Q: I'm a plumber currently working for a building firm, but wondering about starting up on my own. What are the first steps to take?
Aug 17 2005
Answered by: Philip Wilkinson Ask a question
Dull as it may seem, the very first step you should take is to draw up a simple business plan and draft cash flow.
Cash flow might seem a complicated concept, but it is really quite straightforward. Don't be put off by the jargon. All it does is estimate your cash payments, both the amounts and the timing, and your cash receipts, amount and timing. Draw up a schedule headed up with each of the twelve months ahead and slot in the payments and receipts you estimate for each month. This will show you when you are short of cash and this period is most likely to be in the first few months until you have built a regular clientele.
Some of the banks offer computer programs which help you to computerise the process and make it relatively simple. This means that you need a basic computer, but nowadays this makes sense for most businesses, no matter how small. There will be programs to help you sort out your cash flow, your accounts for your self-assessment tax return and VAT return (if you are registering).
If you need face-to-face guidance drawing up a cash flow, contact your local Business Link or regional variation (visit www.businesslink.org or call 0845-6009006 for details). One of their advisers will be able to help you or may know of a suitable training course.
To develop your business plan, you will need to be able to answer these questions: where will you be based, who are your likely customers, how will you attract new customers, what equipment do you need to buy, how will your customers pay. You will also need to decide whether you will start as a company or be self-employed and what the name of your business will be.
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