Are you starting a new business? Starting a new business can be both exciting and confusing. There are so many things you need to get done and it is so easy to overlook some key steps in the process. So here is a guide to assist you in starting up your business.
Step 1 - Develop an effective Business Plan
Every business is the product of a great idea. However, it takes much more than a great idea to start a successful business. Many inexperienced entrepreneurs get excited about their business ideas and skip this step of converting those ideas into a comprehensive business plan. This often turns into a very costly error for young entrepreneurs. Will you embark on a road trip not knowing your destination or the directions to get there? Not likely. Starting a business is without a plan is doing much the same.
A comprehensive business plan will help you to systematically identify what are all the key requirements to make your business a success as well as to determine the potential feasibility of your business idea. It will allow you to anticipate the market response to your business and plan the appropriate strategies to ensure it excels in the market place. A business plan takes a 360 view of your business idea and the market place improving your probability of success.
A comprehensive business plan will include the following:
Your Vision and Mission for the business
Your business product or service
Your organizational structure and operation plan
Your market research
Your target market
Your marketing and business development plan
Your business risk analysis
Your exit strategy
Step 2 - Select an appropriate Business Name
Your name is very important. Choose a simple name than is scalable. That is a name that will be applicable even when your business grows. Remember for effective marketing, you need to choose a name that will resonate with your target customers. Often entrepreneurs select a name that has sentimental meaning to them but no relevance to their target market. It is always wise to have a name that customers will recall easily as well as a name that speaks to what your business is about.
Step 3 - Register your Business
Your business does not exist legally until you complete the registration process. Some entrepreneurs have operated without being registered however this will mean that your business will not be able to access any facilities or funding designed for businesses. So whilst you can trade, using this approach is extremely short-sighted and will not benefit an entrepreneur who is seeking to build a scalable business.
You can register your business as one of the following options:
It is advisable to seek the guidance of a professional before registering your business so you can ensure that you choose the right option for your business. Registrations are completed at the Ministry of Legal Affairs or can be completed on your behalf by an Attorney or Business Support Service such as Business Lifeline Ltd.
Step 4 - Complete your Statutory Registrations
All businesses are required to be registered with the Board of Inland Revenue. Taxpayers are required to present their Board of Inland Revenue File Number (BIR #) to the District Revenue Office when making payment of taxes. In the case of a sole proprietorship, the business uses the same BIR# as the proprietor. Partnerships and Companies require a separate number for the business. In the case of the Partnership and Company, each Partner or Director will also need an individual BIR # in addition to the BIR number for the Partnership or Company.
Your business also requires a PAYE (pay as you earn) number from the Board of Inland Revenue for the remittance of employee income tax and health surcharge deductions.
All businesses that employ staff are required to also register with the Nation Insurance Board. Businesses are required to pay National Insurance Contributions on behalf of all employees based on their rate of pay. The business pays 2/3 of the contribution owed and deducts 1/3 from the wages or salary of the employee. These payments are due on the 16th of each month for contributions for the month preceding.
Step 5 - Open your Business Bank Account
Every business is required to have a bank account in the registered business name. A personal account cannot be used for business revenue. This can lead to the committing of an offense called 'Co-mingling'. To open your account, you will need all your registration documents as well as three (3) years of financial projections. Your financial projections form part of your comprehensive business plan. If you failed to have a business plan prepared, you will still be required to complete your cash flow projections to open your business account.
Preparing financial projections can be very intimidating for persons without accounting experience. Cash flow projections are a reflection of your business plans in monetary values. As such without a proper business plan, you will not be able to complete accurate cash flow projections. This is an area where many people attempt to guess or put together arbitrary numbers to satisfy the requirement of the bank. This approach, however, is quite shortsighted. Properly prepared cash flows will allow the business owner to plan effectively for monthly revenue fluctuations and will know how much money can be expended without negatively impacting operations at a later date. Great Cash Flows are like having a 'Crystal Ball' into your future finances.
Step 6 - Recruitment & Training
Finding the right people to represent your business is an extremely important step. No matter the job to be performed, you ought to remember that every person involved in your business will have an impact on your customer experience whether directly or indirectly. So you need to choose wisely. An extremely important aspect of your recruitment process is ensuring that you have the following:
Detailed Job Description
Your business handbook containing rules and guidelines for employee conduct as well as consequences for misconduct.
When a new employee is hired, training is essential to help the employee to adapt their skills and ability to the specific requirements of your business.
Step 7 - Commence marketing communications
Here is where the excitement begins! Its time to let your target market know that you have products or services to offer. Your business plan should include a strategy for your entry into the market. This can include a combination of:
Traditional advertising (newspaper, radio or television ads)
Social media advertising
Fliers & banners
Step 8 - Commence operations
Its time to get to work! Starting a new operation is exciting. Remember to daily monitor your results and compare them to your projected results. In the early stages of your business, it is common to be required to make lots of changes to your plans. This is the time to prove whether your market assumptions were accurate. Don't be afraid to make changes if something does not quite work the way you planned it.
Need assistance to get your business started? Contact Business Lifeline Ltd today. Our team of well-trained professionals is happy to support all your business needs.