Affect preparation for Businesses
If a new business does not inform all appropriate government bodies of its existence at an appropriate time then it may suffer because it will not be paying taxes and will even be breaking laws by simply existing. You must always register with Companies House before you start your business so you know your business is following all laws appropriately and paying VAT and Corporation Tax fully. You should also always adhere to these laws and regulations because they will help you stay legal and avoid issues that can sometimes result in court.
Similarly, a business should always obtain an appropriate license for itself; otherwise it may result in your business not being able to be incorporated. If this is not allowed then you cannot run the business as a legal entity. Finally, make sure that you keep the records required by the government because these are needed by HMRC to track if you have been paying your taxes, not being fraudulent and staying legal in your expenditure. Keeping Records As stated above, keeping the appropriate records is a legal requirement for all businesses in the United Kingdom. There are many different ways of recording these and a variety must be kept.
This includes: Sales Records – It is important that these businesses have to keep records of all their sales and make these as accurate as possible. This can aid the business greatly in the future. Contacting past customer and informing them of deals or products that the company offers is a good marketing technique and all offers should be recorded. Since these records need to be accurate and up to date, the law will require redundant copies to be stored but not used. This can be due to taxing because the government needs to see if you are not being fraudulent, if their records match and also if you are generally operating legally.
Health and Safety Records – It is also a legal requirement for all companies in the UK to keep health and safety records. These should be backed up with checks that are carried out to give evidence that the company is complying with health regulations. One example is fire checks and drills. All employees should be aware of what to do in case of a fire. Some companies may also wish to appoint someone that can be in charge of getting employees out of the building safely. The company should always put in place a good method of escape, and should there be an accident, they should also record this.
There will be a policy upheld by the company to detail what their stance on accidents is. Risk assessments will also be a good way of minimizing risks. Some businesses will also have a health and safety officer to help them stay safe. The government’s inspections will want a large amount of evidence which will be logged and checked. Leasing Arrangements Leasing means that you rent your possessions by allowing others to hire it. Some businesses will lease their property and equipment when not needed. It is important to record these since it will help keep track of rent payments and others.
As well as payments, other information such as customer details will need to be kept in case. These should be written regularly, usually on a monthly basis to keep it up to date. Financial Records It is important to keep all financial records available so that the business can keep track of their financial stability. Some previously mentioned documents can help you do this, such as profit and loss accounts and balance sheets, since they both show how stable a company is and they can also try to tell you if the company is at a financial risk, although this does not always happen.
The company should also make sure to look at these documents regularly so that they can see if any help should be looked for. For example, a new loan may be needed. New businesses will often fail if they do not carry out appropriate research on the market and when to set up. They always need to analyze their customer’s needs and wants. Companies that do do this will most likely be stable for their starting period because they know what to charge, what to put into their products and where to sell them.
This is quite easy to do just as long as you follow The 4 P’s. To avoid problems, a business can make a questionnaire and ask the public to fill it in for first hand information. If a company does not research its competitors it can also suffer because it may be overwhelmed by them within the starting period. Competitors may steal your customers if they are charging better, or if you have few, you may be overwhelmed with the people that want to buy your product and you cannot cater to them until it is too late.
To avoid problems a business can easily go into other shops and see how they are going in the current economy, see their prices and product range. A business that has a good customer care package and build relations with customers will cause problems for new companies because customers will not want to leave the old company, especially if the new one doesn’t care much about its customers. To combat this, always make sure that your company is prepared to sacrifice some of its profits in the short term in order to keep customers happy.
It will probably result in the customers returning if, for example, they have a gift card. When setting prices you should always consider competitors prices and what customers are willing to pay because if you charge too much, they will not buy any products, but if you charge too little, you may end up with less profits than desired. Use break even charts to find the best way for you to break even, but do not forget to use the questionnaire to make sure your customers are willing to pay these prices.