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  • Linda Labidi

Setting up your own business: 10 questions before you start

Nearly one in four French people would like to start a business, take over a business, or go into business for themselves. Here are the 10 essential questions to ask yourself before taking the plunge.

Business failure has become a major problem, and there is a clear upward trend: in May 2023, there will be 4,865 business failures, compared with 3,423 in June 2022. That's an increase of almost 50% in one year. Despite this, the French remain optimistic and still want to do business! According to a survey conducted in February 2023 by OpinionWay for Go Entrepreneurs and Bpifrance, nearly one in four French people would like to "start a business, take over a business or become self-employed". Here are the 10 essential questions to ask yourself before taking the plunge.

1. What status should I choose for my business?

Beyond the terminology - Micro-entreprise, SAS, SARL - the choice of status must be an informed decision, adapted to the nature of your project. Are you planning a high-risk activity? Choose a status that limits your personal liability. Are you starting up on your own? A micro-business or sole proprietorship might be appropriate. Several partners? Perhaps an SAS or SARL. Think about your long-term vision, because changing status at a later date can be costly and complicated. In 2022, 40% of sole traders complained about administrative complexity.

2. How do I get my business off the ground effectively?

Every entrepreneur dreams of a great idea, but success depends on careful preparation. Start with a thorough market study to assess demand and identify your competitors. Then draw up a detailed business plan. Invest time in training and research, and don't hesitate to ask mentors or professional networks for feedback on your project. 70% of successful French start-ups had carried out solid market research, according to one study.

3. What support is available for business start-ups?

The government and the regions offer a wide range of assistance: tax credits, tax exemptions, technical support, etc. There is also specific support for women entrepreneurs, young people and innovative sectors. Keep up to date with the schemes available. Some may have very specific eligibility criteria. In 2022, the ACCRE scheme enabled more than 120,000 French entrepreneurs to benefit from exemption from charges.

4. What types of grants or funding are available for business start-ups?

In addition to traditional bank loans, consider participative financing, business angels, or subsidies designed to promote innovation, employment, or the ecological transition. Keobiz tip: Diversify your sources of funding and make sure you have a solid presentation of your project to convince investors. In France, crowdfunding is expected to raise more than €500 million by 2022. Regional subsidies, meanwhile, represent a budget of almost €200 million a year.

5. How do you manage cash flow and finances from the outset?

Cash flow is the sinews of war (65% of bankruptcies in France are due to poor cash flow management). Learn to anticipate your needs, set aside a fund for emergencies, and rigorously monitor your cash inflows and outflows. Use financial monitoring and forecasting tools, and check in regularly with your chartered accountant to avoid surprises.

6. How do you set up effective bookkeeping?

Accounting is the backbone of any business. According to a recent study, 32% of small businesses face major challenges due to accounting errors every year. Even if micro-entrepreneurs benefit from simplified bookkeeping that boils down to keeping a receipts book, it's important to get help to avoid administrative errors, which can cost an average of 7% of annual turnover in penalties and lost time. Having peace of mind in the event of an audit is invaluable. When it comes to your company's accounts, there are a number of issues to consider, including the choice of accounting software, the choice of accountant, the chart of accounts, and the method of filing your supporting documents.

7. How important is communication and marketing at launch?

According to the 6th edition of ACSEL's Growth & Digital barometer, French businesses are increasingly present on social platforms. 72% of those surveyed said they had a page on social networks. (+5 points compared with 2021). In a saturated market, standing out from the crowd is essential. More and more small businesses are getting support from community managers as soon as they launch their business, so they can quickly develop a network and start building customer loyalty. You can also run your own networks. To do this, remember to publish quality content regularly, opt for relevant hashtags, and interact with your users.

8. How can I anticipate and manage the potential risks associated with my business sector?

Every sector has its challenges. For example, 40% of companies do not survive major market instability. The main challenges remain market instability and competition. It is also essential to think about the environmental impact of your business beforehand. In recent years, 25% of companies in certain sectors have been fined because of their carbon footprint, with penalties of up to €500,000. Others have even had to close down because their carbon footprint was too high. Before taking the plunge, it's a good idea to draw up a list of all the potential risks so that you can identify them clearly and prepare for them. Then assess their likelihood and the potential scale of their impact, and think about what action to take.

9. How important is ongoing training and how can I keep up to date in my sector?

Rapidly changing markets require constant updating of skills. Ongoing training is a real asset if you want to stay at the cutting edge of developments and have more qualified and fulfilled employees. It also enhances a company's image. 92% of French people believe it is important to train, while 43% feel "poorly informed about vocational training". Since 1 January 2019, the skills development plan has been an annual document designed to enable employees to keep track of the training initiatives undertaken by their employer. This is an annual document that should not be overlooked, designed to identify training needs and budget for them.

10. How do you create a healthy, motivating corporate culture from the outset?

A positive corporate culture can boost employee productivity and commitment. According to a Robert Half study published in November 2022, 27% of respondents would refuse a job offer if the company's values were not in line with their own. The four main components of corporate culture are: the company's history, its vision, the values it wishes to uphold, and the actions that will be put in place. Involve your employees in creating this corporate culture and bring it to life on a daily basis.

Hugues Husson de Sampigny is a chartered accountant and has been Keobiz's Chairman of Regulatory Affairs since April 2021. He has a thorough understanding of the issues faced by entrepreneurs on the ground, having himself held the positions of CFO and then COO of Companeo, the European leader in bringing suppliers and professionals together.

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