Upon starting-up a company, the directors have to consider the company’s business and its trading relationship with customers and suppliers.
In particular the directors should consider the following:
- The company’s trading address and the business lease it enters into. Business leases can be quite onerous, tie the company in for a long time, prove very expensive and not be flexible enough to cope with any future changes to the company’s business.
- Its employees and the employment contracts it enters into – are they temporary contracts (more expensive but without employment rights), part-time or full-time permanent positions (less expensive but they come with sickness, holiday, redundancy and notice rights if you wish to reduce your workforce)?
- What are the terms and conditions of business with suppliers of goods and services e.g. utilities, stock, office materials etc. How and at what stage is a contract formed and the legal concerns the company has to be aware of.
- Similar considerations should exist in respect of customers.
The business itself, its employees, funding and property issues summarise the main problems faced by all companies and mismanagement of these aspects leads to a majority of company failures.
These problems can be avoided by proper management and planning, as well as dedicating some resources to less “pressing” issues such as information management, accounts and tax affairs.
