Your first order of business should be to find your team of financial and legal advisers.
Personal recommendation is always the best way to find accountants and lawyers, so start asking your friends, family and business associates who they use and if they'd be appropriate for a start-up business.
Start collecting phone numbers and make appointments with those advisers who sound the most suitable, checking that they don't charge for the first appointment. Remember that legal and financial advisers specialise, so make sure that whoever you select is appropriate for your particular enterprise. And don't ignore personal chemistry. You want whoever you work with to be sympathetic to your vision as well as patient and accessible.
Rates
Most lawyers, accountants, and financial advisers work on an hourly basis, and the rates can vary immensely. Go through their costs carefully, checking on any hidden costs or expenses they may charge. The bigger their company and the more centrally located their office, the higher their fees usually are.
Try to find a small operation, which can give you the good advice you need at a price you can afford. Ask them how much time they estimate they'd have to spend on your business the first year, including setting up the legal structure, registering the name, creating a trade mark if necessary and all the other legal and financial needs you are going to have.
Work out what this will cost overall and add this to your budget, together with the legal registration fees and taxes that they can tell you about. Also, ask your accountant to advise you as to whether or not you ll need to hire a bookkeeper. Sometimes it makes more sense initially for you to look after your money yourself, with guidance from the professionals, and then look for a part-time bookkeeper once you're more established.
Bookkeeping
Taking a crash course on basic bookkeeping at a local evening college, or even a more general one on business management, would be a very good idea, if you haven't had some practical financial experience in the past. I studied bookkeeping as part of my secretarial training more than 30 years ago, and I found it essential when setting up my first agency.
Another positive aspect of today's technology is that you can buy software for your computer that can do a lot of your bookkeeping for you. Either way, estimate the approximate charges, bearing in mind that, in many places, you can find a very inexpensive payroll service to work out staff wages and taxes. Your accountant will help to determine what interest rates for your bank loan might be so that you can figure that into your business plan.
Costing
If you intend to go into a service industry, you or your proposed partners or employees are the product, and various aspects of the service you wish to offer have to be calculated, many of them intangible. Your experience and talent, for example, have to be estimated out at current market costs, and you have to calculate what your time is worth by the hour or day.
If you are thinking of going into manufacturing products or retail, it gets more complicated. For example, if you are manufacturing, you ll need to add up your costs per item, which will, of course, have to include your other overheads, and then add on profit. The wholesale or retail price will vary according to what price you can charge for your product. To give you a guideline, most retailers double their wholesale costs as the mark-up for their retail prices. Most manufacturers, depending on the industry, add another 50 to 30 per cent onto their production costs to create their price.
Research The Competition
This is where your research is essential. You need to visit shops and trade exhibitions to determine the prices you should be charging. If there is a strong design element in what you are making, you will be able to charge what you believe the market will stand. You'll soon find out if your price is right.
