By getting things right at the beginning, a Start Up can facilitate growth at a faster pace and be ready for the bigger challenges and hurdles coming down the line.
While many Start Ups are very personal to the individual involved, it is important to separate the matter from one’s own personal finances. Setting up a Limited Company from the beginning will allow that separation while at the same time alienating the legal risk and liability from the individual.
By keeping the share capital of the Limited Company simple at the outset, it allows flexibility to meet and implement investor and shareholder requests as the business develops. Being too complicated too early can hinder or deter investment and expansion.
It is important to manage people’s relationships and expectations from the outset. A Shareholder’s Agreement at the outset will mean that everyone will know where they stand. The Shareholder’s Agreement will also help tick regulatory boxes and define the relationship between the Company (with its own legal identity) and the shareholders.
Money and Compliance
Start out with knowledge of rules and regulations particularly in respect of accounts, law and your particular industry. Develop your business with the correct codes of practice from the very beginning and they will become a natural part of your firm. Allow the business to develop within the core principles and governance of your industry. Sometimes compliance and regulatory information can feel cumbersome. However remember that information can always be recycled for dealing with due diligence for funders, investors, banks etc
However getting bogged down in regulatory matters may mean less time to develop and move the business forward. Don’t be afraid to outsource so you can concentrate on using your time to maximise productivity in the long term.
People and Contacts
Many people really underestimate the value of contacts in the early days of their business. Allocating time and spending time meeting people, attending industry events and conferences is rarely a waste of time. There will always be something new to learn from someone. Make connections, engage and re-engage. You never know when a contact will come in useful in the future.
Don’t’ ever underestimate the importance of your IP. Many people underestimate its value and don’t realise how important it is until they are at risk of losing it. In the 21st Century every person is a brand and every idea is a brand so maintaining your Brand is essential. Ensure you have evidence of ownership or entitlement as investors want to see registered IP in place to protect their investment. The value of IP is growing as it is now considered a mortgagable asset for security.
Maria O’Sullivan 29 March 2017