Start-up businesses can fail for a large number of reasons. It goes without saying that the fewer mistakes made the less likely failure will occur. People provide many tips on how to start businesses successfully but perhaps it would be easier to actually look at what not to do. By overcoming the below common mistakes you will give yourself every possibility to launch a successful business.

1) Capital: Lack of funds can be a major obstacle in starting your own business. It is hugely important to launch your business with the right amount of money. Starting with too little cash is not advised and can be a big mistake. If seeking investment be realistic in terms of the amount required, the money should be enough to at least take you to the next step of the business plan, whatever that may be. Typically this may be simply building a prototype. Money must be carefully managed in its early stages, and start-up companies must look for the most attractive deals from suppliers. It is now cheaper than ever to start a business with many online companies expanding from a simple website. One early expense that can be avoided is the immediate hiring of staff. It is not suggested to hire staff in abundance before the business has really taken off. If you do require help perhaps look to friends, or family, however if hiring someone is unavoidable look into paying them in equity as opposed to salary. Believe it or not it is also possible to raise too much money. Changing the direction of a business may be needed in the early stages and if there has been a significant financial commitment, changing the business direction may be very difficult. Looking for huge investments is also time consuming and may delay the launch of the product or service.

2) Timing of the launch: Getting the timing of the launch of the business wrong is another common mistake for start-up businesses. Launching too slowly is possibly more damaging than launching too quickly. If the launch is delayed you run the risk of another start-up business introducing a similar or identical business concept. Some common delays for not launching on time include working too slowly, not truly understanding your target audience, working on too many different projects, and the fear of actually having to deal with the users of the product or service. On the other hand launching too early may ruin the reputation and may discourage people to ever use the product or service again. Getting the timing right is crucial to early success.

3) Relying heavily on one supplier: This is particularly important during times of recession. With the huge number of businesses closing down, relying on one supplier only is a silly mistake for a start-up business. Let’s assume a company is starting up and uses one supplier to source their raw materials. They may have favourable terms of trade with this supplier and the supplier may understand what exactly the company requires, however if this company goes sunder so does the start – up in question. It is recommended to have a variety of suppliers to lessen the risk involved. For business to business start-ups it is advised to have a number of different customers. If you only have one major customer and that business fails you too will be in serious trouble. Starting a business is in itself a massive risk so any opportunity to minimise risk is advised for small businesses.

4) Not identifying a specific user: Having a great innovative product or service is not enough. You cannot adopt the attitude of “people will like this”. You must ask yourself who will like this and who will purchase this. A clear target audience must be identified. Start-ups that are unsure about their target audience are far more likely to fail. All future marketing efforts should be aimed at your specific users. These people need to be understood in quite some detail.

5) Not being fully committed: Many entrepreneurs looking to start new businesses have other business interests and are often employed elsewhere. Some talented entrepreneurs have the ability to manage a number of their businesses simultaneously however for most people this proves to be a very difficult task. Statistics show that many founders of failed start-ups have other jobs and have not devoted their full attention to the new business venture. If you want your business to be really successful other work commitments must be questioned. If you are happy to just try your hand at starting a business and are not overly concerned about whether or not it fails well then I would recommend hanging onto your day job.

Limited companies exist in their own right, distinct from the shareholders who own them. This means their finances are clearly separated from the personal finances of their owners.

Shareholders may be individuals or other companies. They are not responsible for the company’s debts (unless they have personally guaranteed a bank loan, for example). However, they may lose the money they have invested in the company if it fails.

Management and raising finance
A director or board of directors make the management decisions.
Finance comes from shareholders, borrowing and retained profits.
Public limited companies can raise money by selling shares on the stock market, but private limited companies cannot.

Records and accounts
Accounts are filed with the CRO.
The directors and secretary are responsible for notifying the CRO of changes in the structure and management of the business.

Profits are usually distributed to shareholders in the form of dividends.

Liability -Shareholders are not personally responsible for the company’s debts, but directors may be asked to guarantee loans to the company.

Choosing a name for your company
Choosing a name for your business is a creative and enjoyable process. It is also one that you need to get right. Customers will deduce a lot from your business name and first impressions count.

While it may be tempting to try to stamp your individual personality on your business name, there are many other issues to consider. Being objective and choosing a name which reflects your business strategy can be more valuable, especially as your business develops.

Creating the right impression
When you are generating ideas about a business name, you initially may want to focus on personal preference. However, an objective approach will enable you to consider the customer first.

Remember that your business name will be the cornerstone of your brand. It should work well wherever you use it – on the phone, in your logo, signage, stationery, advertisements, website, uniforms and any other media you plan to use to reach the market. See our guide on branding: the basics.

Points to help you decide on a name for your business
Do you want the name to reflect what your business does – framing, moving, cleaning, building? Or would something more abstract be suitable?
Would it be a good idea to include your own name?
Do you want a traditional-sounding name, conveying durability and old-fashioned values, or a modern name, suggesting a fresh, innovative approach?

Think about the future – avoid words or phrases that are likely to date quickly.
If you’re likely to be trading overseas, check that the name doesn’t mean anything inappropriate in the relevant languages, and that it can be easily read and pronounced.
Think about callers and customers – avoid very long names, strange wordings and unusual spelling.

Company names – the rules
To make sure your company name is acceptable, work through this list before you send your application to CRO. Ensure that:
your company name ends with limited, or Irish equivalents – this must not be used anywhere other than at the end of the name
the name isn’t offensive
the name isn’t the same as – or very similar to – one already in the register
the name doesn’t include any sensitive words or expressions – unless you have obtained permission to use them

Most successful entrepreneurs will tell you that conducting a feasibility study is vital in that very first stage of developing a business. But if we’re honest, how many of us actually understand what a feasibility test really is? Not all entrepreneurs are experts on research and market analysis, so here is a quick guide to the importance of verifying the validity of your start-up.

A Business Feasibility Study is an integral part of the start-up stages of a new company. Without conducting a feasibility study you could be walking blind into a market with a product or concept that is just not commercially viable. According to Women in Business, Feasibility studies contain comprehensive, detailed information about your business structure, your products and services, the market, logistics of how you will actually deliver a product or service, the resources you need to make the business run efficiently, as well as other information about the business.

The reality of entrepreneurship is that some ideas just won’t work no matter how passionate you may be about it. Starting up a business means risk, and it is not advisable to walk into that risk without assessing the viability of your idea first. A feasibility study looks at the viability of a business, and really focuses in on any issues that present themselves. Can the issues be dealt with? Is there a place for this product in the market? Can I make my product/service stand out from the crowd? Is it logistically possible to build and maintain? These are all areas that need to be addressed, ideally before the start of product development, or in the deliberation stage.

To break it down, a feasibility study consists of different components, all vital in the success of new business. These generally are:
• Market feasibility which looks at the industry and consumer base
• Technical feasibility which predictably looks at the technical delivery etc
• Financial feasibility looks at return on investment, capital needed to begin, source of income.
• And Organizational feasibility which encompasses the entire structure of the business from corporate to legal to staff. This can also cover the skills present in the entrepreneur or founders as the grounding of the whole start-up concept.

Remember, the aim of a feasibility study is to find all the issues early on so they can be dealt with, so don’t shy away from acknowledging what your start-up lacks. This honesty early on could be the difference in the probability of success. Look at a feasibility study as a tool, not to be confused with a business plan, which is formulated only after positive feasibility results. The business plan will be drawn up based on the most positive scenario laid out by a feasibility study, and carry on into financial projections and more details on the business.

Enterprise Ireland offer feasibility research grants to those High Potential Start-Ups aimed at exporting. For this particular grant your start-up must be:
• Based on an innovative technology or service offering;
• Likely to achieve significant growth in three to four years (sales of €1m per annum and employment of 10 or more);
• Export orientated;
• Led by an experienced team, with a mixture of technical and commercial competencies.

A feasibility study can be as in-depth or as simple as you want it; but be mindful of the issues that can arise if this step is ignored. As well as finding potential tricky areas, a feasibility study will help you evaluate the most cost effective way to move forward, and if you’re thinking of looking for funding for you business, a feasibility study is an absolute must for credibility.

Making the transition from full-time employee to full-time entrepreneur is no mean feat. Keeping on top of a full-time job, while starting up a new business, is exhausting work. For those of you who find yourself in this situation, pour yourself a glass of soya milk, pull up a yoga mat and consider these ancient (although somewhat altered) proverbs to help you restore your inner harmony / sanity.

A penny saved…is a penny you can invest into your new business. One of the big advantages to working while starting up a business is the ongoing inflow of income, some of which you can pump directly into your start-up or save as a cushion for your first while as a full-time entrepreneur. It can take time to get a business up and going – this is quality earning and saving time for someone setting out on a new business venture.

All work and no play…makes Jack a pain to live with and unproductive at both his job and start-up company. Granted, it will seem there are not enough hours in the day to get done all you want to get done as you juggle the new company, work-life, home-life and social-life. ‘Social-life’ you say? Remember when you had one? It is important to take some leisure time out for yourself and get back to interacting with other human beings, before you forget. If not, you will drive yourself, as well as everyone else, up the wall. It’s also good for business to maintain your contacts. Taking the plunge from full-time employee to full-time entrepreneur can be a lonely time when you don’t have your support network in place. Get out and meet people – you never know how they may be able to help you and your business at a later date. If you feel the guilt, it may make you feel better to consider it a work meeting. If you work meeting happens to be over a few pints…so be it!

Don’t bite the hand…that pays you. It makes sense to maintain a good relationship with your employer, particularly if they could be of use to you at a later date. You will be the best judge of whether or not you tell your employer of your plan for your new business. Depending on your business idea, your employer could be a potential competitor, partner or even customer. Just make sure that when you leave, it’s on a good note and that they don’t see after a month of you leaving that the phone bill has reduced drastically. It’s best to use your own time and your own resources to get your business up and running, but if you have an agreement with your employer, get it in writing! Furthermore, make sure there are no implications as a result of employment agreements which restrict you from working in a certain field once your employment has ceased. Matters regarding IP and trade secrets can be a little tricky so check this out.

Look before you leap. Another advantage of working full-time while starting up a business is that you can test your idea in the planning stages without jumping in with both feet. Get feedback from potential customers on your business before you pack in the day job. Better yet, secure agreements and orders, or measure to what extent you have been able to meet a certain goals that you have set for yourself. Ask yourself some hard questions and get others to ask you hard questions. This is all about minimizing risk and making sure you’re going to be happy as a full-time business owner as opposed to full-time employee.

Nothing ventured, nothing gained. When you do take the leap from full-time employee to full-time entrepreneur, you will no doubt find the new responsibilities, risk and independence daunting. But this, mixed with the excitement of running your own business will make you all the more committed to it. And the more committed you are, the evermore likely the success of your new start-up company.

Why use a Company Formation Agent?

Most people setting up a limited company in Ireland will use a company formation agent to register the company on their behalf instead of going directly to the Companies Registration Office (CRO). This is the easiest and ultimately the most cost-effective way to register a company in Ireland.

Generally a company formation agent will set up your company either directly or indirectly. Some entrepreneurs will go direct to company formation agent that may have been recommended to them, or they found on an internet search, whilst some will go through their professional advisor (Accountant or Solicitor). Most professional advisors will then outsource this to a company formation agent (unless they have their own dedicated Company Formation/Company Secretarial Department)

If you are unsure of the type of company you want, it is a good idea to go to an Accountant or Tax Advisor in advance to seek their professional opinion on what type of company is best for you.
Whichever route you choose to incorporate your limited company, you will first need to decide on:

 The company name
 The precise activities of the company
 Who the directors will be
 Who will own shares in the company
 Who will be the company secretary
 Where the registered office will be

The benefits of using a Company Formation Agent can be summarised as follows:

 As they are generally a member of the CRODisk scheme, Company Formation Agents are guaranteed to have a company registered within 5 working days (usually 2-3 working days) Submitting the documents yourself can take up to 6 weeks (longer if there is mistakes or omissions on forms)
 The availability of your company name is checked by a professional, who should be familiar with the multiple rules the CRO have governing the availability of names.
 All fees are generally included in the fee quoted: CRO filing fee of €100, Solicitor/Commissioner for Oaths fees, VAT, Drafting and printing of Memorandum & Articles of Association.
 Company Seal is usually included (You should check this with the formation agent prior to ordering company) This can cost up to €50 as a ‘stand-alone item’
 The Combined Statutory Register and minute book is usually included. (Again, you should check this with the formation agent prior to ordering company)
 No need to go to a Commissioner for Oaths or a Solicitor to get the A1 form witnessed, as the Company Formation Agent should arrange to get this done as part of the service
 Share Certificates and First Company Board Minutes are usually included with incorporation documents
 Mistakes on application are very rare, since the Company Formation Agent deals with applications on a daily basis
 Full ‘after sales’ service should be included

Form-filling websites

We strongly advise against using one of the various ‘form filling’ websites, who claim to be able to register your company in the ‘fastest’ and ‘cheapest’ way. Unfortunately this is not the case, and they are not disclosing the full facts and the steps than you then need to take to register your company. They disadvantages of such sites are as follows:

 The availability of your company name is not checked by a professional. Unfortunately due to the many rules the CRO have on names you need a professional to check the name. A computer system can’t do this.
 You will have to go to a Commissioner for Oaths or a Solicitor to get the A1 form witnessed (Will cost €20-50)
 You will have to search the index of NACE codes (Government business classification codes) and select the one appropriate for your business.
 On top of the fee paid to the website, you will have to pay a €100 filing fee to the Companies Registration Office
 Once you print the documents, you have to make your application yourself under the ‘old scheme’ which takes 4-6 weeks.
 As the application is not managed from start to finish by a professional, errors on the application may occur, which can set you back up to 2 weeks each time documents need to be returned to you by post.
 You will have to pay €50+ for a company seal
 Share Certificates look unprofessional printed on normal paper, and don’t include a notary seal
 No ‘after sales’ service of note
 Some of these websites are based in other countries with different time zones (One of them is in New Zealand for example)

To do it yourself

Some entrepreneurs are determined to do it themselves, and if you have plenty of time on your hands and aren’t in a particular hurry to register a company, this may be the option for you. The steps are as follows:

 You will need to go to a law stationer to get a Memorandum & Articles of Association. You will have to draft part of this yourself, based on you type of business.
 You will have to search the index of NACE codes (Government business classification codes) and select the one appropriate for your business.
 You will have to complete and sign the CRO form A1
 You will have to go to a Commissioner for Oaths or a Solicitor to get the A1 form witnessed (Will cost €20-50)
 You will have to pay €100 filing fee to the CRO, and make the application under the ‘old scheme’ which takes 4-6 weeks.
 You will have to pay €50+ for a company seal
 You will have to pay €30+ for a Combined Statutory Register and minute book, which will need to written up by you.
 You will have to draft Share Certificates and First Company Board Minutes for your company
 You should make yourself aware of and read most of the applicable CRO Guidance Booklets to ensure you are up to date with your obligations

It’s important to note that if there is any mistake whatsoever with the forms and documentation, The CRO will post the documents back to you and ask you to amend. This can set back the application by two weeks for each time it is returned.

Once your company is incorporated, you can open a company bank account with the Certificate of Incorporation and Memorandum & Articles of Association. You are also required to register for taxes with your local Revenue office using the form TR2. It can take a number of weeks for the company to be registered for taxes, so the form should be completed and submitted to your local tax office as soon as the company is formed.

Information provided by Company Bureau www.companyformations.ie

Two of the most frequently asked questions for people looking at a startup scenario are:

1) How do I setup a company, and
2) What type of company should I set up

How do I set up a company?

The Companies Registration Office (CRO www.cro.ie) is the government body responsible for registering all Irish businesses. The offices are on Parnell square in Dublin opposite the entrance to the garden of rememberance. The staff are generally quite helpful and will be able to point you to any forms that you will require. The CRO have a very good website and most things can be now done through their online filing system.

An easier alternative is to use the services of one of the many formation companies that will register the company on your behalf. They will provide you with a company seal (required for many legal docuements such as leases etc.), articles and memorandum of association etc.

Note: Do not be tempted to rush through this stage in your enthusiasm to get started!! The name of the company, list of Directors and Shareholding structure of the comapny, naming of Chairperson, secretary etc are extremely big decisions and should not be taken lightly. For example if down the road you fall out with your partners these details will be deciding factors in who has the upper hand legally!

A formation company will charge about €300 to register the company on your behalf. I have used www.formations.ie and found them to be very professional.

What type of company should I set up?

For most people the choice is either Sole Trader Or Limited liability company. Your accountant should advise you on the best structure for you. Generally speaking sole trader suits an individual running a business primarily on their own i.e A window Cleaning service, Painter etc. It can be a good idea to start the company as a sole trader and then move on to Limited liability if the business grows and more people become involved. The paperwork requirements for a sole trader are significantly less than for limited liability companies.

The idea behind a limited liability company is that an entity (the company) is seperate from the directors and shareholders. For example if a company does not pay its bills the company is sued not the directors. In reality, particularily in the current climate, most suppliers will look for personal guarantees from directors of the company before they will supply. This negates the protection of the limited liability. If a number of people are involved and if the company turnover is likely to be significant than forming a Limited company is recommended. It is important to be aware however that the filing and returns required by the CRO for limited companies are taken very seriously. If you are late with annual returns, significant fines will build up, also companies are entitled to an audit exemption for the first few years. If you do not file your returns on time you will lose this exemption. Furthermore shutting down a limited company is quite difficult and costly (you need to put an advertisement in the paper etc!!). Many people ignore the boring responsibilities of setting up a company in their initial enthusiasm, unless you are aware of your obligations you will find yourself and fellow directors spending lots of money on accounting audits and fines. If you put your head in the sand and ignore your CRO obligations , the company may be handed over to the Office of Corporate affairs who have the power to prosecute companies who breach the regulations. Don’t say I didn’t warn you !!!