At UHY Haines Norton Gladstone we love working with business owners, and it’s always particularly exciting and rewarding to be with clients from the very start of their journey, whether it’s turning an idea into reality, or buying an established business to call their own.
If you are thinking of venturing into the world of business, and you are not sure where to start, here are a few things to consider, and people you should talk to:
1. Finance – how are you going to fund the business? Will you need bank support? If so, it’s important to talk to your bank manager early so that you understand how to apply for a business loan and what deposit or security will be required. Keep in mind you will not only need to finance the initial purchase of the business itself, plant and equipment, vehicles etc, but you will also need cash to fund the initial operations.
2. Due Diligence – how do you know the business is viable? Undertaking due diligence, which simply involves analysing all aspects of the business, is a critical part of the process of buying or setting up a business. This activity covers everything from financial viability, consideration of the structure of the business, taxation implications, procedures and systems, employment, marketing and contracts. Your business advisor and accountant can guide you through this journey and work with your solicitor to ensure you are fully informed and that there are no nasty surprises.
3. Future Projections – what is your vision for the future? Financial projections will usually be required by the bank for your finance application, but you should also invest in this activity so that you have a clear vision of the profitability of the enterprise and any cashflow peaks and troughs. These projections will also be useful to compare actual to planned performance in the future.
You should also think ahead to your exit of the business. I know this might be the furthest thing from your mind now, but some of the decisions you make today will affect the sale or succession of the business in the future. Again, talk to your accountant and business advisor about these matters.
These are just three broad headings to cover a quite complex and important decision-making process. The critical activity is to seek advice early! This is usually one of the largest financial decisions you will make in your life. Don’t go it alone. Call the professional team at UHY Haines Norton on 4972 1300.