Analyse the guidance available to a potential business to ensure a successful start up and nancial support

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I am working for the Hounslow Chamber of Commerce as a trainee manager. The Hounslow Chamber of Commerce provides advice to existing businesses and to entrepreneurs seeking to set up their own businesses. In this guide, I will analyse the guidance, advice and support available and what action a potential business should take to ensure successful start-up and financial support. I will analyse why the actions are necessary, what they facilitate and what problems might arise if the stages were ignored.

The first important stage when setting up a business, is to decide what type of ownership you want to be. Do you want to be a sole trader, partnership, private or public limited company or a franchise? It’s also important for the owner to understand that each separate ownership has different disadvantages; these arise when the owner is unaware of the disadvantages beforehand as they didn’t do prior research. Problems can arise for sole traders and partnerships when they get into financial debt, for example being unable to pay their accounts. In a result they have unlimited liability and the owners personal assets will be sold to fund the debt. In addition, obtaining finance to start up a sole trader or partnership may be difficult. The reason for this is because you are a new business and do not have a history of success. Banks are reluctant to give finance to new businesses as it’s a risk. Furthermore, if a partnership doesn’t have a Deed of Partnership it could lead to conflict. The conflict may be in a result of sharing of profits, making decisions or if a partner wants to leave or a new partner wants to join. Moreover, controlling interest will become a problem to a public limited company. This is because they are listed on the London stock exchange and an investor may take over the business which means they get to make all the decisions. Franchises also can occur problems. For instance, the franchisor is always in control of the franchisee and will have to share their profits with the franchisor. Also, the franchisor will supply all the raw materials and will charge you for it and you are not allowed to buy elsewhere; this can become a problem as their prices are always higher than somewhere else.
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The next stage is writing up a business plan. Business plans are very useful and have many benefits. For instance, a business plan can show strengths and weaknesses of the business idea and highlight financial risks involved. Therefore, if there are any issues the business can then find solutions for this before they become an issue. Furthermore, a business plan can help obtain finance. When the business is asking for a loan, the business manager will ask for the business plan, if they don’t have one they won’t get any finance. If there is no business plan many ...

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