Everybody knows that setting up your own business involves a lot of hard work. If you’re passionate about your chosen industry, you may relish the challenge of applying your skills to make sure your new company thrives. However, when it comes to the complex financial and administrative decisions that are essential to starting any serious business, many entrepreneurs find themselves outside their comfort zone.
Attempting to take on these challenges without expert assistance can place you on the back foot before you’ve even started trading. That’s why speaking to an independent financial advisor or using a professional HR software should be near the top of every new business owner’s to-do list.
Why an independent financial advisor?
Working with a financial advisor can not only reduce your workload, it can also help you to avoid legal and financial pitfalls that may prove costly down the line. There are a number of guidance-based services available when you’re starting a new business, but the majority are either unable to offer personally tailored advice, or are limited in the products and services they can recommend to you.
Only an IFA can offer dedicated long-term support based on a complete understanding of your business needs, providing informed and impartial recommendations based on your specific circumstances and priorities. In addition to helping you to keep the background essentials running smoothly while you focus on the day-to-day elements of making your company succeed, they can also assist in sourcing other third party specialists such as accountants, payroll companies and insurance brokers.
How an IFA could help your business
Business Structure – Setting up your business structure and registering as either a Sole Trader, a Limited Company or a Partnership is a fundamental decision that can have major legal and financial implications for the future of your enterprise. An IFA can guide you through this process, identifying any risks and ensuring your company is well positioned for future growth.
Tax Management – Keeping your taxes in order is essential, but attempting a DIY approach can be a time consuming headache for any business owner. An IFA can offer guidance on making your business as tax-efficient as possible, keep you abreast of changes to tax legislation and identify opportunities to bring tax benefits to your company.
Insurance – From employer and public liability to theft and damages, there’s a lot that can go wrong when you’re running a company. Anticipating potential threats is an essential element of setting up and maintaining a healthy company. An IFA can help you to identify anything you might need to cover, before exploring the market for the best value quotes from insurance providers.
Pensions & Auto Enrolment – By 2018, all UK employers will be obliged to provide a workplace pension to which staff will be automatically enrolled. An IFA can help you to understand the requirements of Auto Enrolment, and assist you in setting up an appropriate scheme for your company.
Employee Benefits – To attract and retain high quality staff, it’s important to make your company an attractive place to work. In addition to offering a generous salary, many businesses offer employee benefits. These can range from health insurance and gym memberships to company cars and product discounts. Many of these benefits have tax benefits, and need to be run according to certain guidelines. An IFA can help you to understand which incentives could make sense for your business, and assist you in the set-up and administration.
Business Premises – Finding an appropriate base of operations is an essential part of launching a new business. Whether you need offices, industrial space or a well-located store, an IFA can help you to balance your business needs against your budget. They can also help you to get the best quotes for commercial property insurance.
Finding an Advisor
To ensure that you’re receiving impartial, professionally qualified business advice, you should only speak to an FCA-authorised IFA with a minimum level 4 qualification in financial planning or similar. You can confirm your IFA’s regulated status by checking against the FCA’s free online Financial Services Register.
Most advisors will offer a free initial consultation to gain an understanding of your situation. Based on this consultation, your IFA will usually put together a proposed plan of action, including a full breakdown of costs for their service.
With all the other costs associated with starting up a business, working with an IFA may seem like an expensive luxury. However, it’s important to bear in mind that a good IFA should be worth more than the cost of their services in the long run, and the decisions you make now will affect your profitability throughout the life of your enterprise. 50% of all small businesses fail in the first couple of years. The right advice can help ensure that yours isn’t one of them.
John Lucas is the content marketing manager for Local Financial Advice, a free service connecting individuals and SMEs with FCA-regulated independent financial advisors.