James Caan: Expert advice on choosing the right business structure
As we begin to embrace the prospects of a new year, a lot of aspiring entrepreneurs will be thinking about making the most of 2016, finally taking the plunge and starting up.
If this sounds like you, then congratulations! You have both the idea and the risk appetite to take the first steps down an entrepreneurial path and start your own business. you’ve done hours of research into your market, you know your product inside out and you’ve now reached the stage where you need to put your plans into action.
Putting your plans into action, almost certainly involves very quickly having to learn a complete spectrum of skills that have so far been put in the ” don’t need to know” box. One thing that springs to mind as something that almost certainly sends shivers down a lot of people’s spines is deciding on a business structurefrom a legal and tax perspective.
One of the reasons this question is so problematic is that there is no “one size fits all” answer, and deciding whether to run your business as a self-employment, partnership, limited liability partnership or company can change based on various circumstances.
If your business is going to trade in more than one country, you also have the added headache of trying to understand how you fit your business structure in the complex world of international tax and legal agreements deciphering the right answer here can be an expensive, albeit critical project in itself.
I meet a lot of entrepreneurs who have brilliant ideas, their creativity and innovative minds are enviable, but theyve never started a business before so when it comes to the “admin” stuff they are (understandably) baffled. This is what inspired me to write this piece.
As my in-house legal and tax team are busy assisting various portfolio matters, I must confess that the rest of this columndoesnt give you all the answers, but provides some basic information about what the common UK business structure options are, and some of the questions you should have answers to before making your mind up, or seeking out professional help.
Personally, I am a strong advocate of the latter. One of the key traits of being a successful entrepreneur is knowing the limits of your skill-set and knowing when to outsource projects to people who have more experience in a specific area than you do. You should never be embarrassed to ask for help I ask for itall the time. Im constantly looking to meet new people I can learn from and who can bring something new to my team.
Not only does this help to ensure you get the best answer from the outset, it frees up your time so you can do the things you’re best at.
Renowned investor and business builder James Caan is currently the founder and CEO of Hamilton Bradshaw, a firm specialising in buyouts, venture capital, turnarounds and real estate investments.
Prior to that, he was one of the longest-running investors on BBC television show Dragons? Den, founded and exited recruitment business Alexander Mann and was the chairman of the government's Start Up Loans initiative.
His efforts were recognised when he was awarded a CBE for services to entrepreneurship and charitable services through the James Caan Foundation.
Weve arrived at our destination: the final step in our startup series. By now you should be feeling confident that you've established an exciting and viable business idea and are on the right track towards starting up successfully. more»