The COVID pandemic continues to have a profound effect on the business world with unemployment rates increasing and the survival of some businesses in the balance. Yet, it has also driven a wave of creativity, no better illustrated by the progress being made to find a vaccine.
But will a wave of entrepreneurialism follow the eventual demise of the COVID pandemic? Our Director, James Johnson believes it will.
It is said that necessity is the mother of invention, and that rings true with post-crisis entrepreneurship. In the years following the 2008 financial crash, the numbers of new business start-up increased year on year to a record 608,000 new businesses registering in 2015.
And whilst it is perhaps a little too early to call the same in 2020, the early reports are encouraging. In the first nine months of 2020, the Centre for Entrepreneurs reports that 572,882 new businesses were registered in the UK, and increase of nearly 10% on the previous year.
Whilst many of those businesses registered will be subsidiaries of much larger businesses or micro-businesses running from the kitchen table or spare bedroom, I do believe we are likely to see a wave of entrepreneurialism. New businesses will emerge and businesses that we thought we knew will change to take advantage of new opportunities.
The economic landscape may have changed the underlying principles of starting and growing a business haven’t.
Growing a business
Starting a business is always exciting, and there will undoubtedly be many new opportunities for entrepreneurs to explore. But building and growing that business takes time, dedication and good management.
Starting a business on the right foundations will provide a framework for growth. Things to consider include:
- Clear vision for the business – this helps create a successful strategy and can be broken down is to small targets. It will also help focus employees to engage with the objectives of the business.
- Company structure – This is very important to get correct from the beginning as the business should be able to grow with your vision. The right structure will allow you to create a management team to create value and guidance for employees. It also gives credibility and confidence to your customers and suppliers.
- Funding – There are a number of different ways to fund a business and working capital. Good businesses match the funding to the term of project or investment. Examples include where buying a property taking out a commercial mortgage, or for vehicle taking out HP or lease over three to five years. The most common funding comes from retained earnings.
- Staffing – building a great team will help grow the business and allow you to time to either focus on the business strategy or having a break.
- Take advice – It can be a lonely place leading a business and having a supportive team of advisors (accountants or solicitors) will allow you discuss situations you find challenging or help you develop opportunities and contribute to your ideas.
How Hillier Hopkins can help
Hillier Hopkins has been helping businesses grow successfully since 1933. We work with businesses across a vast range of industry sectors and of all sizes, guiding business owners and management teams through all the stages of growth.
In addition to the compliance matters that all businesses need to attend, for example, VAT, audit and accounts, accountants help businesses and their owners grow and develop the business. This often includes:
- Choosing the right structure for the business. This is very important and there are three main options 1) Sole trader 2) Partnership or 3) Limited Company. These will affect the growth and development of your business and the tax liabilities.
- Creating and understanding growth plans. The business plan will tie into your future vision for the business and your success whether reaching a global market or becoming a trusted local business. The growth plan will help with funding and cashflow, your target market and defining, evaluating and comparing results. It also allows you to look at your personal income and tax implications.
- Securing the right kind of financing. One of the first problems is where and how to raise finance. There is a dazzling array of possible financing options. The two main types are share capital or loan capital. It will depend on your structure of the business and future grow plans.
- Incentivising staff. Allowing staff to grow with you by giving employees a share in your success through share schemes and Enterprise Management Incentives can motivate and create loyal team which will drive the business forward.
- R&D tax credits – Businesses that carry out research and development (R&D) can often reduce their tax bills by claiming relief for some of their R&D expenditure for new products for resale or developing new products or processes for their own internal use.
Should you have any queries or require any assistance / more information please get in content with our friendly expert James Johnson on james.johnson@hhllp.co.uk or 0330 024 3200.
