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Leaving the warmth and comfort of the corporate bosom, especially to start your own business, can be a mighty wrench.

Would-be entrepreneurs must sacrifice the security of a monthly salary, company pension contributions, paid holiday leave, a company car and a host of other benefits in return for a career suddenly heavily laced with uncertainty, at least in the short term.

Becoming your own boss is not a decision to be taken lightly, even though creating a new enterprise has been likened to setting sail, single-handed, on a round-the-world voyage after spending an afternoon practising on the local boating lake. In other words, that’s as much preparation as you could possibly expect: ultimately, when it comes to setting up on your own, there’s no substitute for taking the plunge.

However, budding circumnavigators of the entrepreneurial globe invariably possess drive, that rarest, but essential commodity, which enables them to declare a metaphorical ‘anchors away!’ on their journey towards achieving their particular ambition. It follows that the ambitious business owner blessed with plenty of energy, commercially sound ideas, access to capital and a large dollop of luck, has a great chance of achieving his or her goals.

The analogy between starting a new business and embarking upon an adventure is apposite, even though it’s one for which it is difficult to prepare.

Many business owners start (as your correspondent did) in a spare bedroom, only to discover the large desk, comfortable chair and other office accoutrements previously taken for granted – telephones, copier, filing cabinets, files etc – must now be bought using one’s own cash. Faced with a similar dilemma, your correspondent used an ironing board as a makeshift desk for several months before discovering the obvious, if initially expensive, appeal of a serviced office.

The determined entrepreneur can overcome all manner of obstacles, provided they understand the over-riding need to generate business and achieve positive cash flow as soon as possible; the business owner who quickly succeeds in getting these two essential elements of commerce right is on the way to commercial success.

Yet as anyone who ever set sail on the entrepreneurial journey will tell you, there’s a lot more to consider than increased sales and cash in the bank. That’s the easy part. There comes a point, usually quite early in an enterprise’s life, when staff must be recruited and trained; when a longer-term sales and marketing strategy is required; when additional finance is needed to fund growth; when new premises become essential. It’s the business owner’s job to keep a steady hand on the tiller while remaining mindful of this, initiating change, servicing existing customers and attracting new ones.

Little wonder that business ownerssoon appreciate the need for professional assistance, especially with essential administrative matters no business dare avoid.

When it comes to encouraging businesses, irrespective of the stage at which they might be on the development cycle, the Isle of Man is a more attractive option than most other jurisdictions. Nevertheless, every Island-based company’s statutory accounts must be submitted on time and in the correct format to avoid it incurring a fine. Similarly, once a company’s turnover goes beyond the appropriate threshold (£82,000 from April 2015), VAT must be charged, collected and paid, while staff recruitment creates another administrative task: payroll management and, of course, payment of the employer’s and employee’s National InsuranceContributions, as well as wages.

Collating the data necessary for submitting accurate accounts, VAT returns and PAYE paperwork is not something that can be done at the click of a finger.

Every business owner in the world has, at any given time, a broad idea of his or her corporate liability vis-à-vis tax, whatever it might be called (VAT, NIC, income tax etc – they’re all outgoings); it’s part of being the boss. However, there’s very little point advising the tax man that you believe your VAT liability is “roughly” £x or £y; the repercussions are likely to be less than favourable. In other words, the need for accuracy is paramount – after all, no business wants to pay too much tax.

The overwhelming majority of small- to medium-sized businesses have little initial need for costly accounting software designed for much larger corporations which produces data relating to earnings per share, asset turnover or capital gearing.

Instead, most prefer to deal with experienced companies capable of fulfilling the necessary book-keeping and administrative roles. There are, of course, a number from which to choose, but the growing businesswill, at some point, also have a need for longer-term forecasting, an exercise ideally undertaken by a firm infused with similar levels of entrepreneurial spirit. There are significantly fewer companies capable of combining efficient accounting support and longer-term forecasting. Business owners wishing to relieve themselves of the ‘back-office’ administrative burden and speak with a company who can help them develop their enterprise should bear this in mind too – after all, it’s another important part of being the boss.

 

Sterling Business Solutions: Helping you focus on growth.

© 2021 Sterling is a Registered Business Name of Sterling Holdings Limited. Sterling Trust Limited is registered in the Isle of Man Number 72969C and is licensed by the Isle of Man Financial Services Authority.

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