4 Legal and Physcial Resources

Legal and physical aspects that will affect the start-up of my business venture

Legal Status
Legal status is when you start up your own business, that you become noticed by the community and your target market. You can do this by first stating what type of business you are opening. My business is a sole trader; this means I have all the responsibility and all financial aspects are kept private and only for my confidentiality.

Legal Liability
Since my business is a sole trader, then I will have unlimited liability and my assets can be used in a court of law in order to pay off debts. In order for me to control this, I must make sure that I do not make much mistakes when running my business and not go into too much debt for which I wont be able to afford to pay back.

Trading terms and conditions
Since my business is a barber shop, trading terms and conditions isn’t essential to an extent but however I must make sure that when customers ask for me to do a certain haircut, that they don’t change their mind halfway through the haircut, so in order for me to implement this idea, I will put up a notice in my shop floor, preferably on the shop window where customers can see it, or on my business card.

Trading standards
Trading standards protect consumers from unscrupulous business traders. For my barber shop, I should make sure the supplies that I buy are of good quality and I make sure I clean the trimmers after haircut for hygiene reasons and that goes for all equipment I have e.g. cutters, scissors etc.

Licences
Many businesses need licences in order to operate, so for my barber shop, I would need to make sure I have the licence and it’s visible for inspectors to see before I open my business.

Record keeping
Cash Book- A cash book is a record of all the cash going in and out of the business. In contains finances such as transactions, cheques, deposits and payments. For my business I can choose whether to keep a cash book or to keep one via electronically – Microsoft Excel.

Wages and Petty cash books
This is where the company keeps record of wages or salaries paid to the employees. For my barber shop it will be done electronically so it’s easier access for me and I can make quick adjustments.

Accident Book
This is where the company keeps a track of any accidents the employees have suffered while in the firm’s premises. It has to be kept for a minimum of three years. For my business, again I will be keeping the track electronically.

Stock Records
A record is kept of all types of raw materials purchased by the firm; Orders can be made promptly so the company don’t run out of stock. For my business, since I won’t be having as much stock to sell, I will still keep a record of them.

Contracts of Employment
This is where the duties of the employee are stated within two months of starting work. Points include:

· Names of employer and employee
· Job title and job description
· Date employed, place of work and address of employer
· Hours of work
· Holiday pay entitlement
· Sick pay arrangements
· Pension arrangements
· Notice periods

For my business, I will be providing the employee with a copy of the contract of employment for them to keep and also I will keep a copy of it myself.

Health and Safety
All business owners are responsible for the safety of their employees and also the well being of their customers. For my business, I will put up all health and safety notices inside my shop so everyone can see it and also fire extinguisher in case of a fire.

Planning Permission
If I wish to extend the size of my premises as in to expand, then I would need to seek permission of my local authority such as government or council because it will involve noise pollution it could disturb the local community.

Cost of premises
The sources of finance will be coming from my own capital since I am the sole owner, if I feel the need to invest more money, then I will be taking out a loan from the bank and my first intensions would be to pay it back.

My cost of premises would be roughly between £20,000-£30,000, most of this will likely come from a loan from the bank, in order for me to get this, I would have to present to the bank an outline of my business and what my intensions are and what will I be using the money for. This can be constructed in break even charts and mathematical statistics.

Equipment
The equipment I would need to start my business is basic resources a barber shop requires they are:

· Clippers
· Razors
· Chairs
· Scissors
· Separate waxing room with own equipment
· Seating for customers
· Counter
· Lighting
· Heating

I will be looking to spend between £1,000-£2,000 on equipment because I feel it will cover all my basic needs and wants to open my business then as I grow into it, I can start thinking about expansion etc.

Suppliers
I will be doing my research on the Internet for appropriate suppliers for my raw materials or products which offer the best range in prices. This will be mainly for the most important equipment needed for my shop such as Clippers and Razors etc

Employing Staff
When employing staff, I should firstly consider paying them the right current minimum wage selection. In addition, I will need to make national insurance payments on behalf of my staff just to make sure everything is secure and copasetic.

Cash flow
I will be using a cash flow forecast when running my business basically to analyse the flow of my money i.e. money going in and out of the business. This will help me identify how much I am spending and on what areas and which areas am I spending too much and areas in which I have to cut down on spending.

I will also have to construct a profit and loss account. This is a document which shows the level of profit my business is making or the how much loss I am making. This is a good way for me as the owner to identify where is I making the profits and where am I making the loss so I can take a line of action in order to fix this.

Break Even
A break even chart is helpful for when starting a new business venture. It will indicate at early stages of my business how many sales I need to make in order to stay afloat (break even). The formula for how to find out the breakeven point is:

Sales Revenue
A breakdown of Break Even: Fixed costs are costs that do not change according to output such as, Rent, Cost of Premises. Variable costs are costs that do change according to output such as raw materials, Bills etc.

Sources of Finance
Own Savings – This is how I intend on starting my own business with most of the money or not all will come from my own savings which is an easy option for me as it will not cost me anything. Also this increases the chances of me getting a loan from the bank as well on top however it will not be as more as i have already put up for my business.

However if I feel that I am struggling for the finances, I can apply for the Prince’s Trust fund which is aimed at 14-30 year old wishing to open up their own business. They offer practical help in financial areas training and mentoring.

The trust offers new entrepreneurs:

· Low interest loans up to £5,000
· Grants up to £1,500
· Grant of £250 for test marketing
· Marketing supports and specialist advice.
· Regular business advice from a volunteer business mentors.