Starting & Running a Business All-in-One For Dummies Cheat Sheet (UK Edition)
So you’ve decided to start running your own business but are at a bit of a loss when it comes to some of the basics? Here you find useful breakdowns of everything from how to plan, run and most importantly profit from your new and exciting venture.
Starting Your Own Business with Some Key Considerations
Read these useful tips to get an idea about what sorts of questions you should be asking yourself as you consider setting up your own business:
- Get everyone involved in setting goals and objectives.
- Find out all you can about your customers.
- Understand who your competitors are.
- Identify your strengths and weaknesses relative to opportunities and threats.
- Determine which capabilities you absolutely need to succeed.
- List all the things you do that add customer value.
- Make sure that you do your financial homework.
- Imagine several different versions of your company’s future.
- Appreciate the impact of the Internet on your business sector.
- Recognise the value of leveraging social media.
Business Success Based on Six Factors
A combination of several fundamental factors determines the success of a business. Refer to the following important points to make sure that you’re covering all vital areas:
- Plans: Company mission, vision, goals and objectives that all work together.
- Organisation: A structure for your company that makes sense.
- Procedures: Efficient and effective ways of doing things.
- Leadership: An ability to build a team and to influence and encourage others around you.
- Skills: The talents and expertise your people need to succeed.
- Culture: Beliefs and attitudes that lead to doing the right thing, always.
What Goes into a Business Plan
A business plan is a key document communicating the developmental objectives of your business. To be sure that this vital information is as functional, accurate and comprehensive as possible, be sure to include the following basics:
- Executive summary
- Company overview
- Business environment
- Company description
- Company strategy
- Financial review
- Risk analysis
- Funding requirements and milestones
- Action plan
How to Avoid Business Trouble: 10 Key Rules
In business, a dangerous area of marketing arises when people try to bypass regulations that ensure fair pricing, safety and honest advertising. In the UK, as in Europe and North America, there are regulations as well as self-regulatory industry guidelines:
- Always make sure your pricing is fair (because unfair competitive practices are usually illegal).
- Always clarify the limits of warranties for services or goods.
- Always provide full warnings and details about your product’s content and source on labels.
- Always follow an open and honest policy with the media.
- Never say anything deceptive or misleading in ads or other communications — remember the watchwords ‘legal, decent, honest and truthful’.
- Never distribute products that can do harm to anyone.
- Never discuss prices with competitors (that’s called price fixing).
- Always keep an eye on future trends that may impact on your performance.
- Never be complacent — change is inevitable, so see it as an opportunity.
- Always pay attention to how your business appears online.
Keeping Tabs on Your Business Cash
Cash is the lifeblood of any business, whether it’s a multi-billion-dollar empire or a tiny independent company. Refer to these handy guidelines when delegating the handling of cash within your business to ensure a fail-safe system of cash-flow:
- Separate cash handlers. Be sure that the person who accepts cash isn’t also recording the transaction.
- Separate authorisation responsibilities. Be sure that the person who authorises a payment isn’t also signing the cheque or dispersing the cash.
- Separate the duties of your bookkeeping function to ensure a good system of checks and balances. Don’t put too much trust in one person – unless it’s yourself.
- Separate operational responsibility (actual day-to-day transactions) from record-keeping responsibility (entering transactions in the books).
- Start out each month with a cash flow projection as far out as is needed to break even and then track performance.
Tracking Business Finances through Timely Bookkeeping
All businesses need to keep a record of their financial transactions in order to assess their financial health, provide status reports to various bodies and comply with legal regulations. Use these steps as a guide to keeping your books well and truly up to date:
- Transactions: The purchases or sales of items start the process of bookkeeping.
- Journal entries: Enter transactions into the books through journals.
- Posting: Post journal entries to the Nominal Ledger.
- Trial balance: Test accounts in the Nominal Ledger to see if they’re in balance.
- Worksheet: Enter on a worksheet any account adjustments needed after the trial balance.
- Adjusting journal entries: Post adjustments from the worksheet to affected accounts in the Nominal Ledger.
- Financial statements: Prepare the balance sheet and income statement using the corrected account balances.
- Ratios: Use ratios to cross check performance from one accounting period to another. Any major change could signal an error in record-keeping if you can’t account for it by a known change in performance.
- Closing: Close the books for the revenue and expense accounts, and start the entire cycle again with zero balances in both accounts.