What Do Start-Ups Wish They Had Changed?
When you're forming a company there are several decisions you have to make. You may feel as though you are making the right decision at the time, but in hindsight, you may realise that you should have opted for something else. So we've compiled a list of things that start-ups may regret in hopes that you can avoid them.
Choosing the right company name
This is arguably the biggest decision that you will have to make when you're registering your company. Your company name is the first point of contact that any client will have for you, this is how they will get a feel of your identity and get to know your brand. The following points will help you decide whether your name is right for your company.
Is the name descriptive? - Having a freestanding company name can be good when there's an established brand behind them, take Amazon for example. Their name doesn't even hint at what it is that they do, but almost everyone knows what they do. However, this may not be suitable in all circumstances.
A descriptive name can ensure that your company is associated with a particular service. Don't mistake this as going for a boring name though, remember you can have wordplay going on. Jim's Kennels and Cattery may say what the company does but Hairy Poppin's Pet Nanny says it with a bit more pizzazz.
Is the name memorable?- Your company may have provided an excellent service to some of its clients, but how can they spread the word if they can't remember your name? If your name is too long or tricky to remember, you may be losing out on word of mouth marketing.
Is the name personalised? - When you're starting out, it can be common to have your name in the company name, take Jim's Kennels and Cattery for example. But can you imagine that being a national, household name? Likewise, if Jim was to sell the business, the new owners may not take to having his name which could mean he'll make less money from the sale.
Don't fear though, your company name can be changed at any point during the life of the business, providing the new name is available for you. Previous names are held on the public company register by Companies House.
Choosing the right address
When registering a business in the UK you will need to choose a registered office and a service address for the director. This has to be a bricks and mortar address which HMRC can use to send any correspondence to.
This may seem like a trivial decision, however the registered office address is publicly available on the company register. For this reason, it may not be wise to use your home address (it may also receive junk mail due to being public).
There are ways of avoiding this such as using a service address or the address of your accountant.
Choosing the right business partner
You may start your business with your friend / family member if you have a shared idea of what to offer. This may be able to work if the relationship is strong enough between you.
However, beware that you may not share exactly the same vision. For example, when it comes time to grow the business you may find that you have ideas in different directions. This can put a strain on the personal relationship, as well as the business itself.
Starting the company sooner
Some limited companies are started from scratch, whereas others are started through growing a sole trader set-up.
When a sole trader has a good trading year, they are personally taxed on any income they have received. However, in a limited company, the option is there to keep the money in the company in order to re-invest it back into the company.
This can be more tax efficient than taking the money out sooner. It can also be a reason many individuals regret staying as a sole trader for as long as they did.
There's hopefully some ideas here for thought. Remember to think it through and not to rush into things.