How am I going to finance my business?
Each business has different start-up costs. Grants are available to those who meet certain criteria, however no business can be started completely with grants as most of them require money from other sources. You may be able to obtain loans from your bank and other sources to satisfy this. The Business Factory can advise you before you start. For more information, contact us at info@businessfactorynt.co.uk or telephone 0191 263 6092.
How can I do my market research?
There are two types of market research, primary and secondary. The most popular form of primary research is conducting a questionnaire. Questionnaires can be completed face to face over the telephone by direct mail and even email. You should aim to gain a minimum 100 replies to get a good indication of the market. Secondary research can prove cheaper and takes less time, however it will not be specific to your situation and there is often too much information available. You should try to use market reports and statistical information to find out past trends in the market.
You can't stop the determined copier (unless you are prepared to go to court). However, it is possible to deter such people by demonstrating that you have IPR (Intellectual Property Rights) and even possibly Litigation Insurance. IPR comes in many forms: Patent; Copyright; Trade Mark; Registered Design; Design Rights; Web Address (URL); etc.
There are three main types of business as follows.
Sole Trader
This is the simplest form of trading. One person is the owner-manager but the business can employ more staff. Many formalities associated with starting up in business are removed if you are a sole trader and The Business Factory Business Advisers can provide further information about this. The liability of businesses that are run under the Sole Trader status remains with the proprietor, which means if the business fails personal assets and savings could be at risk. On the other hand, the trader has the rights to all profits made after tax.
Partnership
Where two or more people are in business together. This type of business arrangement is generally neither incorporated nor registered so it has no separate legal identity. By law, therefore, it is only members of the partnership who can employ people, enter into contracts etc. It is advisable that a 'Deed of Partnership' is drawn up by a solicitor. This legally outlines various issues, for example areas of responsibility and how assets will be split between the partners in the event of ill-health or retirement and ensures both partners are jointly liable. It is possible to trade without a Deed of Partnership but each partner is vulnerable without it. A limited liability partnership is a new form of business entity which does offer limited liability. The main difference between this and a limited company is that it has the organisational flexibility of a partnership and is taxed as a partnership. In other respects it is very similar to a company.
Limited Company
This is a legal body in its own right which usually has a private status. Trading under this status requires certain documents to be submitted by law to the Registrar of Companies / Companies House.
Tax and National Insurance are payable under the Pay As You Earn (PAYE) scheme by employers and employees (including directors). Corporation tax is also payable by the company on any profits made. You are only risking the amount you have invested in your company, rather than risking you personal wealth; hence the term 'limited liability'. If you become insolvent the maximum creditors receive is the shareholder's original investment.
Under what circumstances will I need planning permission for business premises?
If you are running a business from home or operating from commercial premises you should contact your Local Authority Planning Department to advise them of your existence. They will be able to advise you in more depth on planning permission, especially if you are changing the use of the premises, changing the structure of the building or installing plant or machinery as planning permission must be obtained beforehand. You will also have to consider all current building control regulations. Consult your Local Authority Planning and / or Building Regulations Department. In some cases you will need to contact the water and sewerage authorities.
What are the regulatory requirements when starting up a business?
All businesses are subject to some form of regulatory requirements depending on the type of business they are. These will include planning permission, financial issues, health and safety, fire safety, intellectual property, licenses, insurance and employing people if applicable. Our Business Advisers can advise you on which requirements you will need to meet. For more information email info@businessfactorynt.co.uk or telephone 0191 263 6092.
What are the tax implications of being self-employed?
By law everyone has to pay income tax and National Insurance contributions whether employed or self-employed. Self-employed individuals must arrange these payments for themselves. You need to register as self - employed within 3 months of starting up in business to avoid fines. For more information, or to register as self-employed, phone the HM Revenue & Customs New Self-Employed helpline on 08459 154515 or visit the web site at www.hmrc.gov.uk
If your taxable turnover has exceeded the limit stated on the www.hmrc.gov.uk website in the last 30 days or will do so in the next 12 months, you have a legal obligation to register for VAT. However, even if your turnover is below this threshold it may be advantageous for your business to register. For example, if your business requires you to purchase large amounts of raw materials you can claim your VAT back, which in turn may help the business' cash flow. If in doubt speak to an accountant who will be able to advise you in more depth about the VAT implications applicable to your business.
A Patent is granted by a Nation State (e.g. the UK) or a group of countries (e.g. the EU). It is a bargain between the State and you the Inventor. The state gives you a monopoly on your idea for 20 years in exchange for a complete description of how your idea works (called a Patent). In 20 years time every citizen of the State may use your patent for free. You can print your granted patent number on all correspondence, publicity material and the product itself to deter would-be copiers.
You must appreciate that not everything can be patented. It must pass certain tests. To find out what qualifies for a patent contact one of the organisations below.
Unlike a patent (which protects an idea), copyright protects the description of an idea. You do not have to register copyright, just write "© this year, your name" at the bottom of every page (e.g. ©2002, Joe Bloggs). The copyright lasts for 70 years after your death. In IPR terms, Copyright is not as strong as Patent. It is the best protection for literary works, music, instruction manuals, etc.
A trade mark is a sign (e.g. words, logos, photos and a combination of all) which distinguishes the goods and services of one trader from those of others. Most companies would like their products or services to be instantly recognisable by their potential customers. Some companies spend enormous amounts of money to make sure that you remember them, e.g. the "Yellow M" of McDonalds, or the "tick" of Nike.
For further information contact:
UK Intellectual Proper
Concept House
Cardiff Road
Newport
South Wales
NP10 8QQ
Tel: 0845 9 500 505
Fax: 01633 813600
E-mail: enquiries@ipo.gov.uk
Web: www.ipo.gov.uk
Patent Advice Centre
Tel: 0191 260 3250
Fax: 0191 260 3189
Email: patents.advice@newcastle.gov.uk
What should I consider when choosing property?
There are a number of issues to consider when choosing premises suitable for your new business. The type of business you run will obviously have a bearing on your choice:
Location
Which location is best suited to your business type? What can you afford? Is it accessible to your customers, staff and suppliers? How far are your customers willing to travel?
Image
The property must give the right impression to your visitors. Often when starting out, new businesses can't afford expensive offices. However it is vital that your customers can find you with ease and are comfortable in your surroundings. Take into consideration parking spaces and how many you will need.
Competition
Where are your competitors located? Are there any similar businesses in that location? If not, why not? Has someone else tried and failed? With some businesses you may want to be close to your competition to give your customers a choice, for example Estate Agents tend to operate in close proximity to each other.
Security
What security measures are already in place? What will you have to improve? Is it a burglary black spot? This can have an impact on insurance and image of your business. In some cases you can get security grants from your local authority.
What type of Insurance do I need when I start up in business?
It is crucial that you insure your business adequately and comprehensively according to its needs from the outset. It is your responsibility to ensure this. You must remember that the premiums paid for your business's cover are treated as an overhead business expense.
Listed below are examples of types of insurance that may be necessary for your business:
Public Liability Insurance
This covers the business's legal liability to pay compensation for bodily injury, disease and illness to third parties due to activities of the business. It also covers any cost of loss or damage to third party's property due to the business's activities.
Product Liability Insurance
Can only be taken out with Public Liability insurance. This covers the business's legal liability to pay compensation for bodily injury, disease and illness to third parties or loss or damage to their property caused by goods sold or supplied by the business, or that the business has had any dealings with.
Employers Liability Insurance
This covers the business for any injury, illness or disease to employees which has occurred during the course of their employment.
Professional Indemnity Insurance
This cover is specifically for those businesses that give others advice or services (e.g. solicitors or architects). It covers the business for wrong or poor advice it may give.
Motor Insurance
Adequate insurance cover must be taken out for any vehicle owned by the business.
Building and Contents
For premises and equipment and other types of property owned by the business (e.g. computers).
Credit Insurance
Insures a business against other businesses failing to pay. Unfortunately this may not be available for new businesses. There are other types of insurance available. The Business Factory business advisers will be able to give you more in-depth advice and information on these. Please call us to make an appointment.
When I start up in business what Health & Safety issues do I have to consider?
So that minimum safety requirements are met to ensure safety of a business's employees within the workplace, you are legally required to adhere to the Workplace (Health, Safety and Welfare) Regulations. These regulations cover all aspects of the workplace from maintenance of equipment to ventilation, drinking water and facilities for rest and meals.
Why do I need to do market research?
Understanding how your market works is one of the most important pieces of knowledge you can gain before starting your business. Market Research will help you to understand the market and show other people what you know about it. In doing your market research you will find out how many potential customers there are, how much people are willing to spend, where your customers are located and who your customers are. You should also find out who and where your competitors are and if there are any gaps in the market. Without evidence of market research being carried out you will not be eligible for any grant support.
Will Health and Safety legislation affect my business?
If you employ people you have a legal obligation to ensure that you provide a safe environment for them to work in. By law you will have to have appropriate insurances and control measures in place to safeguard all employees. You must have public liability insurance to cover third parties, e.g. contractors and visitors and ensure they are duly advised of any risks. Most businesses should contact the local authority to register for health and safety. You should inform the local authority department responsible for health and safety when you start your business.
