Deciding to start your own business is a big decision. Congratulations. The next most important thing is to figure out the right decisions to set up correctly so that you are prepared to keep your business running successfully.
Statistics show that one out of five new businesses fail with only 10% of startups making it past the first year. These numbers are chilling for prospective business owners. However, brave prospective business owners still walk through the doors of Flyingcolour Business setup and Accounting & VAT Services where the company-setup consultants have guided 10,000+ businesses in their setup stage, ever since the company was founded 15 years ago.
We spoke to the Managing Director of Flyingcolour Business setup and Accounting & VAT Services, Ms. Mamta Raj, to understand how the company helps business owners thrive where they might have been disheartened and she shared some of the common startup mistakes that they caution new business owners against. Here are few of the common ones.
Inadequate capital that jeopardizes a company’s ability to finance its operations. Most entrepreneurs do not intentionally start off undercapitalized. This often happens when they either overestimate the market for their products and services or underestimate how much capital they will need before their business can break even. This results in financial pressure that can only be avoided by mapping out business setup costs at the initial stage of the business.
“The need for sufficient capital while starting a new business cannot be downplayed. More so, the need to be precise when evaluating capital needs. Prospective business owners miscalculate their startup costs by more than 30%. They don’t clearly map out the costs that will be involved in setting up their business and running it to break-even point, and even when they do, their predictions are widely unrealistic. At Flyingcolour Business setup and Accounting & VAT Services, we offer our clients real planning support by mapping out their initial costs for business setup expenses. We also outline for them what these costs will look like when they’re ready to renew their license one year or even three years later.” Commented Ms. Mamta Raj.
The company’s knowledge and information platform – www.flyingcolor.net – helps business owners in this stage by offering comprehensive knowledge and extensive experience articles. This is followed by a face to face consultation and once the prospective business owner has made the decision to proceed with the set-up, Flyingcolour Business setup and Accounting & VAT Services setting up an online tracking tool where the business owner can view the startup-costs real time.
Another often overlooked mistake is pushing business setup costs beyond the company’s means. While most business owners are aware to keep personal expenditure within their means especially when running a new business, they tend to forget that business expenses need to be controlled too. Especially when they have sufficient capital to set up their business.
“Set up costs go beyond the license and registration of a business and into rent, visas, technology and marketing costs. While optimism is important, we often advice our customers to be conservative in some of their spending. This includes outlining to them suitable locations for affordable rent and tactical planning on how and when to initiate other steps of the startup phase that come with significant costs.” comments Ms. Mamta
Another common mistake that businesses make is not taking the time to educate themselves on the various regulations and points of exposure that come with the different trade license formats. Legal compliance protects the company’s best interest, therefore, understanding to the regulations cannot be emphasized enough.
”We often see prospective business owners whose minds are set on registering their business in a specific zone, either because it is cheaper or closer to home. Or because it is where their competitors are set up. This is not the safest way to decide on a business setup location.” Ms. Mamta advices.
Prospective business owners must take time to understand the legal structures and exposures that comes with every different kind of license. Each business zone is governed by a different authority, and while the country’s rules apply, the legal and structural differences exist for each zone and each trade license type. Flyingcolour Business setup and Accounting & VAT Services provides guidance to prospective business owners and highlights the significance of each license type, the best structure and rules and regulations that need to be adhered to.
“A sole proprietorship means executive independence to make all financial and business strategy decisions. At the same time, it also means 100% culpability in case of business debt, losses, liabilities or litigation. If a business deals with a lot of 3rd parties like suppliers and distributors, it is important to note that any errors or omissions made by such 3rd parties in serving your business may implicate and affect your business too. In this case, it is important to select a license type that ensures those legal protections on a personal level.” Ms. Mamta adds.
Ms. Mamta Raj recommends that business owners choose license formats that allow them to make clear distinctions between the personal and the company as separate legal entities. This ensures that the business owner can properly protect themselves from business liabilities and any kind of litigation that can easily lead to bankruptcy.
Flyingcolour Business setup and Accounting & VAT Services concludes by stating that all mistakes can be avoided or mitigated, and the company plans to continue guiding more entrepreneurs on the path to success.
To learn more or book a consultation, please contact Flyingcolour Business and Accounting & VAT services on their website – www.flyingcolour.net