Are you a new business owner

Are you a new business owner, or someone who wants to start their own business, who wants to know what they need to do to start trading? If you are, you are going to be joining many other people in exactly the same position. The hard thing, for people like me is, there isn’t a standard answer for everything, but there are some trends, or topics, that should certainly be considered very early on.

What form will your business take?

The form your business takes will be important as it sets out many of the things that business will need to abide by. There are some relatively constant ones, like VAT for example, but many others depend on what form the business takes.

Whether you are a sole trader, a limited company, a partnership, a Community Interest Company, or C.I.C., or a charity (and these are just the simplest choices), there are guidelines and laws to follow. Some need to be followed immediately, and some as you grow and reach a certain size, and this basic choice sets the scene for pretty much everything you do next.

The most troublesome thing, for someone like me, is this plethora of options means there isn’t a one size fits all approach and there is another basic choice that affects what is considered essential. The ethos your business will follow

Attitude and the Company Ethos

The attitude of the business owner, and sometimes the directors and/or partners, unconsciously sets the ethos of that business. The industry the business is in will be a factor in determining that ethos too, but essentially if the owners are of the opinion that “I will sort something out when I get caught out by it” – which I have come across so often – that is what sets the scene.

The attitude the owners, and senior managers, have will permeate through the whole business and the ethos can have either a positive, or negative, effect on the business. Staff can leave too often meaning training costs (this includes the time element of manager(s) to do the training) are high, service delivery is interrupted, and the reputation of the business is, ultimately, damaged.

Another way of looking at this is; How many risks is a business owner willing to take before they do something about mitigating, or minimising, them? Having insurance will not, in itself, be the answer to everything as you need to prove competence to successfully claim on an insurance policy.

Risk appetite is often the friend of those that wish to take advantage of a company, whether it’s staff who claim constructive dismissal because of perceived unfair treatment, or those that wish to discredit a company by leaking, or stealing, important information it relies upon to retain its competitive edge.

Plugging the Holes

The owner and, where a business has them, the senior managers are generally seen as the ones who need to set the standards and plug any holes that could otherwise cause misunderstandings. There are some regulations that will penalise owners and senior managers if the expected habits of people of such rank in a business are not met.

Setting standards mean writing them down. Yes – I hear the groans, but strategy, policies, procedures, and manuals set the record straight as to what the expected standards are right across the business. It re-enforces what good looks like and that it’s good to report things that look broken. It may not be anyone’s fault as an update to Windows 11, or whatever operating software your devices run on, can cause an error in another system.

I was using independent external servers, while I was using Windows 10, to automatically back up my information to, but these pieces of hardware were incompatible with Windows 11 so I had to change what I did.

Practicalities

The final thing to mention for this section is the practicality of including others you rely upon, like your accountant, will need to know how you have chosen to operate your finances. Yes, they will give you loads of advice and options, but it is down to the owners and senior managers of a business to make the choice as to how things are done. For example, where is the line between expense and investment? It is possible that distinguishing such things can affect your accounts, and therefore your profitability, for a few years to come. This is normally an advantage, but it can also affect you detrimentally too.

You need to keep on top of things by writing down any exceptions to your normal actions, for such things, and send them to you accountant. This time of activity is called governance and is an important part of managing your business. is the

How Governance Works

Governance is one of those things that many people see as something that gets in the way of them making money and being profitable. Don’t forget that as a director, partner, trustee, of a particular organisation, it is your role to determine and follow the rules appropriate to the industry you are in. There are many things a director, partner, or trustee can be personally penalised for by not ensuring appropriate actions were taken to prohibit certain actions, or ensure particular actions were monitored and controlled.

You want to make a profit, which means understanding the relationship between marketing, sales, income, process and profit. You should have set targets for income and to check how much profit you make from the income received in any one month, or year. If you don’t, most businesses will run out of cash at some point, and everything will be over far quicker than it was believed/hoped it would be.

You can’t check what isn’t already written down. Yes – it is cracked record time, but without writing things down and seeing how a change in something that you are doing affects income and/or profit your growth will not be as much as it would otherwise be – particularly over time.

Is This Just a Myth?

There’s an old Harvard study that said the minority of people that actually wrote down their goals (and I think that was either 3% or 5%) achieved 10 times more than all those that didn’t write anything down. This is proof that “Fail to Plan – Plan to Fail” is a real thing. Essentially, the better your plans the horizon of your achievement grows.

Those that review and change their plans seem to do the best. It provides a reference to prove whether a course of action is right, or wrong, and you can change course relatively quickly rather than being forced into a corner because of lack of funds, sales, profits, or all three.

There is a lot of useful information in here, but based on my previous blogs, some may consider this one is quite light on detail. Please look through the other blogs here Blog – Eye Bray Limited. The information you want may well have been provided already. Some of what I provide is very detailed.

We would be pleased to answer your enquiry through enquiries@eyebray.com, by calling 0743211611, or 020 3026 5600.