I spent several years working as an executive assistant for companies in the full gamut from micro to large businesses. The company that I work for currently is experiencing some severe legal challenges and I have been privy to discussions that it may be closing its doors. I have made the decision to “take in front” and I plan to open my own business to provide administrative services.
However, having worked in various businesses, and having the experience of occupying different roles, I am truly fearful of starting when I think of all of the things that I will have to do as a team of one (just me). Plus, this situation where my current employer is going under because of legal problems is weighing heavily on my mind.
How can I prioritise the most important requirements to operate a business legally and soundly so that I can have a good chance at entrepreneurial success?
Dear Captain Catherine,
Embarking on the journey of starting your own business can be both exhilarating and daunting. I can see how the transition from being an employee to an entrepreneur might be intimidating for you, especially as you are facing the fallout from issues that have gone wrong on your work ship. You’ve stated that you are preparing for all eventualities by taking the wheel to chart your own destination. Starting your own venture is extremely brave and I love that for you!
Managing a start-up can be challenging, but with the implementation of the right strategies you can increase your chances of success. It is difficult to capture a full discussion of all risks and challenges in this format, however, if I were to summarise the top ten things to review when starting up a new business, they would be:
Business formation and structure
After completing market research and having an evidence-based business plan, the next step is to register or incorporate your business entity.
You’ll need to select an appropriate business structure, such as a sole proprietorship, partnership, or limited liability company, with various options even within these categories.
Consulting a professional for advice may be wise. In my experience, many people locally choose either a sole proprietorship or a limited liability company.
The choice of structure is critical, as each has its unique legal requirements and fiscal implications. For example, registering as a sole proprietorship while continuing employment may affect your tax position. It is important to select the structure that aligns best with your business plan and business model.
Compliance and governance
Many businesses need licences to operate legally, with requirements varying by industry.
The level of compliance and governance obligations also depends on your business structure.
Sole proprietorships have fewer regulatory demands, while companies face more requirements, both initially and on an ongoing basis.
Joining professional organisations in your industry is a good way to stay informed about trends and regulations.
There are different aspects when considering business finances. Two of those are:
– Financing for the business: Depending on the type of business entity that you set up, your business may require capital. You can explore various funding options such as savings, loans, grants, or investors. You should carefully evaluate the advantages and disadvantages of each option. If external financing is going to be coming into the business, you may need to consider whether it is in alignment with the business structure.
– Finances in the business: One of the first few tasks should be opening a business bank account. In my experience, it is much easier to open a business bank account in the first year of business. I’d even go on to say that this “bligh” generally extends up to the first three years of the business. After that time has passed, the level of scrutiny and the expectations are heightened.
Ensuring that financial transactions are done only through the business bank account may be a legal requirement (to prevent commingling if it is a company). Even where it is not, it is best practice and can help with preparing accounts.
Complete records of transactions should be kept and reconciled regularly. It is also necessary to obtain applicable tax identification numbers for the business.
If you employ people, there are statutory obligations that need to be met, such as national insurance payments, health surcharge etc.
You must comply with labour laws and also align with industrial-relations best practices to steer clear of employment disputes. This would include understanding regulations on wages, workplace safety standards, and anti-discrimination laws.
Corporate/business identity and responsibilities
While not a legal requirement, establishing your business’s identity by looking at its vision, mission, and core values as well as the way this is represented through branding can help with keeping the business’s compass on the right side of effective compliance.
Look out for next week’s article which looks at the remaining tips to your query.
This article was submitted by the Association of Female Executives of TT (AFETT).
AFETT is a non-profit organisation formed in 2002 with the goal of bringing together professional women and engaging in networking opportunities, training and business development.