAT. It is easiest to work net of VAT in all figures, so remember to reduce consumer sale prices to reflect this;
Look realistically at marketing costs - do your homework and be accurate.
Assess adequacy of funds and make sure money in place before it is committed.
Who will be included?
Decide who, if anyone is to be included - as a partner, director, or employee. Remember that an employee has a large package of "rights" immediately and therefore the administration and practicalities of hiring additional help might be more challenging that previously thought. If more than one person is involved, decide precisely on areas of responsibility for that person, the method of communication you will use, and matters for mutual agreement. Set up a contract of their and your terms. Later down the line, if anything goes wrong, this might save you time and money.
Decide what will happen if you fall out with any other person involved
Work through each other person in turn, in your mind. What issues might cause a problem? Crack them now? If there is a split - who would get what? Will the likely outcome be fair? What will happen if you cannot agree? Again, perhaps make a contract now for prospective people to sign alongside you so you all know where you stand.
Find premises:
How much space will be required?
How certain is the requirement?
What about expansion?
What about disaster?
Is space available on a short lease, so that you can move to larger or smaller if necessary?
Fix a firm but generous start date around which all arrangements will be made.
Assess telephony and Internet requirements and obtain quotations from suppliers.
Assess requirements for other services and obtain quotations from suppliers.
Precisely, list products or raw materials and obtain quotations from suppliers.
Check delivery arrangements, payment arrangements, availability, and continuity.
Buy Net Lawman documents and prepare them. Include partnership agreement, or company documents, shareholders' agreement, terms of trade, privacy policy, contracts of employment, and others. See below for details.
Register for VAT if turnover likely to be more than £55,000.
Write to banks for quotations.
Appoint accountants and solicitors as required (not necessarily now).
If by chance you find some error of law or fact in any Net Lawman information page, do please tell us. We should also welcome your suggestions for new subjects for information pages. These notes:
Do not provide a complete or authoritative statement of the law;
Do not constitute legal advice by Net Lawman;
Do not create a contractual relationship;
Do not form part of any other advice, whether paid or free.
