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ICAEW offers advice for people starting a business
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The Institute of Chartered Accountants in England and Wales (ICAEW) is aiming to encourage greater entrepreneurialism in the UK through the launch of a new guide.
Launched to coincide with the announcement of a new funding scheme for small businesses, the ICAEW document offers a number of tips for people forming a company.
Robin Fieth, executive director for members and operations at ICAEW, said "deciding to start a business is the easy part; getting it up and running is much harder".
He called on businesspeople to improve their chances of success by following a number of key steps to company foundation and growth.
"Improve your chance of success by thoroughly researching your business idea," ICAEW urged.
"It will help you make the right decisions on issues such as location, promotion and funding requirements."
Business founders also need to select the most appropriate business structure, as the decision to operate as a sole trader, limited company or partnership will have implications for tax and raising finance.
In terms of obtaining finance, businesses need to present "a convincing picture" of the business’ financial condition and future prospects, ICAEW claimed.
This is crucial if the company is to obtain credit from the banks or from government funding initiatives, the accountancy body added.
Business founders need to ensure they inform all the required parties, such as HM Revenue & Customs and the local authority.
They will have set the business up through Companies House, and been required to comply with all regulations and requirements outlined by the agency.
"Every business is required to keep financial records according to HMRC guidelines," ICAEW stated.
"If your records are inadequate in any of these areas, you could risk breaking the law."
The body said that identifying profit and loss is "essential" and monitoring cash is "critical" if the business is to grow successfully.
Businesses should plan ahead and compare forecast figures with actual results, ICAEW claimed.
"Using accounting software to manage your accounts can make a big difference to your business. It provides fast and detailed information, which saves you time and money," the body stated.
Posted by Stephen Wilkinson
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