1. CA View - How to Start Your Own Business
Allan Clark
Elaine Macadie
22nd February 2012

2. Areas to be Covered Is this for you? Starting your own business
Developing your business
Current business environment
Conclusion
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22 FEBRUARY 2012

3. Reality Check A good idea? Discuss with others A profitable idea
Friends
Impartial parties – an honest opinion?
A profitable idea
Is this for you?
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22 FEBRUARY 2012

4. Business Plan I Focus your thought process Demonstrate your vision
Something to measure performance against
Communication with third parties
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22 FEBRUARY 2012

5. Business Plan II (Exercise)
What do you think should be in a business plan?
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22 FEBRUARY 2012

6. Business Plan III (Discussion)
Unique Selling Points (USPs)
Key staff and structure (existing investors?)
Financial projections
Sensitivity analysis
Product
Pricing strategy
Market and Marketing strategy
Competition
SWOT analysis
INNOVATIVE LEARNING WEEK
22 FEBRUARY 2012

7. What Structure? I
Sole Trader/Partnership/Limited Liability Partnership (LLP)
Drawings
Company
Salary
Dividends
Directors Loan drawdown
INNOVATIVE LEARNING WEEK
22 FEBRUARY 2012

8. What Structure? II Liability Flexibility Customer/Supplier perception
Unlimited/Limited
Reality for a small company
Flexibility
Profit share
Number of shares
Customer/Supplier perception
Confidentiality
INNOVATIVE LEARNING WEEK
22 FEBRUARY 2012

9. Tax Regimes Inform HMRC!!! Sole Trader/ Partnership/ LLP Company All
Income Tax
National Insurance
Company
Corporation Tax
All
PAYE/ NIC (staff not partners)
VAT (threshold £73,000)
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22 FEBRUARY 2012

10. Setting Up A Company Company name Public record Company obligations
Companies House
Company obligations
Directors responsibilities
Annual return
Statutory accounts (abbreviated?)
Audit?
Information required for formation
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11. Financing I (Exercise)
Where could you go for financing?
For which stage of the business is this most appropriate?
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12. Financing II (Discussion)
Personal
Friends and family
Grants
Loans
Overdraft
Hire Purchase/Leasing
Factoring
Venture Capital/ Business Angels
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22 FEBRUARY 2012

13. Raising Finance (Debt)
Loans, Overdrafts
Business plan or projections
To show repayment/affordability
Meets monthly commitments
Demonstrates can make any bullet payment
Realistic/assumptions
Covenants
Security and guarantees
Professional
Timescale
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22 FEBRUARY 2012

14. Raising Finance (Equity)
Later in business cycle
Proven sales/product
Business plan or projections
To show high growth
Demonstrates can pay dividends (dividend growth)?
Realistic/assumptions
Exit strategy
Dilution
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22 FEBRUARY 2012

15. Key Individuals I (Exercise)
Who do you think will be the key individuals in your business?
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16. Key Individuals II (Discussion)
Directors/Company Secretary/ Partners
Key staff
Accountant
Lawyer
Bank Manager
Others:
IT, Patents, Sector Specific
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17. Business Bank Account Separate (from personal)
Introductory deals (fee free)
Deposit account?
Information required to open an account
Other things to consider
Ongoing charges
Debit/credit card terminal
Interest rates (debit and credit)
Signatories and authorisation
Foreign currency?
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18. Administration Excel Accounting software Invoices Standalone Online
Information
Payment terms
Credit Control
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19. Monitoring I (Exercise)
How would you monitor your business?
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20. Monitoring II (Discussion)
Management accounts
Profit and Loss and Balance Sheet
Refer back to Business Plan
Reporting against projections with variance analysis
Cashflows
Monitoring cash against overdraft limit
KPIs
Sales
Gross Profit
Loan covenants
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21. Other Considerations Insurance Location/premises
Best use of your time/time for assistance
Hiring staff
Pension
...
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22. Messages From Business
Its tough out there
Bank financing, Bad debts, Margins
But there are opportunities
Recessions are times of change!
Find your niche
Your passion
Think about financing
Remember lag times
Take professional advice
Get it early!
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23. Potential Pitfalls Idea/Product Financial Management Financing
The key!
Financial Management
Invoice and collect promptly
Spend wisely
Financing
Plan ahead
Tax – paying and registering
You can’t avoid it
Plan for it
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24. Conclusions Have a robust business plan Know your USPs
Refer back and compare
Know your USPs
Play to them
Know your market
Target sales
Have adequate finance in place
Then you can focus on business
Don’t ignore tax
Rangers FC!
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25. Questions?
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