Managing a New Company Formation in 6 Steps
Updated August 2016.
It is very important that both entrepreneurs and those looking to start up a new company acquire the skills needed to lead and manage a successful business.
The administration of any company must go through a series of stages or processes, whether its a small, medium or large sized business. Many people just about to start up their business will be wondering where and how they should start. Is there a step-by-step guide out there that they can easily follow, or is that over simplifying the process?
To begin with, no two companies are likely to operate in the same manner so getting started and running your business may differ slightly to someone else starting in the same industry. Regardless of what industry you choose to specialise in, you will need a good solid structure or foundation on which to build your company.
It goes without saying that you will need a leader or a team of people to run your company. A director or board of directors is usually your first step to have established at the beginning. You can add and remove directors after your company formation is complete, so you don’t have to worry about this as your company grows.
If you are starting a small business then you may take on the role of the director as well as the general manager role of your company, but you may choose to delegate your management roles to others as your company expands and you need to focus more on directing the company.
You may have a brilliant idea for a business and the drive and passion to see it succeed. Never worry that your business may not be a success because you are not a whiz at finances, or you feel you are not very good at managing others – you can hire in experts and managers to take on these tasks for you at a later stage so you can concentrate on what you are good at and focus on growing your company.
How you choose to run your business is your concern, but to set it up properly is crucial in the beginning to make sure you comply with government rules and regulations. It would be helpful for you to read up on what is required by law for companies to start up and operate – you can get expert help about this from us by contacting us here. We will be happy to help set you on the right path!
6 Sure-fire Steps to Success!
So before you jump in at the deep end, here are some useful planning tips to help you get started properly.
Step 1: Focusing on the reality
When starting up a new company, it is easy to become over ambitions with your goals and for you to set unrealistic targets, or even be threatened by competitors successes. Your competitors certainly didn’t earn their success overnight, so you shouldn’t expect to be out-performing them very quickly. This is why it is so important to seek out information relating to the economic environment for your chosen niche and look at the performance of other businesses in your industry and thereby being able to set goals and targets within a realistic framework.
Step 2: Planning
Planning is an essential step of any business, from the smallest of businesses to large global multinationals. When you do any planning, it will be essential to have a definite purpose and process with regards to all aspects of your business, from partnerships, directors, managers, products or services, advertising, brand identity and logo to name just a few.
Planning your company can take a very long time. It may be frustrating for you when all you want to do is jump in and get your company off the ground, but taking the time to plan each structure of your business is very important and will give you the strong foundations you need to build your company with. You will be so glad that you worked out your strategy and formed a plan to follow in the long run – believe me!
Once you have your management structure in place, there is no better time to seal your commitment to your new venture than to have it officially incorporated as a company. You can do this quickly and easily through our company formations service and once completed you will have a great foundation from which to build a highly credible and productive business.
Step 3: Capital use
Whenever possible, it is recommended to use the cheapest source of capital you can get to start with. You will find that you may not make instant profits from day one of your business, and when you do start to see gains on your investment you have to think carefully about re-investing money back into your company to help it grow and expand, but to also upgrade or replace equipment that you use.
Venture capital and contributing partners funds are a good start, and most of this funding will have more favourable interest rates or terms and conditions than more expensive methods. The last thing you want is to be saddled with expensive debt to pay back as a priority rather than using most of your profits to re-invest back in your own company.
Step 4: Habits of customers
Having a thorough and in-depth knowledge about the shopping habits, tastes, likes and dislikes of your target audience is essential. The better you know your customer demographic the more you can tailor your products or services to fit with their needs and desires.
Take time to read any customer research already available in your chosen sector, or if you specialise in a particular niche, conduct some market research of your own through surveys, interviews and social media polls.
Step 5: Stock or skills inventory control
If you plan to sell products to your customers the it is important to keep control of your stock. If you overstock, you may find yourself short of funds to use elsewhere – for example, sales and marketing campaigns. If you understock, then you will not be able to fulfill customer orders and you will attract negative feedback as a result that can seriously damage your reputation and put off potential new customers.
If you are providing a service, then making sure that you have an adequate skills pool available to your customers or clients will be essential. For example, if you run a team of plumbing and heating engineers then you will want to make sure that your team are fully qualified and up to date with their training, especially when new health and safety legislation is brought in or changes are made to environmental rules.
Step 6: Meet your responsibilities
While it is both exciting and thrilling to owning and running your business, becoming too wrapped up in the day to day hustle and bustle of keeping on top of your workload can lead to you forgetting or neglecting to carry out some very important aspects of running your company.
If you employ staff then you have a responsibility to them to keep the business above board and running well so they can keep their job. If you have shareholders and business partners, you will need to make sure they are kept up to date with information on how the company is doing, but also making sure that everyone is getting paid on time.
After you have gone through your company formation you will also understand that you have certain responsibilities to fulfill for HMRC and Companies House each year. Failure to meet your legal responsibilities would land you in some pretty hot water with the government and could see your company being landed with unwanted fines.
Luckily, we at Capital Offices have a wide range of helpful services that we provide for our clients. So no matter if you are new to starting up your own business or you have already formed your own company, but are looking to expand, we are here to help you! Contact us today for some advice and guidance, or take a look through our blog and website to find out more about how we can help you succeed in your business.