Four things you need to know when formulating your company
Starting a business is one of the most exciting things an individual can do. Coming up with the idea, building the prototype, getting feedback, closing your first deal. The buzz is unbeatable.
The formation of your company is one of the most important stages in the life of your business and securing it’s future, especially when it comes to convincing an investor to fund your venture. Setting up a company is not straightforward and in many cases one of the most daunting things about becoming an entrepreneur. Where does one start?
We talk to entrepreneurs and company founders day in and day out. They’re all inspiring individuals who have taken the leap from full time employment to ‘doing their own thing’. Let’s explore four things that are imperative to formulating your company.
1. Naming your company
It is far too easy for a business owner to settle on the name of a company because it’s the first thing they come up with, or they can’t think of an alternative. Your name will have repercussions when it comes to marketing, search optimisation, branding and your website, so think carefully before you choose. Something catchy, applicable to your industry and friendly to search engines is vital. Check out this handy guide over on entrepreneur.com “8 Mistakes To Avoid When Naming Your Business” to help you get started.
2. Business banking
Business banking can be a minefield. Which bank should you go with? Who’s got the best rates? Will I get charged for transactions? There are numerous benefits to having a business bank account, and you will have no issues differentiating between business income and expenditure and personal. Moneysupermarket.com has a great article on which account to choose and the pros and cons of each.
3. Business insurance
We know, we know…not the most exciting thing to talk about, but incredibly important to have in place. There are several types of business insurance that you need to explore when starting a company; public liability, employers’ liability, property and professional indemnity are just four of them. Without sounding like too much of a cliché, accidents happen, and it is best to be as well protected as possible.
4. Setting a business structure
When you start a company, you need to decide on its structure, and what path you choose will depend on a few factors. This is something a VC will look at closely during any potential funding deal. Most businesses fall under one of the following:
- Sole trader
- Limited company
All investors will want a share of the company in return for capital. Whether you’re just starting out or have been operating for a period of time, if you are looking for funding ensure your company is structured in a way that can issue shares in the event of an investment deal.
We’ve curated a short list of other helpful links from various VC company websites to help you when thinking about formulating your business. Check them out here:
Notion Capital Lessons Learnt Top 10 http://www.notioncapital.com/article-categories/lessons-learnt-%E2%80%93-top-10
Midven’s FAQs when it comes to raising capital http://midven.co.uk/resources/faqs/#.U4dMwXJdXAk
Dawn Capital’s resources http://dawncapital.com/#dc-resources
Accel Partners resources: https://theaccelblog.squarespace.com/?tag=Resources