Top tips for new businesses
Solicitor Adam Ottley looks at the rise in business start-ups and tips for success in the crucial first few years.
There are many reasons why business people will take the decision to strike out alone.
In recent years the economic climate has seen much change across the UK and, for many, breaking away from the corporate life has given them the opportunity to start again. For others, it may be a dream they have always nurtured, or indeed it may be a younger person looking to 'go it alone', or take over a family business.
Whatever the reason, new business start-ups show no sign of slowing. In Hull this is certainly the case - a recent survey by Startups.co.uk cited the city as among the top 25 in the UK for launching new ventures. However, whilst this is encouraging, it is the longevity of such enterprises of which we must be mindful. This is particularly relevant given around half of all new UK start-ups do not remain trading after five years. In Hull, the Startups.co.uk research revealed that only 36% survived, based on figures between 2010 and 2015.
So, if you are looking at starting up, what can you do to ensure survival? There is much to consider and it is important to receive essential support at an early stage. Legally, I believe there are a number of key issues that should be covered, including:
- Determining the legal status of your business. A limited company or limited liability partnership may have benefits over starting out or remaining as a sole trader or in partnership, but legal/tax advice should be sought;
- Considering a shareholders' agreement or partnership agreement. It can be costly and distracting if a director or partner leaves without clear procedures in place;
- Employing others. If you do so, you need the correct HR and legal advice to hand;
- Adopting standard terms & conditions. Clear, enforceable trading terms are important for avoiding future disputes;
The location of your business. If you need premises, it may be best to have a lease has been reviewed to ensure it is not too onerous, rather than a simple licence.
Of course, there are no guarantees, but a good business' chances of survival can be increased enormously with the right level of support.