The New Entrepreneur's Guide to Setting Up and Running a Successful Business

Paul Kendall

• Publisher: Productivity Press
• Year: 2018
• eBook ISBN: 9781351015851
• Topic: Business
• Subtopic: Business General
• Index: Business

This is the book you will need if you are considering setting up your own business. It is aimed at the new business owner who has a lot of questions to ask. It has been written by a successful business owner and provides advice on what, and what not, to do.

While it is not intended to be a global reference book it does provide the reader with practical answers to the issues they will come across everyday, and includes examples of successes and failures from both the US and U.K. perspectives.

Chapter 1

Introduction

If you’re reading this, you are seriously considering setting up your own business, and you’ve got lots of questions that need answers. This book should provide you with most of the answers you need, and save you thousands in professional fees.

This book will also help prevent you falling into the traps that many unsuccessful businesses have found themselves caught up in. It’s not an easy job to grow a successful small business, and it’s for that reason I have included a few cautionary notes to stop you wasting what little time and money you have.

With regard to your planned business startup, the figures are stacked against you before you start, as 90% of new businesses fail! Read on and let’s see what we can do to ensure your business becomes one of the 10% that make it.

Even if you don’t make it on your first attempt (as you’re not a quitter, you’ll try again!), what you learn from this book will ensure that your dreams will become reality somewhere down the line.

The Aim of This Book

The aim of this book is to provide you, the new business owner, with sufficient knowledge to successfully run your own business. It also aims to provide you with an insight into the level of knowledge of taxation, general management and the legal framework that you will need to successfully grow your business.

Who Will Be Interested in This Book?

Although this book will be of interest to those already running their own business, it has been written primarily for the benefit of those planning to set up a new business.

Much of the content relates to business owners operating as

Sole traders

Expense-sharing arrangements

Partnerships

Limited companies

The distinction between these different arrangements and the tax and legal considerations of each will be explained in full in Chapter 3.

New Business Startups

I have already referred to the high level of failure in business startups. To give you a further insight into the failure rate, I would like to add some information from the Small Business Administration in the USA regarding the longevity of new business startups.

They discovered that 7 out of 10 new businesses survive at least 2 years, half at least 5 years, a third at least 10 years and a quarter last 15 or more years.

However, this doesn’t appear to have dampened the desire of entrepreneurs to try, as the number of new businesses continually being set up is phenomenal.

There are always entrepreneurs who will continue to identify and take advantage of every opportunity available to make a profit, with a staggering 100 million businesses launched worldwide each year.

In the 10 minutes or so that you’ve taken to read to this point, over 1900 new businesses have been created, and sadly over 1710 new businesses will have ceased trading.

This high level of failure does not put off those who wish to start their own business, as the desire to set up in business, especially among people in their twenties and thirties, has increased significantly in the last few years. Figures that I have obtained from Companies House in the UK of new businesses that recently incorporated clearly show this trend (Table 1.1).

Table 1.1 UK Business Incorporations

Year	New Incorporated Businesses
2016	658,000
2015	608,000
2014	581,000
2013	527,000

The number of new company registrations in the UK in 2017 to date (July 2017) exceeds 305,000.

The data does not show the real picture regarding the number of new startups in the UK, as this data is restricted to those businesses which have decided to incorporate (Chapter 3). There will have been hundreds of thousands of other startups in 2013 to 2016 that didn’t consider it appropriate to incorporate.

Further, the figures show that new company registrations are growing at a startling pace right across the UK, with Central London showing incorporations of 500 per 1000 residents. The particular reason (the gig economy) behind this high level of incorporations will be discussed in detail in Chapter 5.

Interestingly, information from the Official Records Office in the UK also shows that there has recently been a decrease in the number of businesses failing, with a 4% reduction in company liquidations.

These healthy figures are not impressive, though, when compared with those coming from the USA where 543,000 new businesses are being set up each month. The UK figures are encouraging, however, given the political upheavals (such as Brexit) that have taken place in the last few years.

What are the reasons for the increased activity in new startups?

There has been a move by governments to outsource a number of their services to subcontractor businesses as part of cost-saving exercises. (We will look at the growth in subcontracting in detail in Chapter 5.)

These arrangements can often result in the governments in question circumventing their own employment legislation and avoiding expensive commitments (which can then become the problem of the subcontractor businesses!).

Another reason for the increase in the number of new startups is the number of graduates leaving education looking for a career, and on finding that there are few opportunities available decide to set up their own business.

It is also very easy to set up an online business from home, and relatively easy to obtain finance.

Government Assistance for New Businesses

At the moment, there is a lot of political will to encourage more new startup businesses, with grant funding, subsidies, assistance raising finance, exemptions from statutory reporting and tax incentives available to those who are willing to take the plunge. So, there couldn’t be a better time to start.

Assistance with financing means that it is less risky now than it has been to start a business, as governments in some cases will underwrite startup loans.

Businesses can now be set up and registered in a matter of hours, as regulations have been relaxed.

I would advise that you take advice from a qualified business adviser in the area you are considering your startup, as to the assistance currently available locally. There is also a lot of advice available free online, but be wary of who you are taking advice from as there are plenty of rogues purporting to be more able than they are.

Governments have cottoned on to the fact that today’s new startup businesses become tomorrow’s major employers and taxpayers and have realized that by taking an active role in the creation of new business, they are ensuring a thriving future economy. Often, their involvement is not purely altruistic, as they find they have to fix economies that they have broken with their own policies.

The following details from the US Small Business Administration show how key small new startup businesses are to the economy. They define small businesses as enterprises having fewer than 500 employees, and there are 28 million of these businesses in the USA.

These small businesses employ over 50% of the US working population (currently 120 million individuals).

Sixty-five percent of new jobs created in the USA since 1995 have been created by small businesses.

Fifty-two percent of US small businesses are home based, with the fastest-growing sector being freelance businesses.

Government support in the form of innovation vouchers that subsidize advice for startups, and Entrepreneurs Relief, which reduces tax for business owners looking to sell their businesses, has helped more people to set up their own business.

So, with the level of assistance available at the moment, this is a good time to start a business.

I have already referred to the fact that businesses are increasingly being founded by people in their twenties and thirties. Figures from the Companies House UK website show that in 2017 almost 400,000 companies in the UK were founded by someone born during or after 1982.

Success Stories

My ...

Table of contents

• Cover
• Half-Title
• Title
• Copyright
• Dedication
• Contents
• Preface
• Author
• 1 Introduction
• 2 So You Want to Run Your Own Business
• 3 How Do You Start?
• 4 Buying and Selling a Business
• 5 Staffing
• 6 Taxes and VAT
• 7 Accounts
• 8 Promoting Your Business
• 9 Now You’ve Got a Successful Business: What’s the Next Step?
• 10 How It Can Go Horribly Wrong
• 11 Retirement and Succession
• 12 Essentials to Take Away
• Index