Entrepreneurs’ Hub: Guiding you through your business lifecycle

Creating your business

In the early stages of a business, one of your most important decisions is its structure.

In the early stages of a business, one of your most important decisions is its structure.

A business can take many forms; sole trade, partnership or company, and each has its advantages. The key is knowing which structure suits your individual venture.

When thinking about the best structure of your business, it’s important to look ahead. Consider how you want the business to grow and, equally, your exit strategy at the end — whether that’s selling the business or passing it over to family or employees.

To help with your decision-making process, here are a few questions to consider:

• Who needs to be involved?
• Which legal protections do you need?
• Where will the business be based?
• Do you intend to extract profits regularly from the business?
• How do you intend to exit the business and pass it over or down?

Growing your business

As your business grows, you’re bound to face hurdles and challenges. Sensible planning and advice will help you overcome them.  

For example, in the future, you might need external funding to increase working capital or enhance the remuneration packages of key employees to encourage their loyalty. At some point, you may choose to part ways from your business partners.

Whatever your next steps for growth, we can guide you.

To help with your decision-making process, here are a few questions to consider:

• Do your employees, or key employees, require further incentivisation?
• Is external investment required to enable further growth?
• Will the business be expanding outside the UK?
• Are all available tax reliefs being utilised?
• Have you considered the extraction of profit and your personal tax position?

Exiting your business

There are many ways to exit your business; you could be selling the business, stepping away but letting it continue, or simply passing it down to the next generation.

All routes have their own challenges. You will obviously want to make the right decisions, and maximise the available tax reliefs, so planning your business exit could take many years.

We’re also aware that selling your business is not necessarily the end of the journey. You may have ties to the buyer, ongoing profit or sales targets — or this could be your opportunity to start a new venture.

Whatever your plans, it is crucial to obtain professional advice.

To help with your decision-making process, here are a few questions to consider:

• Is one person looking to leave, or sell the whole business?
• Are you going to have continued involvement with the future owners?
• How do you expect your ‘exit’ to look?
• What is your understanding of the market, and how these transaction work?
• Do you have a specific timeline in mind?
• How would you like your family to benefit from these decisions?