I am now at the latter the end of my working life; in truth I am more valuable as an asset to a business now than at any previous point in my career. I have more contacts, more knowledge and more credibility than I would ever have though possible and yet when I set out on the path of self-employment, I was the first in my family to ever do so and for that reason I had to rely on paid experts rather than free advice.
In my case the paid for advice came largely with the franchise that I purchased, I was however pointed in the direction of two others, one of whom was great, the other a disaster. The great one was an accountant (more on that later) the other, a pension advisor has cost me money ever since.
The aim of this blog is to help those who are considering self-employment, have just started out on this path or who are running their business but feel that “something is missing” to get their business on track. There will come a point where professional one to one coaching is vital, but this is a bit of free coaching and hopefully, it will set you on the right path.
I am going to start with the number one “secret” to success, KNOW YOURSELF. It isn’t a secret for anyone who has read books on business or self-improvement and it shouldn’t be a secret to anyone, if I had my way it would be on school curriculums, a significant amount of first world problems would be eliminated if it were. If you think this is modern mumbo jumbo, let me tell you why it isn’t.
First off let’s define “success”. Ask any teenager what success is and you will get answers like “fame”, “big house”, “flash car”, “foreign holidays”, “yachts” etc. Move forward a few years and the same people have jobs, wives and children and the answers change. Then it becomes “health”, “financial security”, “children’s education”. “Job satisfaction”, the first three are predictable, the last one, less so. We are going to deal with the last one because a surprising amount of the other three hinge on this and it is the one that coaching can affect.
I think we can all agree that if like your job, you are probably going to be better at it, the better you are the more likely it is you will be successful in the financial sense. It also makes sense that you will be less stressed in a job that you like and are good at and therefore your health is likely to be better. If you are less stressed and healthy, your relationship with your partner is more likely to be harmonious. If your partnership is strong, you are more likely to have happy well-balanced children who want to learn. All these benefits to you, your family and society at large hinge on one thing and this one thing isn’t taught, is it just me that thinks this is madness?
Sounds daft right, after all you have lived with yourself all your life, how could you not know you? The truth is you probably don’t, but those around you do and vice versa, in my case for example, I never thought of myself as combative or argumentative and yet my wife would say the opposite and when I did my DISC test, sure enough there it was. What I also discovered was that I was a “high I”, in other words an influencer, when I read this, suddenly everything clicked, in the past I had been surprised when people did as I suggested, but this test showed I was born to do just that. That information changed my life.
There are many tests you can take and discussing them in detail is well outside the scope of this article, but please take one BEFORE you invest time and money in any business. I hated running first franchise I invested in and couldn’t wait to get out, if I had taken a personality test in the first place, it would have told me it was wrong for me, but back then I was young and dumb and of course argumentative, I would have said it was wrong.
On now to your accountant. Those people who “have your best interests at heart” will tell you, “You don’t need one at” all, “save your money”, “your accounts package will do it all” or “wait until you have done your first years trading”, this is all totally wrong and can be costly for you. Let’s talk about why you should consult an accountant BEFORE you start a business.
First off everyone’s situation is different and how you structure your company can save you substantial amounts in tax over a long term. An accountant will advise you to set up as sole trader, limited company or partnership depending on your circumstances. They will also advise on VAT registration; small startups will not be required to register but it may be beneficial and your accountant will be in a better position to advise on this than your mate who is a plumber.
Moving on, you will get advice on expenses (what you can claim for and what will cause you to be fined if you are audited), also vitally they will tell you what accounts packages they work with, (no point in using Sage if they only handle QuickBooks and Xero!).
Finally, ask you accountant what it is that you should consult them on in the future. An example of what you may ask them about is how best to make capital purchases such as vans or new machines, here they will factor in your cashflow and tax situations and will let you know if a loan, a lease, or outright purchase is best for you.
A consultation with an accountant should not cost much and it is their interest as well as yours that they do one. It gives them a chance to sell their services and if you are correctly set up it will save them time and therefore it will save you money. Do not, whatever you do, ring an accountant a week before your return is due and turn up with a Tesco bag full of screwed up receipts and invoices, they don’t like that and will charge a fortune to sort out your mess.
Think Big, Think Long Term
One of the most commonly made mistakes of those starting their first business is to think too small, an enterprise that starts off as a “lifestyle business” grows rapidly but the original name and company structure suggests it is a “one man band” Examples of this can be calling the business “John Smith Floor Sanding”, what happens when you want to sell on? The name will alienate a lot of potential buyers. Another example (mea culpa) is not building a customer database (preferably on a CMS), which is the one thing that used properly will grow your business and make it saleable (forget selling a business without any form of customer database). Finally, as well as giving the company your name, building it solely around you is a big mistake, if your customers only know you, they will only want you to deal with them, once again your exit strategy is screwed. So, there it is, the bit that everyone new to business doesn’t think about, their exit strategy, we all get caught up in the ”now” and forget the “later”, we obsess on the “how” and not the “why”.
- Why are you going into business? – Write down what your and your life partners objectives and goals are?
- What type of business would make you happy and help achieve your objectives? – Do a personality test and involve your life partner.
- Set up the company structure correctly – Consult an accountant on tax, vat and accounts software etc., choose a good name with a useable vacant URL and take into consideration your long term goals and exit strategy even if it seems too early.