The Key Decisions
The most important decisions a new – or changing – business needs to make.
The sooner the better!
Business Identity and Market
1 What specific group of people is your target market?
2 What is their specific need / want that you are able to meet?
3 Can you meet it at the right price?
4 Will that price and the likely number of potential customers provide a good annual profit?
5 Does your business logo generate positive feelings with your target people?
6 Does your business name generate positive feelings with those people?
7 Is your business name legal – especially if you are forming a limited company?
8 Is your website domain name available – if so, have you registered it?
Budget and Pricing Strategy
9 Have you got a clear, written pricing strategy?
10 Do you have a pricing model which can be flexed for different customers?
11 Does your average expected profit in this model tie in to your sales margin budget?
12 Have you identified all the overheads of the business?
13 For major items over 5% of sales, have you got quotes or agreed prices from suppliers?
14 Have you included a contingency budget of at least 5% of your sales?
15 Have you decided how quickly you can expect your customers to pay you?
16 Have you decided how your customers will pay you – cash, standing order, credit card etc?
17 Have you prepared a cash flow budget based on how quickly your customers will pay?
18 Does your cash flow budget also reflect how quickly you’ll need to pay suppliers?
19 Have you prepared a budgeted profit and loss which reconciles to your cash flow budget?
20 If you are borrowing externally, have you prepared a budgeted balance sheet?
Accounting, Banking and Trading Structure
21 Will you be a sole trader, limited company, partnership or other structure?
22 If you are forming a limited company, have you carefully considered the pros and cons?
23 Have you decided what date you’ll make up your accounts to?
24 Who will the key users of your accounts be?
25 What accounting system are you going to use?
26 Are you confident your system will meet the needs of all the key users?
27 What are the key controls in your accounting system?
28 Are you clear on what the maximum external funding need will be?
29 Have you obtained that, or at least are in the process of obtaining it?
30 Have you opened a bank account for the business?
Health & Safety, Pensions and Insurance
31 Is your plant & equipment safe? Can this be demonstrated?
32 Are you putting enough money aside for your pension?
33 Have you registered your business with the HSE, data protection etc. if applicable?
34 Have you got insurance policies in place to meet the needs and obligations of the business?
35 Have you considered the safety issues for electrical equiment, chemicals, etc?
Your staff
If you are employing people in the business:
36 Have you got employers’ liability insurance?
37 Have your premises been checked out by relevant bodies e.g. fire service?
38 Have you set up an accident book?
39 Is your workplace a healthy environment not unduly hazardous to staff?
40 What sort of pension scheme are you offering staff?
41 Have you had legal advice on the employment contracts you are going to offer?
42 Have you set up a robust payroll system?
Your business premises:
43 Do the premises meet the physical needs of the business?
44 Do the commercial terms – length of lease etc. – meet the needs of the business?
45 Do you fully understand how quickly you can exit the premises and stop paying the rent?
46 Have you told the local authority and had the rates assessed?
47 Are all the necessary utilities – gas, electric, photocopier, telephone etc. – connected?
VAT, legal and tax
48 Are you legally required to register for VAT? If yes, do so when you get your first order.
49 Have you registered with HMRC by phone or online?
50 Have you chosen your accounting end date with tax in mind?
51 Are you going to use annual accounting, cash accounting or the flat rate scheme for VAT?
52 Have you registered for all of the VAT schemes you want to be part of?
53 If you have a limited company, have you complied with all the statutory obligations?
54 If you have a limited company, have you got a system to comply with ongoing obligations?
55 Are your records clearly separating private spending from business spending?