Explanatory Notes Starting a business for the first time is a daunting task. Hopefully you have a good idea as to what you want to do and who your customers might be? So here’s the book that tells you why you could be a limited company and how to set it up. Why you might go to your ex-boss for funds and what he/she would expect in return. How to hire people, what to look for in leasing premises, why you might turn business away, how to exhibit yourself and much, much more. It is light and easy to read, practical and without unwanted jargon or technicalities. There are many colourful illustrations helping divide up the 101 different topics. There’s even a little case study which ties together several of the themes. It is designed for the first-time, would-be entrepreneur and provides many answers as well as good questions to ask the third parties you will one day need to engage to help. Read it before you start and it will repay its purchase price handsomely over and over. A sample chapter: Cash is king
Repeat the refrain: ‘Cash is king’. If you don’t ever take more than a single thought away from this book, make sure this is the one you do. Make it your personal mantra. Businesses that go bust usually do so because they run out of money. In fact the definition of insolvency is not being able to pay your debts as they fall due. Not necessarily that you have not made profits but simply that you can't pay your way. Of course it can happen that what you have invented and believe to be very clever, just doesn’t sell. You see such things on TV programmes like Dragons’ Den, all the time, but believe us, it is usually the money running out that will bring you down. There are two big ‘be awares’. Firstly, when going into business (or even buying a business) it is important to have enough funding in place. While we look at raising money later, it is enough to know now that at the beginning you are likely to be most optimistic and therefore very likely to under-estimate both the cost and time taken to start making money. ‘Twice as long and twice the cost’ is rarely far wrong. How? If you need premises for instance, you need to allow for rent, often from before you start, but you will probably also need to pay a rent deposit and hire a lawyer to negotiate your lease. You also need to live, pay for your own food and house mortgage etc while the business gets started. And if it takes twice as long…??? Secondly, make sure you understand not only the pricing structure of your goods and services but also the payment terms your customers will demand from you. Particularly if you are selling to bigger retailers you will find they pay you on their terms and not yours. Department Stores and Supermarkets think paying 90-120 days after receiving goods is ‘normal’. And if they have any query it might be much, much later. While on this topic it is important to make sure the customer is going to pay at all (see ‘Credit Control’) and to be very wary of deals involving ‘sale or return’ where months after a sale, even months after you’ve been paid, your customer returns almost all you sold them and demands a full, immediate, cash refund. Top tip: If you are to give anyone credit, set up and follow a formal debt chasing process and stick to its timetable with all credit customers
| 