BOLA - Scope of Business Start-up Planning

The Business Plan as a Model.

Anyone starting up a new business must assess every aspect of the proposal and think through how it might fail or (hopefully) be successful. To raise capital, your ideas and plans must be explained to others (the bank, potential partners/investors, advisers) - even yourself. The business plan should do this. Producing the plan checks out the feasibility of your ideas and anticipates the risks. The plan is an architect's plan/model for the business start-up. The architect's plan needs a bill of materials, a schedule, planning permissions, a budget etc. It guides the constructors.

Who are you and what do you want?

Do you really have what it takes - the drive and energy, the constancy to carry it through? Be honest about your skills and abilities. Are you tough enough, organised enough, willing to work long hours, endure incredible sacrifices and risk losing everything - home, savings, perhaps even family?

These may not come to pass but have you really contemplated the hardships of the journey?

What kind of business and why this type?

Will you be a Sole trader? You carry all the risks. The Inland revenue and Social Security must be informed that you will be working for yourself and the date you start trading. You are totally responsible for starting up and raising all the capital. You have unlimited liability for the debts of the business.

Partnership - You carry the risks and now must work with others who can let you down. They may even want to pull out or block your decisions! Although not compulsory, approach a solicitor and set up a partnership agreement. This even applies between family partners. Each partner has unlimited libaility for the business's debts. Hence in a dispute between partners, the rights of each party will be clear from the partnership agreement? If there is disagreement

How will decisions be reached? Is a partner sleeping and perhaps with limited libaility?
How much £ does each partner put in, what % of the profit does each get
What happens if a partner wants to withdraw?

Limited company? A legal entity separate from its owners. Owners of the business equity have limited liability (for the value of their shareholding). Profits are subject to corporation tax. PAYE and national insurance contributions must be administered for employees.

Trading name and Logo
The business's name should project its identity and image. Clients need to like and understand it e.g. Trotter's International Traders, C. Rimer Security, Yoakam Yoghurt, Bakersfield Pies. Try answering the telephone using the company's name e.g. "Firth, Ackroyd Reno Billericay Boiler and Steam Generation Design Associates - can I help you?" Is it easy to say? Does it roll off the tongue or abbreviate well? Try the acronym? Will it be remembered? Do others warm to the name?

You will need letter-headed paper, business cards, invoices, order forms etc. A sign on your van or factory unit will be useful. You may wish to present your trading name with a nicely selected font or design a graphic logo (iconic representation). Make sure your logo communicates the company well. Evaluate its eye-catchiness. Will the name and logo work? Could the name and logo be misinterpreted e.g. if you trade in an overseas market? Will it match the test of time?

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