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Q&A: Corporate law

Q:  I want to run my own business, what are some of the issues I need to consider when setting up?

A.  By James Allison, corporate partner in Blackburn.

A detailed business plan will greatly assist you.  Finance, management, sales and marketing must all be accounted for in your plan and budgeted for the next one to three or five years.

Consider your proposed business performance including cash projections and forecasts based on the margins you want to achieve.  Are these sustainable?  Get advice from a good accountant with the skills to not only prepare accounts and tax returns, but also help future development.

What is the management structure and is it effective?  You may need to put legal agreements in place.  Carry out due diligence to ensure the right structure is in place for your needs and that your ‘nest egg’ is preserved.

On what basis will you be selling your product or service?  If you are a reseller for example, you need to secure your route to market, with contracts in place. Whether services or products, there may be industry regulations you need to adhere to with associated compliance costs, in order to run your business properly and legally.

Consider overheads.  If you need premises should you buy or lease? What about plant and equipment or other assets?  As your business grows you may require more staff – as well as costs, be aware of employment legislation.

Think about how much money you need to start trading.  Will you need bank funding, asset finance, or a grant such as the Fuse Fund or local grant programmes?  Talk to advisers who can guide and help you apply to them.

It’s important to get expert advice.  Above all else, a robust business plan created with the help of your business adviser will enable you to minimise risk – vital in this economic climate.  Although banks are more willing to support viable business propositions and there is support available from groups such as EV, The North West Fund and the Regional Development Fund, it’s not easy. Security and credibility are crucial. If you have these, then you should be able to get off the starting blocks and make a go of it – good luck!