Three Steps To Start a New Business Term Paper Example | Topics and Well Written Essays - 1250 words

Three Steps To Start a New Business - Term Paper Example During times such as this, small starts up businesses are advantaged because the opportunities in a recession are numerous (Bradberry, 2011). However, first step entrepreneurs should follow three steps. These are creating the business identity, registering the business, and funding the enterprise. The first step involves refining the business idea. While most entrepreneurs are stuck in wondering how to begin, simply thinking of opening a business is the beginning. What entrepreneurs must contend with is that there will always be challenges in starting a business (Ready, 2011). In order to be successful at this point, the entrepreneur must define the concept of their business. The entrepreneur will have to make a decision on the form of business they will create. This can be a limited company, a partnership, or a sole-proprietorship, the simplest of which is sole-proprietorship. At this point, do what you know. Think about your past actions in terms of the way you can transform them i nto products and services. There are three main aspects here. One should emulate what others have done, do what feels best for one’s situation, and aim to solve a common problem. In addition, the business plan needs to be worked on in its entirety at this point. This will help the entrepreneur in gaining confidence, focus, and clarity (Butler, 2008). In a sole entrepreneurship, the entrepreneur will have personal liability for the business’ debt, although he/she will earn all the profit. Sole proprietorship is relatively inexpensive with low formation costs, as well as not having to file accounts or have them audited by government-accredited agencies (Butler, 2008). If an individual is in business with another entrepreneur, then the individuals can form a partnership. In this case, both will be jointly liable for debts accrued as partners. Taxation is done separately for each partner; while this form of business owners can have limited liability for the purpose of debt s. Partnerships also have more formal structures as compared to a sole proprietorship. These must be registered with the relevant government agency. They could also decide to form an LLC, in which case their liability is limited to how many shares the individual entrepreneur has bought. This is the most expensive with registration and account costs, taxable profits, and separate taxation for each of the entrepreneur’s dividends and salary (Butler, 2008). After giving an identity to the business, he/she wants to start, the entrepreneur should then move on to the regulatory and legal requirements that they require to fulfill. First, they must register with a government agency for the purposes of the national insurance, tax, and their PAYE payments (Broad, 2012). In addition, the entrepreneur will need to get a VAT registration PIN. With regards to VAT, the government has various schemes for different entrepreneurs. If one chooses to be part of a partnership, then he or she will have to outsource to an accounting organization. This is important for protection of each partner in case of liability claims. These accountants are trained and certified with professional qualifications in public accounts. The choice of accounting firm will be important in relation to the nature of the business since every accounting firm has a unique way of member