Apparently, according to Companies House, Dorset is one of the favourite places in the UK to set up a new business. This is the micro and SME business capital of the country! What do you need to do to join this stampede of get-up-and-go entrepreneurs?
Your Business Plan
This should be your starting point to record: your business model; the assets you will need to conduct it – people and infrastructure; where and how you will achieve sales; and how you will fund all this activity.
Find a good name for your company and test it for individuality and conflict (you don’t want to start trading with the same name of a company which has just gone bust!). Keep it simple but the more unique, the better. Secure the domain name, maybe in co.uk and .com. Incorporate via an agent (you don’t have to use an agent but it is worth paying for a full set of company books all written up and a good set of Articles of Association).
There are certain basic legal building blocks which help to grow a business on safe ground rather than on the shifting sands of commercial life:
Are you in business with a friend, as co-shareholder?
In this case, you will already have good Articles of Association (hopefully!) but you should also have a good shareholders’ agreement, laying down who has final say over what to ensure the working relationship is fair so that you work happily and in peace with each other. You can introduce terms whereby you have the right of veto over things like dividend and salary payments or major purchases. You can also put in place a route to exit to try and avoid the nasty fall-out of a “divorce”.
Good terms of business are essential, defining the relationship with your customers.
They should state what you will do, as your part of the contract, but avoid dangerous areas such as making time of the essence or unlimited liability for any mistakes. At the same time, they can cover credit terms, limit your potential liability and lay down a procedure for resolving any disputes.
Employment contracts, policies and procedures are required both by law and by good sense.
The law requires any employee to be given a minimum statement of his terms within the first two months of employment. I advise that a binding contract is in place either on or before the first day, so that any later breaches of say confidentiality are covered.
If you use subcontractors, rather than employees, I would strongly recommend a contract which should state that the contractor is not an employee but that any intellectual property rights in his work belongs to your company. You can also include a non-solicitation clause to stop the contractor going direct to your customer.
Finally, get a good group of advisers and mentors around you. The sort of people who understand what it is like to be in business and you can phone for help.
Call us for a chat to see what we can do to help you.