5 Top Tips for Starting a New Business
Solicitor Holly Marris looks at the rise in business start-ups and tips for success in the crucial first few years.
2022 may have seemed like a strange time to set up a business. However, even a pandemic, war, new Monarch, cost of living crisis and revolving government were not enough to put people off striking out alone. Moving into 2023, people still want and need to purchase products and services, therefore the opportunity to make strong profit remains.
Starting out in business might be your lifelong dream, maybe you are looking to 'go it alone', or perhaps you’re taking over a family business. Whatever the reason, new business start-ups show no sign of slowing.
In North and North East Lincolnshire this is certainly the case, with Lincolnshire achieving a record year for new company formations during 2021 despite the pandemic and the challenges it brought (Inform Direct Review of Company Formations). 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 the UK, the number of dissolutions achieved another record high.
So, if you are looking at starting up, what can you do to ensure survival? There is so much to consider, and it is important to gain the right support at an early stage.
From a legal perspective, I advise you to consider 5 key issues, being:
Think about whether to set up a limited company. A limited liability partnership may have benefits over starting out or remaining as a sole trader or in partnership. Both legal and tax advice should be sought to determine the best option for your business.
Considering whether to put a shareholders' agreement or partnership agreement in place to regulate the relationships between the key decision-makers is often advantageous. It can be costly and distracting if a director or partner leaves without clear procedures in place.
If you do so, you will need the correct HR and legal advice to hand.
Clear, enforceable trading terms are important for avoiding future disputes.
Choosing the location of your business and if you need premises, it may be best to have your lease reviewed to ensure it is not too onerous.
Of course, there are no guarantees, but the chances of your business’ survival can be increased enormously with the right level of support as it can help prevent future legal issues, protect your business and save you money.
For more information, contact Holly Hilton on 01472 806673 or email holly.marris@wilkinchapman.co.uk
Contact Holly to discuss this further.
