COVID-19 really did a number on the economy. For surviving businesses, going out of business is still a very real possibility. Even companies that aren’t currently teetering on the edge financially are experiencing what accountants would call “financial distress”. Economic uncertainty was already in place due to Brexit, and when the pandemic hit, the lockdowns and additional restrictions amplified the economic hardships of an already shaky economic backdrop. Whole industries were rendered unsustainable seemingly overnight, with businesses either closed down outright or struggled on for a while before finally buckling under the pressure.
This crisis has done a lot of damage to business and has changed the economic landscape irrevocably. However, when all is said and done, it is a crisis – and experience teaches us that troubled times are the best times for entrepreneurial effort startups.
Those enterprising few that are willing to try to take advantage of a turbulent situation should consider the following. If you are going to embark on the journey of starting your own business near the end of 2020, you will need to do a couple of things first.
Get Your Finances Straight
Keeping your books straight is not a part of the production or distribution process and thus often gets overlooked by startups who want to jump into the thick of things immediately. However, taking care of a business’ financial matters is integral to not only your company’s short- and long-term success but its very survival. Doing so from the get-go is no easy feat, as there are a myriad of intricacies and details that you will need to familiarize yourself with and master in order to succeed as a startup.
Learning all about managing your business’ books is a serious project in and of itself, and one that would require a significant investment of time and effort on your part. Fortunately, the upcoming holidays and the associated break will give you plenty of time to do just that. Furthermore, you don’t have to go at it alone – there are excellent accountants in London that could help you on your journey.
Take Care of the Legal Matters
Starting a business is never as simple as just setting up shop. It usually involves filing a ton of paperwork and applying for a business license. A company also often needs to be registered with a state tax agency and have a bunch of specific permits to function.
Many types of businesses also require extensive licensing to even start performing any sort of activity. As an aspiring entrepreneur, you will want to check your country’s occupational regulation agency for any additional legal and accounting details you might need to iron out as you prepare to start up.
Additionally, you will need to carefully consider how you want to structure your business. Limited liability companies (LLC) offer a level of protection to their owners that may come in handy if your efforts end up not bearing fruit. However, setting an LLC up requires you to file some serious paperwork and involves continuously interacting with quite a few other organizations with byzantine bureaucratic structures. As a result, doing so can drag on for quite a while – especially in the current health crisis.
This is why entrepreneurs stand to benefit from filing paperwork before the holidays. Many of us often have time on our hands, so you might as well use that downtime to your long-term benefit.
Take Advantage Of Affordable Interest Rates
Getting a loan to launch a new business is far from unusual. Doing so allows the startup to kick off their operations with a bit more cash, which translates to gaining momentum and having some flexibility to invest in whatever the business may need at first.
Interest rates in the UK have been rather low for more than a decade now, and it seems like their recovery will be slow and arduous. The financial instability brought on by Brexit kept them down for a long time. Just when interest rates looked like they may pick up around the end of 2019, the pandemic hit and knocked them right back down again. They’ve been slumping ever since, thanks to both market forces and deliberate policy; as an aspiring entrepreneur, you can take advantage of that.
COVID-19 Relief Programs
Many financial relief initiatives have been established as a response to the COVID-19 crisis to help out both private citizens and businesses – which can be very helpful to a startup as well. You will need to do your due diligence and determine which one(s) will be useful for you, how to qualify for and access them, and how your future plans will benefit through taking advantage of these economic relief programs. The potential benefit gained through the assistance of a professional accountant and/or attorney cannot be understated.
Look for Other Opportunities
The current pandemic-driven crisis has hardly done society and the economy any favors. Still, the world’s current state can be advantageous if you’re looking to acquire an existing business. Entrepreneurs who wish to sell their businesses late in the year may be in a hurry to close their books before the beginning of the upcoming one. If you can act decisively and close the deal, the seller may be willing to negotiate a price decrease for the sake of expediency.
Additionally, many businesses have gone belly up – but that isn’t necessarily bad for you as a startup. In fact, you can use this to your advantage – all the office and store space the failed companies occupied is now open. Their assets are being liquidated – which means that you may be able to acquire a lot of equipment at a discount. Their workers are now also looking for employment.
Currently, there are plenty of opportunities for startups – you just need to look for them.