If you started off as a one-man band, and now have more work than you can handle alone, it might be time to consider saying goodbye to being a sole trader and setting up your own company. While this might seem like a big move in the beginning, without giant leaps you will not be able to improve your income, reputation, and profits. Before you jump head first, you will need to learn what it takes to run a successful company, and managing people, premises, and your – now more complicated – accounts.
Bigger Operations Means More Responsibility
While you were only responsible for the financial future of yourself and your family when you were a sole trader, you will now be providing wages for employees and have to pay added bills, national insurance contributions, invest in training and development, as well as infrastructure. If working from your back bedroom suited you, this will not be the case when you have an office full of people. They will want facilities, such as parking, a kitchenette, and employee benefits that make their lives easier.
You Need to Learn People Skills
If you were working for yourself for a long time, you will need to revisit some of the human resources books to communicate your vision and mission with your employees better, and become the leader you always wanted to be. People skills are important for building positive employee and customer relationships. As your organization grows, you will need to deal with more business partners and contractors, too, so you must step up your game.
Choosing the Right Form of Incorporation Is Challenging
After being a sole trader, you might find it hard to choose the right incorporation form. A Limited company will make you more credible, but there are other forms of corporation you can choose, based on your business profile, your trading volume, and your industry. Different rules and regulations apply to various businesses, therefore, you might want to talk to an expert about why choose Your Company Formations so you can get personalized recommendations and choose the right business name, form, location, and taxation method.
Budgeting will Become More Complicated
As you will not only have to keep track of your income and expenses, but also your travel and employee costs, premises, and equipment, you will need to adapt a new accounting method, and probably employ an accountant. If your books are not in order when the tax man turns up, you will face a fine. Long term budgets will also be more complicated, and this means that you have to calculate your daily operational costs and minimum income to pay them, and schedule your future investments carefully.
Your Regular Expenses Will Increase
When you buy or rent your own business premises, you will have to calculate the cost of running your business carefully. You need to pay your contractors and your employees on time, or your reputation will damage. If you are confident that you can make enough money to pay the increased costs of running your business, you might end up with more profits than before, but the expansion is likely to cost you a couple of thousand the least. Affordability is the key. Complete a financial audit to make sure you can pay the cost of expansion.
Your Competition Will Notice You More
When you become the owner of a successful organization, you will have to face with more competition and companies in your industry will try to defend their market share. The more saturated the market is, the more attacks you will need to be prepared for. From price wars to negative reviews, trying to find out information about your pricing and your business structure, stealing your customers, there are several ways your competition will try to sabotage your growth. The good news is that if you are prepared for these actions, you can avoid serious problems.
You Will Enter the Big Boys’ League
You will also have to learn to play in the big league, and change your business attitude as well as your leadership style. You must appear more professional, and have a more responsible and serious mindset. You will be dealing with larger companies’ leaders, and turning up in your jeans or being late for a meeting might simply not cut it. You must understand that larger projects require more professionalism and a better attitude. If you don’t want to improve your communication and negotiation skills, you might as well carry on running your one-man band.
You Will Need a Long Term Strategy
If you are used to running your business on a day-to-day basis, this attitude will need to change, too. Creating a business plan and strategy for the next 12-60 months will help you see clearer about your goals and aspirations. If you have a detailed growth plan, you will succeed, otherwise you might end up shooting in the dark. People who are able to create a clear strategy for their business can stay focused on their long term goals and find it easier to achieve success.
Learning to Think Big
With a larger organization, your dreams should also grow. Instead of settling for small projects and playing safe, you must learn how to utilize your resources the best way. There is no point cutting your prices or taking on less work, just to play safe. You need to make sure that your organization delivers the most value for you and your customers, so you can continue to grow your company. The bigger your dreams are the more help you will need to achieve them. Don’t try to do it all alone, and get professional help.
Learning to Outsource
When you hire your first employees, you might think that you still need to teach them before they can do your job. The truth is that most successful leaders are masters in outsourcing. You should focus on creating a successful strategy, instead of micromanaging projects. Utilize your time and knowledge the best way. Don’t try to fix every light bulb or deliver the training yourself. Focus on activities that will take your business further in the future, and outsource the rest.
Decisions Will Become a Part of Your Life
If you found it hard to make decisions while working for yourself, welcome to the new challenge. You will face several challenging decisions on a daily basis, including that related to staff, new clients, products, and suppliers. If you don’t stay focused on your goals, you will decide on an impulse. Decision-making skills are important for every leader, and you must learn to select the best option before it is too late, and your competition jumps on the opportunity.
Managing Authority and Employee Relations Will Be Tricky
If you are not used to managing people, you could benefit from some training. While you want to maintain positive relationships, you don’t want to appear like a soft leader employees can walk all over. Balancing authority and employee relations can be challenging, even for experienced leaders. Be friendly and fair, but don’t be their friend. Create clear employee policies, so you can apply the same rules to everyone and cannot be accused of favoritism.
Managing a growing organization is a challenging task. You must consider the human resources, financial, and regulatory aspects of incorporation, and make sure you can deal with them with or without help. While all expanding companies face growing pains, with effective leadership skills and strategic planning you can overcome the difficulties easier.
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