How To Learn More About Business

Many business founders have encyclopedic knowledge about how their organizations work, as well as how to gain and to retain profitable customers. Why? Founders have probably either designed or done all of the major tasks at one time or another and may have played a role in attracting almost all of the key customers. Doing so was just part of what was required for their businesses to succeed.

When it comes time for founders to replace themselves, one of their most difficult challenges is finding someone with the right experience. Starting new employees in entry-level jobs and rotating them through as many other kinds of jobs as possible can help, but it's a slow process and most ambitious people don't want to invest the required time and effort.

By contrast, business education originally focused on teaching just a few skills such as accounting, quantitative analysis, and what was then called industrial organization. Such skills were often helpful for understanding how a business was performing, as well as for identifying and assessing alternatives.

A key drawback of this educational approach was that the overall perspective of a business founder couldn't be gained from learning just these skills. What could be done instead?

In response, business schools began to think about ways that people could much more rapidly add relevant experience. One method of accelerated learning emerged that has continued to be important to this day: Document case studies of actual business decisions, ask learners to analyze the situations, and assign them the tasks of identifying and choosing what to do. When the learners are ready, engage them in Socratic dialogues about the case and their conclusions.

It was hoped that by grappling with these difficult challenges learners could gain opportunities in just a few months to consider many more important decisions than they might normally be involved in over several decades. Would mature business judgments be far behind?

When learners had to explain and defend their choices orally and in writing, they also gained some experience of what it is like to operate in an organization. In addition, learners benefited from objective reactions to their views. With such perspectives, business learners could potentially avoid some future mistakes by improving on their ways of thinking and deciding.

The concept of using case studies for learning through Socratic dialogues was originally drawn from how Harvard Law School taught about appellate-level judicial opinions. The business cases subsequently written at Harvard Business School soon became the backbone of many curricula for graduate-level business programs at many highly regarded universities. Ways of writing and using such cases began to proliferate in useful ways.

Wise educators also realized that experience still provided some lessons that just studying cases couldn't. As a result, business educators encouraged learners to gain some business experience before trying to add more advanced management skills in classroom experiences. Most business schools also required students to work on real-life projects for existing businesses from time to time, to provide more relevant learning.

A few business educators also realized that skill development needed to be closely aligned with a theoretical understanding of what the overall organization needed to accomplish. From teaching such insights, the business disciplines of management and corporate strategy emerged.

As a countertrend, more and more business subjects became specialized, so that less and less of any learning was focused on gaining a founder's kind of perspective and knowledge. To respond, evening and online business school programs were developed for mid-career businesspeople to flesh out whatever it is that they hadn't yet learned that was needed to do their jobs better... and to prepare them for taking on bigger responsibilities, especially in general management.

Instead, many businesspeople in the last two decades decided to bypass formal education and simply worked with coaches who had such knowledge and asked for practical advice about their most pressing concerns and issues.

Clearly, all these ways of learning more about business have their good points. Wouldn't it be wonderful if they could all be combined?

That hope isn't as far-fetched as it might seem. Some of today's leading business scholars are as drawn to gaining insights into how others can learn more about business as they are to obtaining more knowledge about business for themselves.

Whenever I think of combining new knowledge with better learning for businesspeople, I'm reminded of a friend who is a business professor. While many people imagine all professors as being ivory tower types, he's just as likely to be seen scoring a goal or earning an assist for his ice hockey team as he is to be found reading in the library.

He applies more teaching methods than most other business professors do: In addition to online teaching that emphasizes helping business practitioners to learn and to apply theory, he is highly effective in a bricks-and-mortar classroom setting while leading many sections of management accounting classes for BBA and MBA candidates at a highly esteemed North American business school.

To make those online and classroom classes more valuable for learning about business, this professor has researched and written two business case textbooks, the first including some cases developed as part of his doctoral studies.

In addition, he provides executive coaching and education through his personal consulting practice.

While teaching people with widely varying amounts of experience and knowledge, my colleague gains understanding about what works best for individual students and his mind is opened to opportunities for teaching business more effectively through using the many available methods and resources.

Curious about what insights he had gained about business learning online, I asked him to describe how this method differs from other ways of learning about business. Here is what he told me:

"Although I also teach extensively in the traditional bricks-and-mortar university setting, I notice that online learning is effective because students are interested and engaged, and they retain this learning far greater than with a preset menu of courses.

"Determined and self-driven students will always surprise you. Students who are committed to self-learning are willing to listen, take constructive criticism positively, and always push their boundaries. I appreciate students who can do this and keep their personal lives in balance."

He also offered this advice for those thinking about online business learning based on both his student and his teaching experiences:

"It is not easy. A great deal of self-discipline is required to stay the course. Find your moments of greatness through research and writing. Establish a bond with your faculty advisor and draw from his or her experiences. Engage in something you are passionate about, aided by one-on-one mentoring without a preset menu of courses. It's a very powerful and rewarding way to learn."

So what's the right way for you to learn more about business and become as successful as a flourishing founder? The more of the proven learning methods you can apply to what you want to accomplish, the more effective you will become. In that regard, be like this professor and place as much emphasis as you can on using all of the methods that apply to your learning needs.

How to Mix Business and Friendship

Have you been told to never mix business and friendship? Or heard that it is "a cocktail for disaster" that will destroy your friendship, and yet despite these warnings, find yourself excited about a new business venture with your B.F.F (Best Friend Forever)? Well, if you are, you have come to the right place!

Today's "love affair" can be tomorrow's "divorce" if business partners are not vetted well. Indeed, it is hard enough to know your own mind, let alone someone else's.

So, when "courting" a friend as a new potential business partner, why not take a few days to follow this 10 easy steps to ensure both your business and friendship thrive!

Individually write out your vision for the new business.Be sure to go into as much details as possible. Be explicit! Do not rely on your friend "thinking" the same way as you do. Consider things such as how much time each of you will put into the business (on a weekly basis), what in competitors it will have and what will you do to be unique in your market?

What responsibilities will each of you have? What roles will each of you have? What hours will you each contribute? What is most important to you? What are your personal and professional goals? What do you hope to achieve and in what time frame? What if it doesn't work? Do not be afraid to discuss the negatives, thoroughly!

Clearly define what success & failure in the business means to you? What financial return do you need to survive in the first 12-24 months? Some people might have to exit out of a new business venture, if it cannot cover their day today expenses after 6 months (For cash flow reasons). For others, the size of return on their time and money may be a factor that sees them lose interest in the business. Imagine the horror of discovering your business partner wants to pull the pin on a business that you think is doing well, because their expectations are different from yours and you had not discussed it prior to the venture!

And then there is the money bit! What financial capital is required to start the business? Where or who is that coming from? How will profits be distributed? How much will be reinvested back into the business and how much will be taken by the owners as "return" on their investment? What if you run out of money and money cash is need to keep the business afloat? How will shares be diluted or other investors bought in?

What about what the expenses? Clearly outline what expenses the business will cover and not? How much can one partner spend without consulting the other? Clearly define a process or protocol to handle disagreements?

Then there is the time issue? Who does what and when? What about when one partner puts in many more hours than another? How will you handle this?

What is your exist strategy? Is this a business you want to build to sell or pass on? Go into the business with the end in mind! Do not be afraid to discuss the tough topics, like "What if one of us wants to leave the business and the other does not?"

Then it's time for Group Share! Once you have dumped your personal manifesto and vision for the new business on paper, come together with two copies each. Then pass the talking stone!! Read each others ideas, share the excitement, clarify points of agreement and disagreement. Once done, I recommend a good meal!! (complete with wine!) Go home and read over your own vision again, then your potential partner's (Yes, that is why the two copies!). Do this daily for a few days and let the ideas percolate! Your first ideas are often good, but great ideas may require effort and thinking!!

Then write it all down together! Once you have decided that you do have a shared vision, common goals and time frames, sit down together and write your mission and vision statement together along with a memorandum of understanding, outlining everything you have shared and schemed in the previous days! The more detail the better.

Once done, find a good lawyer to help you set up the most appropriate entity (company, trusts, partnerships etc) for your venture.

Remember, it is cheaper to ask for help at the beginning, rather than later!

All of the warnings you will hear are well founded! I have seen a number of my friends have a seriously tough time together, over business ventures that have absolutely tested the fortitude of the friendship. Luckily, in most cases the friendship has prevailed, but this is not always the case!

The 3 "Must Do's" Before You Start A Small Business



So you've got your small business idea and you want to start a small business. What do you need to do to get your small business off to a flying start?

I am going to share with you what I believe are the 3 most important things to consider when starting a small business, especially a bricks and mortar business.

1. Research

You will need to carry out thorough research on the products or service that you are going to be selling. When I started my first business more than twenty years ago, my original business idea was to open up a pet shop. I wasn't actually sure whether there would be a demand for that type of shop, so during one of my week's holidays I actually parked in the main shopping street for 6 hours a day for the whole week and carried out thorough research including:

Counting the number of people who visited the shops each day.

Speaking to shoppers to ask whether they felt that there was demand for a pet shop in that area.

Speaking to other shop owners in the locality to ask for any tips that they could give me on the best ways to start a retail business.

Checking what other competitors were doing in order to offer better.

Checking location i.e. making sure that there was a market for what I was selling within a given area and that I could achieve the desired profit margins within that location. Location is very important when considering a bricks and mortar business as property leases and the prices that you can charge for your goods or services, are largely governed by location.

Needless to say I did not open a pet store but I opened up a chain of convenience stores instead based on using the same research techniques.

2. Create a Good Business Plan

You can have the best small business ideas in the world, but you will seldom get them off the ground without financial backing. In order to gain that all important backing you will first of all need to present your potential lender with a business plan.

Do not be out off by this. All too often you will already have the business plan already in your head and will merely need to put in down on paper. Some things that you need to include when writing a business plan are;

The product or service that you are going to provide.

Who your targeted customers are going to be.

The cost to make or buy the product to sell on or how much it's going to cost you to provide the service that you are going to be offering.

Your operational costs including rent, staff, fuel, vehicles, equipment, stationary, materials, legal fees, advertising etc, etc. You will need to ensure that you list them all.

The location where you are going to be offering your goods or services.

3. Financial Planning

Financial planning for a new small business is not just about how much money people they spend but more about planning the amount of sales that you hope to make each day, the purchases you will need to make, and the income that you expect to make after deducting the overall costs of trading. Many small businesses fail in the first year of trading because of poor cash flow. Below are some suggestions of how to avoid cash flow problems within your first year of trading:

Create a "small business cash flow forecast. Simply write down all of your expenditure costs for each month for the first year of trading and then add them up. Then write down what you think you will achieve in sales. Deduct one from the other and this will provide you with the targeted amount of sales that you will need to make in order to break even or make a profit.

If you don't feel confident to create your own cash flow forecast, you could ask an accountant to do it for you. They could also create a profit and loss statement for you at the same time.

It is advisable to have some emergency funds set aside when starting a small business. Every new business needs money to get started, even if is only to buy stock or stationary.

If possible try to allow a sum of money equal to the projected turnover for the first year of business to allow for any cash flow problems.

Get the best deals from your lender. Some banks like Nat West and HSBC now offer free banking for 2 years for all new small businesses. Check out a few banks as they all offer something unique.

Don't be disheartened if you get a few refusals. Just remain focused on your business idea and remain confident in your approach when discussing your business plans with the business advisor.

I can remember when I started my first business, eighteen lenders turned me down. However I didn't give up and eventually a bank manager situated 90 miles away believed in my passion and drive to start my own business and decided to lend me the money that I needed.

So there are, what I believe, are three most important things to consider when you start a small business.

My name is Roy Derrick and I have over 20 years experience in running my own business. Over the years I have set up and sold several successful businesses including a chain of retail stores and a construction company.

How Can a Business Grow in Today's Economy

When I visit local businesses as a customer and ask, "How's business?" The answer I hear a lot is, "It's slow. But what are ya gonna do? How can a business grow in this economy?"

It's a fair question because these are indeed tough, scary times. The economy is unpredictable, seemingly unstable and mostly unfriendly when it comes to owning and operating a small or medium-sized business.

Honestly though, I'm utterly shocked at just how unpredictable, seemingly unstable and mostly unfriendly MANY business owners are to their customers, clients and patients. It's one of the few things in this world that leaves me completely speechless.

During the past 12 months, I have driven over 15,000 miles on various cross-country road trips across the United States. I've spent weeks in Seattle, Washington, D.C., Vermont, Philadelphia, New York City, and everywhere in between. All along the way I've stopped at a bazillion different businesses.

To my amazement, the thing 80% of those businesses had in common was that they proved to me just how little they cared about me as a customer. As far as they knew, I was a local resident who was a potential, life-long customer of theirs. It didn't matter. They just didn't care about me. The more the business appeared to rely upon location and foot traffic, the more they seemed to treat their customers with disdain and contempt.

Think about it...you've had similar experiences in your own community...perhaps even today. Sadly, those kinds of businesses are the norm these days.

In many cases, I left without purchasing anything...even though I'd gone with the intent (and money!) to buy.

As a business growth strategist who has dedicated myself to helping to grow businesses, obviously I'm more hyper-vigilant and sensitive as a customer. Regardless, behavior and attitudes that are blatant and obvious to me still register with your customers...at least at an unconscious level.

"To him that watches, everything is revealed." (Italian proverb) Start watching more closely when you're visiting another business as a customer. You'll see what I'm talking about.

But, if you're really brave, you'll look just as closely at your own business. Watch your staff as they interact with your customers (and each other). Notice any subtle "attitude" or general unhelpfulness. Notice any laziness in their lack of resourcefulness and lack of proactivity. Count how many times they say "no" or "sorry, we can't/don't do that" during a day and a week. Try to witness it all as your customers would. You'll learn tons!

Amusingly, these businesses all shared one other thing in common. When asked how their business was doing...almost all of them blamed the economy for how bad things were. I guess they also blame the economy for their hostility, rudeness and stinginess towards their customers. They can't expect to grow their business when their attitude towards their customers drives those customers away.

The lesson here is...until you are willing to do the very best with what little you have now (especially in the way you treat your customers), anything and everything else you do to grow your business is just going to accelerate the rate at which you drive your business into the ground.

In a culture where people blame everyone and everything for their troubles (sometimes warranted, but very often NOT), those business owners who take responsibility for themselves and do the most and best with what they have stick out like a sore thumb. In a good way!

So, how can a business grow in today's economy?

Here are a few things business owners can do immediately to turn things around (without spending one dime):

1) Make it super easy to do business with you.

Don't miss the power and simplicity of this step.

This week alone...while in NYC...I've had several encounters with business owners (as a customer) where I left determined NEVER to return. They just made it way too hard to do business with them!
What do I mean? Well, they only take credit cards if you order a certain amount; they only deliver up to the street directly adjacent to mine; they only give a fortune cookie when you order an entrée; they treat you like dirt when you try to redeem your Groupon purchase; they take 5 days to reply to your urgent email and then don't even answer the specific and clear questions you asked; they charge your credit card and then take 13 days to ship your package (and never reply to your inquiries); etc.

Do you see how ridiculously simple and easy every single one of these would be to fix? Yet this happens in every industry, all the time. Some of these infractions seem small and petty. But, all of them are meaningful to prospects and customers.

Why turn down a customer who would likely order from you three times a week just because he's one block outside of your arbitrary delivery zone...especially when you already charge a delivery fee?

Why allow customers to think you are the cheapest restaurant in town for refusing to give a $.03 fortune cookie because you ordered an app instead of an entrée? Why put an offer on Groupon and then allow your staff to treat everyone who responds to it with contempt...ensuring they NEVER return...and ensuring that they tell everyone they know about their horrible experience? Why knowingly wait forever to reply to an urgent email and then fail to even answer the questions (or apologize!)?

This kind of behavior occurs EVERY day in way too many businesses. It really is baffling. Get this area under control and you're way ahead of the curve!

2) Do the math before you try to save money in ways that drive away business.

An Asian restaurant near my apartment has the very best cold sesame noodles on the planet. I walk by there 2-3 times every day. They have a credit card minimum of $10. The noodles are $5. I don't like to carry cash and prefer to pay with credit. I currently stop by whenever I happen to have cash on me and get the $5 noodles to go. (I rarely make a special trip to the ATM for such a purchase.) They've seen me enough times that they start punching in my order as soon as I cross the threshold. I've explained that I would likely stop by 3-5 times per week (instead of 1 or 2) if they would let me use my credit card. They refuse because it's "restaurant policy". It's insane.

The problem is that they haven't done the math. Now I hear many business owners protest, "But, you don't understand! The banks get a cut of every purchase and that cuts into our margins!"
I understand completely. What they fail to consider is that if I spend $5 on each of 4 separate visits...and the bank charges 5% per transaction...95% of $20 is more in their pocket than getting 100% of the $5 or $10 I've been spending due to their restrictions. In other words, in order to save a little on their margins, they keep customers like me from buying more often. They make it harder to do business with them.

Worse, they send me away to do business with their competitors. If given a choice between an independent coffee shop which has a $10 minimum (where I'd have to get cash every morning) and a chain (like Starbucks or Dunkin Donuts) who gleefully accepts my credit card for even a single donut...guess which one I (and most of their customers) will choose every time?

I detest jumping through hoops to give them MY money. Other customers do too!

Now, they can continue to make excuses about how their business is different because they're not a chain. Blah, blah, blah. Or, they can ask their customers what they want and then sit down and do the math. In most cases, doing the math will prove that both the business owner AND their customers will benefit. More transactions (no matter how small) that come in because of ease of doing business with them...adds up over time.

Side note: I know this is one area where business owners think they're so savvy and smart. They think it's a clever way to force customers to buy more than they would have in order to meet the cc minimum. "If I can get them to spend $11 instead of $4, then I've made an extra $7!!" And there may be a few fools who fall for this regularly. But, for the most part, these kinds of policies hurt a business. Customers see it as equivalent to the utter pettiness involved in being forced to buy a pack of gum or a newspaper at the 7-Eleven just to get change for $1 for the parking meter. It's not a smart move. Everything matters.

If they're convinced that they can't survive without a $10 minimum...they should empower their staff to be accommodating to someone like me who OBVIOUSLY likes something they have to offer. Until they do...I assure you that their customers are walking a very fine line between loyalty to them...and eventual patronage and loyalty to their competitors. The very second I find another restaurant with yummy cold sesame noodles (and they don't even have to be as good), who will accept credit card without a fuss, the restaurant I frequent now will NEVER see me again. Think about it.

Key Principles That Keep Startup Businesses From Failing



Very often in my Startup Business Mastery Workshops, I get asked by young entrepreneurs to advice on what I consider the three key principles they could practice to keep their new businesses from failing. After sharing these ideas with many, I thought that it would be useful to share them with you to with your startup.

Starting a new business is adventurous and according to statistics, about 80% of new businesses fail within the first two years. Notwithstanding, 90% of businesses started by people who know what they are doing to sustain their businesses, are still growing five years after.

This note is meant to give you the key drivers that influence the success of the 90% of those startup businesses that succeed? It is important to bear in mind that successful people are not smarter than you; they are just ordinary people like who have discovered how to do what they are doing better than their competitors.

If you have done everything that is crucial to start a business, it is now time for you to live by the following three principles if you must succeed.

1. Be Courageous

Successful business people are intensely courageous in their ability to take risk with their time and money. Look at it this way; a client of mine had just started his new business and everything (business name, website, good service, etc) was just ready to go. My client was not brave enough to invest in advertisement and other means of marketing promotions to get his business out to his potential customers.

My client was afraid that, typical of advertisement and other business promotions, there is no guarantee that a particular medium (newspaper, magazine, Pay-Per-Click (PPC), or Search Engine Optimization (SEO)) would automatically pull in the required sales. So he began to play it safe rather than doing what was needful.

Would you be better off not advertising and take your start up business ideas for granted? No! You must have the courage to invest anyway, hoping and believing that it would work for you.

As business coach, my job is to help my clients to develop customized business strategies that spell out the critical steps and actions to take every single day to achieve their business goals faster. To be successful at this means that my clients must muster enough courage and discipline to implement the agreed strategic actions consistently until the results they expect shows up.

The 80% of people that quit their business ideas often discover that they became discouraged very quickly about the unusual long hours and unending problems that successful start up business owners go through. This should not be your case.

2. Determination (Persistence)

Persistence is the foundation of any business. Successful startups work hard, hard, hard, and they focus on the most important areas of their businesses long enough to achieve their goals. You must determine in your mind to work hard and take the necessary steps to do what is most important for you to be successful.

When I work with clients, one of the very roles I play is to help to clarify their visions for starting a new business. We spend time to understand their "WHYs", the key drivers for starting the business and where they want to take their new business. This is crucial because, until you understand what is driving you into business, you may not appreciate the extent of involvement and sacrifice required you are required to make to become successful.

Determination also means that you must love your business and the products and services you are offering your customers. You must be passionate to share them with your prospective customers.

In the business of sports, it is often said that the time athletes, footballers, wrestlers and other sports people push really hard is when they are on the edge and hurting, when they're most tired. Likewise in running a conventional business, persistence keeps you moving constantly forward and upward across the numerous obstacles and challenges you would normally encounter until you succeed. This is what happens with success, many times it comes when you are at the edge of giving up, when you had little or no breathe to push through.

3. Be Patient

If you are starting a new business, it takes an average of four to seven (4 -7) years of consistent hard work to become successful. The lesson to learn here is that success does not happen overnight. You have to be on the road long enough to master the trends and be able to see the patterns you are looking for. What keeps you long on that road is patience.

As in farming, you must understand the three fundamental stages of sowing, cultivating, and harvesting. These three stages are natural and successful start up business observes them.

After you have done everything else to startup your new business, (as in planting the seed), you must obey the natural law of cultivation, a process that is hard to explain except to say that it is a waiting period. You cannot jump from planting to harvesting; that would be tantamount to treating your new business as gambling; a process that looks for the easy way out.

Successful business people understand that the cultivation period is outside their control, and the best way to deal with anything that is outside someone's control is to treat it patiently and calmly.

It may be true that you have taken reasonable steps to start up. Also, you may have invested in some of the best business building tools, and now the first three months have gone by with no customer knocking on your door. Another six months have gone past, yet nothing has happened instead, anxiety, doubts and worry are building up; don't despair. Be patient, as long as you are doing the right things, you will make it.

How To Start Trading Your New Business



So you've decided to start a small business and you're ready to get started but how do you start trading your new business?

Here are some things that you will need to consider to get your new business idea off the ground.

Sole Trader or Limited Company?

The first thing to consider is whether you are going to trade as a sole trader or a limited company. The type of small business that you are going to start will largely determine which option that you choose.

A sole trader is a business that is owned by one person (with no staff) who is solely liable for the company's debts and fulfilment of contracts. This type of business tends to be favoured by traditional skilled tradesmen like gardeners, plumbers, decorators, plasterers etc.

The advantages of being a sole trader are:

Having full control over the business.

It is easy to set up as there are fewer regulations to comply with. You will just need to ensure that you contact the Inland Revenue to advise them that you are self employed within 3 months of starting the business.

You won't have to complete a lot of forms unlike limited companies, but you will nevertheless, need to have accounts prepared ready for your annual self assessment tax return to declare annual profits and tax liabilities.

As there are no staff you will keep all of the profits yourself, which can remain private as you will not have to declare them to Companies house.

You will not have to register the company and therefore can be known as anything hence why so many sole traders refer to themselves as "trading as..."

You can build up a more personal rapport with the customer.

It will be cheaper for you as accountants will charge you less as they will only need to complete a profit and loss account for you.

The main disadvantages to this type of company are:

You will be solely liable for any failures or liabilities such as your business failing or property being damaged.

It can be harder to compete with larger companies who have more staff and can therefore complete work quicker.

If you become sick you will have no income. Even though you can take out critical illness insurance, some will not pay out until after 1 month.

If your business fails you could be forced to sell your personal assets, such as your house, to fulfil your liabilities.

However, as your business becomes more successful you can minimise the risks by forming a corporation or limited liability company instead.

Limited Company

Unlike being a sole trader, when you form a private limited company your are registered in such a way as to ensure that you have limited liability, with your company and personal finances being kept separate. A limited company is owned by shareholders and operated by directors. By registering your company as a limited company you will need to consider the following:

You will be subject to corporation tax.

If you anticipate turning over £77k or more per annum you must register for VAT.

As a director you will have more legal, financial and administrative responsibilities.

You will have less control over the overall running of your business as you will be answerable to the shareholders.

You will need to register with Companies House and will be required to submit an annual return along with annual accounts to them each year.

N.B.The difference between a private limited company and a public limited company is that in a private limited company all of the company shares are in private hands whereas in a public limited company the shares are owned by the public.

The main advantage of registering a business as a limited company is that directors and shareholders only have "limited liability" and therefore their personal assets cannot be touched, unlike being a sole trader.

Staffing

When you start a small business you are in effect becoming self employed and will therefore need to inform the Inland Revenue that your income may change. Even if you keep an existing job you must still inform the Inland Revenue.

The same applies if you are going to employ staff. You have an obligation to collect and pay their PAYE contributions to the Inland Revenue. The Inland Revenue will them provide your new business with a PAYE number and an account office reference number.

You can either do this yourself or you can appoint an accountant to all of this for you and to pay the wages and salaries on your behalf, which is what I do with one of my larger businesses.

Choosing a small business name

Creating a good name for your business is important. When choosing a name for a business, it is important to make sure that the name is not already in use, otherwise you could be sued.

You can either check with Companies House whether the name you have chosen is available or if you are considering an online business or having a website for your business you can go online using sites such as Go daddy to check whether the domain name that you want is available.

I personally used to think that when naming a company you should make sure that the name reflects what your business is about, but many people argue that the name should be something that is easy to remember or one that is unusual and leaves a lasting impression like "confused.com" or "funkypigeon.com". After all who would have imagined that these types on names would turn into multi million pound enterprises?

If you plan to start a limited company, then you will need to register a company name with Companies House. They in turn will issue you with a company registration number that will be unique to your new company.

Companies House will then keep details of your new business including account and address details, for third parties to be able to view.

Small Business insurance

Regardless of what small business you start, you will need to take out a small business insurance to protect your business and your customers. There are many specialist insurance brokers who can put a package together to suit your company's requirements.

Make sure that you have your insurance cover already set up before you start your small business venture to ensure that your equipment and your premises are insured whilst you are setting up your business.

Once you have implemented the above points, you will be ready to start trading your new business.

My name is Roy Derrick and I have over 20 years experience in running my own business. Over the years I have set up and sold several successful businesses including a chain of retail stores and a construction company.

My wife Julie and I currently run a home based business that specialises in finding and sourcing the best ways to start a small, sustainable business working from home.

Business is our passion and that is why we set up Perfect Prosperity so that we could share our vast business knowledge with others to help them enjoy a better work/life balance.