There's a dilemma when you are starting a company. There are lots of boring essentials like company formation, VAT, Data Protection Act, employment law and, depending on which industry you are in, a host of other legislation. Yet complying with these doesn't help you to sell anything, build a customer base or most importantly turn a profit.
It's incredibly difficult to find the balance between being too gung ho about regulations (with risks starting at inconvenience and ending in prison), or over egging things, with a bigger risk of business failure. Hovering around are lots of professional advisers with fees to match - that's the accountants, lawyers and consultants. Unfortunately it's hard for them to be entirely impartial as their business is about charging fees.
Here are my top tips for getting this balance right.
- First you need to understand the issue. You need to know what laws may apply to you. Books and the web are the cheapest forms of education along with free seminars from Business Link or professional advisers offering free consultations in the hope of getting your business.
- Then make sure you stay legal with the minimum of work and elaboration. Remember your principle aim is to serve customers, not produce a gold encrusted employment or health and safety manual.
- Be appropriate. If you work in an industry that is potentially hazardous, then actually health and safety is the top priority. If you are selling cuddly toys over the internet, just make sure they don't contain dangerous substances or harmful parts.
- Until you are cash positive, don't worry about issues that can wait until tomorrow.
- Once you know that the business has a future and you can afford it, start employing the professionals to help.
When you're starting off, anything that isn't directly related to making sales or pushing the business forward is an irritant. But completely neglecting other issues can cause huge frustration when you are forced to comply; it can also substantially reduce the value of your business or may even cause its demise.
It's different if you are well capitalised and have had previous business success. But if this is your first start up, then these tips are well worth a thought.