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A business plan is a document that
provides researched information about
your business, its market, operational
details and finances, including sales
projections and marketing information.
Why write a business plan?
A business plan forecasts events and enables
you to review actual events versus forecast
events and then make appropriate corrections.
Most of us have a business plan in our heads
when we start, but the value of committing it to
paper emerges when monitoring progress,
making decisions about priorities, planning the
best use of time, making operational decisions,
taking risks, or raising funds. The business plan
is the yardstick against which the proprietor –
you – measures the progress of the business
venture on which you have embarked.
the ones that you will have to achieve to stay
in business. Don’t put yourself under too much
pressure; it’s important that you enjoy running
Market research provides
businesses with basic market
information that allows them to assess
the feasibility of the business. It can be
carried out at any time and should be
repeated at intervals, particularly when developing new products.
identify the following
Choosing a business name
When you’ve got an idea and the plans start to come together in your mind, you need to choose an effective business name for your small business. Here are a few things you need to consider before coming up with your final choice of business name. It’s worth spending a bit of time on this because you don’t want to have to change it at a later date: changing business names can be very expensive and disruptive, both to you and your customers.
There are certain legal restrictions on company names that you should be aware of. See below for more information.
Naming rules for different types of business
Choosing a business name for a sole trader
You can trade under your own name, or choose a different business name but you cannot pretend to be a limited company by using ‘Ltd’ or ‘Limited’ as part of the company name. If you choose a business name that does not include your own name you need to include your own name on all business correspondence. Your bank account will be set up using your own name ‘trading as’ your business name, for example ‘A. Smith trading as Wheelerdealer’.
Choosing a business name for a partnership
A partnership can trade under the names of all or some of the partners or choose a different business name altogether. Whatever business name you choose, you can decide whether to list the business partners’ names. However if you choose to list the partners’ names on business correspondence you must list all of them.
Choosing a business name for a limited liability partnership
A limited liability partnership can trade under its registered name or choose a different business name. All limited liability partnership business names must end with the words ‘Limited Liability Partnership’ or ‘LLP’.
Choosing a business name for a limited company
A limited company can trade under its registered company name or choose a different business name. Only a limited company can use the word ‘Limited’ or ‘Ltd’ in its business name.
Things to consider when choosing a business name
First impressions count and the business name you choose is initially the only thing customers and suppliers know about you. Your business name projects a certain brand image and should reflect the personality of the organisation in a way that appeals to the target market. For example:
* Do you want the name of your business to reflect what it does – car repairs, cleaning, maintenance services? Or would something more abstract be suitable?
* If you choose a descriptive business name try to pick a name that won’t limit your potential for future diversification.
* Do you want to include your own name? If you’re going to use your surname and it’s a popular surname, it would be advisable to use some kind of description in your company name as well; otherwise you may inadvertently be a ‘passing off’ as another more established company.
* Make it easy to remember, easy to say, and easy to spell.
Things to avoid when choosing a name for your business
* words or phrases that could become unpopular or politically incorrect.
* repeated letters or hyphens; they could confuse customers and may cause problems with domain name misspellings, which will make it difficult for people to find you.
* It’s OK to make your business seem larger or more established than it really is, but be realistic otherwise you may attract enquiries that you cannot handle. Or worse still, you may miss out on the enquiries you can. ‘Global’, ‘worldwide’, ‘national’ are ones to avoid unless you really can provide such services and want to attract this kind of business.
* If you’re likely to be trading overseas, check that the business name you choose doesn’t mean anything inappropriate when translated. You should also check that your business name can be easily read and pronounced in the countries you will plan to operate in.
General principles when naming a company
The business and trading names you choose must not be:
* likely to be confused for an existing business (known as ‘passing off’)
Terms that can’t be used in a business name
* Only limited companies can use the word ‘Limited’ or ‘Ltd’ in their names
* Only limited liability partnerships can use ‘Limited Liability Partnership’ or ‘LLP’
* You will need the approval of the Secretary of State for Trade and Industry before you use certain words or expressions. A full list is available on the Companies House website but examples of words you cannot include without permission include:
+ British, National, International
+ Association, Federation, Society
+ Insurance, Fund, Trust, Foundation
+ Architect, Charity, Dentist, Nurse, Optician, Pharmacist
How to make sure the business or company name you want is available
If you’re going into business as a sole trader there is no longer a need to register a business name so there is no longer a single company name register that you can go to for a definitive search. However, it’s important to make sure you’re not going to use a name that is similar to an existing business. If you do, you could be accused of ‘passing off’ as them and be forced to change your business name. This could be expensive if you need to change stationery, office signage, contracts or other legal documents, bank accounts and so on. There are some checks you can make yourself however you may also want to consider using the services of a patent or trademark agent to do a business name search on your behalf or to consult a intellectual property lawyer.
The following checks will provide a good basis if you want to do the checks yourself:
Finding out if a domain name is available
You can find out if a domain name is available by doing a domain name search with a web hosting provider such as startupstore.co.uk.
If the domain name you want is available you should register it as yours immediately and then you can adopt this as your business name. For under £10 you should be able to register the domain name for at least 2 years. This makes good sense, even if you’re not planning to have a website yet, as it protects you from anyone else registering it and therefore using the same business name as you.
It will also enable you to have a proper business email address, for example firstname.lastname@example.org creates a far more professional image than email@example.com.
Check Companies House for the availability of a company name
It’s worth checking the Companies House company name register even if you’re not considering setting up a limited company as it will show you if there is an existing company using the same or a similar business name. Use the free ‘webcheck’ service on the Companies House website.
Check the Patent Office
The fact a business name is not currently in use does not necessarily mean you will be able to use it. Check for names which are already registered as trade marks at the patent office. The patent office provides a search and advisory service for trademarks and patents, as well as a free online basic search facility at www.patent.gov.uk
Look in directories
You can get help in choosing your business name by using on-line directories such as www.thephonebook.bt.com www.192.com and www.yell.com. You can search on business name or business type and choose to limit the search to a specific geographic area or look UK wide. Also look in your local telephone directories such as Thomson, Yellow Pages or the BT Phonebook which will all have separate business sections listed in business name order.
●Who your customers are
●Who your competitors are
●How and where you are
going to trade
●The size and potential of
●A pricing strategy
●The most appropriate
●Estimated sales income
Your potential customers
●Who are your customers? They could be
wholesalers, retailers or end-users (e.g.
individuals, other businesses, institutions).
●Where are they (local, regional, national
●Where and how (e.g. trade magazines,
trade shows, directories, agents) will you
●How will you get access to them (directly
through a personal visit, or through an agent,
trade shows, shops, galleries, etc)?
●What are their needs?
●What are their spending patterns?
●How and where do they trade (through trade
shows, buying trips, etc)?
●How and where do they purchase their
●How do they find out about new
●What criteria do they use to select the work or
service that they require?
Are their decisions based primarily on price or on quality?
●Who are your competitors?
●How established are they?
●What do they sell?
●Where do they sell?
●How do they market their products/services?
Create a competitors’ dossier of, e.g.,
advertising material, direct mail, PR materials.
●How are they positioned, and what is
●How do they operate – do they
compete directly with you?
●Who are their customers?
●What are their business goals? Try to identify
their likely long-term strategies and business
●What is the size of their market?
●Why will your product/service be better
●What are their strengths?
●How will you market your work?
●What will your selling costs be?
●What are your projected sales?
●How will you get new business?
●How much time each week/month will you
allocate to sales and marketing?
●How much time will you allocate to sales
●What do you see as the future of the
market that you have chosen? Is it growing
Income Tax is payable by self-assessment. Once you have registered your self-employment with HM Revenue & Customs you will be given a 10 digit Unique Taxpayer’s Reference (UTR). (Your Tax Return form should contain the relevant supplementary pages to notify your self-employment income.)
The UK tax year runs from 6 April to the following 5 April. (The year commencing on 6 April 2011 and finishing on 5 April 2012 is known as the tax year 2011/2012.)
There are strict time limits for filing your Tax Return. The 2011/2012 Tax Return must be filed by 31 January 2013 to avoid a late filing penalty.
Common problem areas and questions
To what date should you prepare your Self-Employment accounts?
Normally the first accounts that you should prepare would be for a period of no more than 12 months, but the first period of accounts need not be for exactly 12 months. For example, if you commenced self-employment on 1 August 2011, there is no requirement to prepare your first accounts for the year to 31 July 2012. Normally it is simpler and more tax-efficient for the first accounts to be prepared from the date of commencement to the following 5 April, e.g. with a 1 August 2011 commencement date your first accounts would be to 5 April 2012 and then to 5 April annually thereafter.
What business records do you need to keep?
HM Revenue & Customs publishes guidance notes about the records that should be kept (leaflet SA/BK4, obtainable from www.hmrc.gov.uk ). You must keep a proper record of all business receipts and expenses and retain all supporting documentation, otherwise penalties may become payable. Business records must be kept for at least 5 years after the 31 January following the year of assessment.
The HM Revenue & Customs helpline for the Newly Self Employed is 08459 154 515
Value Added Tax (VAT) is a tax on the final consumption of certain goods and services in the home market but is collected at every stage of production and distribution. Most business-related goods and services will therefore be subject to VAT.
There are several UK VAT rates, the standard rate being 20% (from 1st January 2011).
Your company should register for VAT if your turnover -the amount of money going through your business, (not just the profit) in the past 12 months or less has exceeded the current VAT registration threshold of £73,000 (from 1st April 2011), if your turnover looks likely to exceed this you should register prior to hitting the £73,000 figure
This threshold applies for the 20011/12 tax year.
Even if your business turnover lies below the current threshold, you can still register for VAT, since there may be business benefits in doing so (worth checking with your accountant or direct with HMRC).
Basically, a business will pay VAT on all purchases it makes (known as ‘input tax’) and then charge VAT on all sales it makes (known as ‘output tax’). If a VAT-registered business receives more output than input tax in a VAT period, it will pay the difference to HMRC, otherwise the HMRC will refund the difference if the business pays more VAT than it receives.
Once you are VAT registered, you will need to update your invoicing templates to take account of the additional tax you need to charge your customers. Most businesses will receive a green VAT return every quarter – you should then send your calculations to HMRC, and pay any VAT owed (or claim a refund). if you file your VAT return online,you will have extra time to pay.