What you DON'T need when starting a business
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If you're starting a new business and want it to succeed you must have grit and determination, be prepared to work hard for long hours and have an idea that is viable. You also need to be smart with your finances.
When you're starting out in business, it is easy to get carried away and think you need everything all at once. That's not the case though, there are some things you can do without for a while at least. You may need these suggestions at a later date when your business is off the ground and has grown, but to keep costs as low as possible to start with, you can manage a new business without them.
A Formal Business Structure
Different business structures have varying tax advantages, but they are only useful if the business grows to a size that warrants using one of the formal structures. Start off as a sole trader, as while profits are low that is the most cost-effective way. It will not make your tax bill any larger but will cut down on how much an accountant charges you.
A Formal Business Plan
A formal business plan can take time and money to put together. Although a plan is important, you can put something together yourself that will be just as effective. At a later date, if you are looking for investment, for example, a formal plan may be needed, but one will not be necessary at the outset.
A Company Car
You may well have some running about to do for your business but you don't need the expense of a company car just yet. As well as the cost of buying one you then have fuel, and insurance among the many expenses cars create. You could hire one from a company like Ace Rent A Car as and when you need to and save yourself a lot of money in the process. If, eventually you need to travel more, you can then think about buying one. Just remember to document your mileage for tax purposes!
You don't really need an office to start with. You can work from home just as easily and save the overheads associated with renting premises.
Just make sure you record all your home expenses that relate to the business, as you may be able to get tax relief on them.
Click here for tips on creating your DREAM home office.
Employees cost money. Not just for the work that they do. There are things such as sick pay, maternity pay and many other legal obligations. The answer is to outsource some of the tasks. There are freelancers and agencies with the expertise you need for your bookkeeping, accounts, social media management, and just about any other job that you need help with.
The difference between freelancers and employees is that you will only pay them for completed work. You will not have to pay them for their holidays, sick days or any days you have nothing for them to do.
You do not have to provide them with a desk and computer or anything else an employee would need.