Tuesday, March 1, 2016

How Can I Reduce The Chance of my Business Failing?

While it's important to remain optimistic and plan for success you also need to be aware of the things that can go wrong for your business right from the start. Here are sime tips on things to put in place and consider before starting a business to give you the best chance of building a business that will sustain and grow.

· PLAN! If you Google 'Top 10 reasons why businesses fail' you will no doubt see a common theme emerge 'poor planning'. 
A business plan lays out a clear strategy and objectives so you can stay focussed and is essential, particularly when seeking funding from lenders. 

· CONSIDER STRUCTURE - You need to decide on the legal structure of your business – a limited company, self-employed sole trader or partnership - there are lots of options open to you.  Understanding how the structure you choose affects you liability if the business fails is crucial. 

· CHOOSE A NAME - Picking a suitable name for the business can be an exciting step. Ensure you are not stepping on anyone elses toes by researching first that your name is not already in use. If you choose to be a limited company, you will need to register the company name with Companies House.  Registering with companies house or protecting your brand through legally protecting your intellectual property rights will avoid heartache later of another business using your name. 

· LOCATION, LOCATION, LOCATION - If you need premises, look for a cost-effective location that will balance convenience for customers and suppliers with a rent that you can afford to pay.  Could you work from home?  Keeping overheads low will mean less pressure on the business and could make the difference between success and failure.

· REGISTER FOR TAX - There are various taxes to pay and accounts that you need to keep. Seek the help of a tax professional to understand how and when to register for tax, and to make sure that you meet all tax deadlines and requirements.  

· RAISE FINANCE - Sometimes you won't need a lot of initial investment to get started, particularly if you are starting a business that is based on your skills and knowledge such as a consultancy.  However, with some business ideas initial set-up costs can be considerable. If you cannot use savings or loans from family or friends, you could approach a bank. You may qualify for help from schemes run by the Government such as start-up loans, or grants. 

· GET ADVICE - Soaking up advice from professional business advisers as well as more informal mentors can help greatly.  A professional business adviser can help you understand the legalities and logistics of business and how to access finance.  More informal mentors can share their learning and help you to tap into local networks.  Think about those you already know who run a business. What mentors do I have or could I tap?

There is so much to think about it can be difficult to know where to begin. The good news is that FREE advice and support is available to Merseyside residents to address each of these key points.  Contact Enterprise Hub on 0151 706 8113 or enterprisehub@thewo.org.uk to be linked with an enterprise expert near you who can guide you through the process. 

By Business Growth Adviser Huda Mamoun

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