Start ups can be daunting. They can be costly.
Sometimes a few extra pounds spent wisely at the right time can save you money and the viability of your business
Here are four tips to help you on your way:-
Right advice at the right time – and early
Make sure that you get the right solicitor for the advice needed. Specialization matters. Specialisation costs too. However, the advice you will be given by such a solicitor will be invaluable and a worth while investment. The wrong person giving advice could give rise to unforeseen costs in the long run because of their lack of understanding of a niche area. Remember proper preparation prevents poor performance.
Choose the right business structure at the start and keep your eyes open to change in the structure as your business evolves. Speak to your accountants and solicitors to ensure that the entity your have chosen is fit and tax efficient for your purposes. Bear in mind that different business structures will be subject to different reporting or compliance structures.
Make sure you are not breaking the law
“Compliance”. The one word that can send shudders down an entrepreneur’s spine. Working hard to go get business off the ground is all consuming but don’t neglect the law, rules and regulations. All aspects of your business will be under scrutiny and you may need specialist advice. From employment, health and safety and data protection and licence/licenses all need to be reviewed to ensure that there are no potential breaches. A health check by your solicitor as to your processes can provide worth the minimal costs to prevent headaches of any breach.
Protect your business
Get your terms and conditions in order and prominent on your website/invoices. Cash flow is the lifeblood of any business and make sure customers/clients are aware of this. Put all agreements in writing and have same reviewed by your solicitor to ensure that your understanding is the same as the actual legal framework.
Register any Intellectual Property (again get the right advice for this!). These are your ideas, your content or your designs. A specialist solicitor can assist in the protection of these from your competitors.
Make sure that your governance is in place whether by way of partnership agreement, LLP Agreement or your company’s Memorandum and Articles of Association are in place and in line with your wishes.
If in a partnership make sure you have a partnership agreement in place that spells out you and your partner’s obligations. Think for instance what would happen if one of the partners died or left the business? Protect your family too. Lack of clarity means certainty of dispute and again legal fees spent at the outset of a business relationship will hopefully avoid costly litigation fees when things become fractious.
Avoid putting your personal assets at risk. Consider that a partnership the obligations and liabilities are joint and several and whether it may be an option for the relationship to become a limited company. Business borrowings and business tenancies may require guarantees. Think carefully if your lender or landlord seeks personal guarantees which place your personal assets on the line for corporate debts.
Ensure that you have a proper plan for succession ie have a will drafted by your solicitor to ensure that what you want to happens, happens!
Advice sought at the outset and before you commit can prove invaluable. Don’t be put off by initial fear of legal costs as the advice will be the building blocks for a stable, well prepared business. Litigation costs or costs of remedying errors can be very costly and over and above what initial good quality advice would cost.