Sara Dennis, Director at Bevan Buckland LLP
One of the most interesting trends to emerge from the business landscape of the pandemic is the surge in business start-ups, but Wales’ largest independent accountancy firm, Swansea headquartered Bevan Buckland LLP, is urging entrepreneurs not to fall into common pitfalls that scupper fledgling SMEs before they even get off the ground.
The Centre for Entrepreneurs Analysis showed that business start-ups in the first nine months of 2020 were 9.5 percent higher than during the same period in 2019, new data reveals, with a record-breaking number of these setting up in June 2020.
Sara Dennis, Director at Bevan Buckland LLP says the firm is seeing a steady flow of start-ups enter the business landscape in Swansea and in other areas of South West Wales they serve.
“Whilst the pandemic has clearly rocked the business landscape and the economy, we are continuing to see entrepreneurs respond to furlough or perhaps to redundancy to set up businesses that they have typically always been interested in starting but haven’t had the time to do so. Of course, many of the world’s most successful brands were set up during times of recession – FedEx, Microsoft and Burger King being some notable examples. Newport-based Storage Giant is another – perhaps not a household name but now the largest private self-storage firm in Wales.
“However, this is still a tricky landscape for a new business to negotiate, while the aftershocks of Covid are with us – and many are predicting recession ahead. It is vital that new businesses focus on getting the basics right if they want their business to flourish. A key consideration is to examine whether your business idea is likely to flourish in the very particular post-Covid landscape. Detailed market research can help you with his, but businesses that are facing extra demands include food delivery, online tutoring, online sales, the sale of outdoor activity goods like bicycles and hiking gear. Coronavirus has caused a very specific set of problems that start-ups are clamouring to cure.
“Getting your business structure right from the outset is important and it can save stress later on. If you opt to become a sole trader, you will run your business as an individual and be entitled to keep all the profits as well as carry the can for any losses. You must pay income tax and national insurance contributions (NICs) on any profits by completing an annual self-assessment tax return. General partnerships and limited liability partnerships are other options that a professional financial advisor can talk you through.
Sara Dennis adds: “Writing a good business plan is essential, particularly if you need to convince investors or banks to back you. It will also help you plan for every eventuality. Interest rates are low, and this is likely to remain for the near future, post-Covid, it is likely that new funding streams will open up for start-ups as the pandemic continues to lift and typically, savvy investors use a downturn to get more for their money by investing in cash-strapped start-ups.
“How you manage the first 100 days of your start-up will go a long way to determine how successful a venture it ultimately is. SMEs without a medium-term goal tend to struggle to survive. And you would be surprised how many new business owners don’t keep careful track of the exact amounts of money flowing in and out of their business, or don’t carry out cashflow forecasts. This can be fatal. Digital records, sales forecasts and profit/loss forecasts are invaluable to helping you know how your business is actually faring in real time.
“Late payments to small business can scupper them, too. You can keep a tight rein on late payments by being upfront about your payment terms and conditions from the start. Even offering a discount for fast or early payments can help. Being savvy about whether you’re taking advantage of tax reliefs or allowances can give extra support to fledgling firms, too. There is a lot of support out there, including from us at Bevan Buckland LLP – it is important to take advantage of it to give your firm the best chance of success.”
The practice has offices throughout South West Wales, and it is the largest independent accountancy firm in Wales providing accountancy services, tax compliance and advisory services plus a range of strategic advice for small to medium-sized businesses. Headquartered in Swansea, the firm has offices in Carmarthen, Pembroke, Haverfordwest and St David’s.
For more information, please contact us on 01792 410100 alternatively email mail@bevanbuckland.co.uk