Recent academic research has shown that the vast majority of SME businesses in the United Kingdom fail to keep up to date with the changing legal requirements of their sector. While there is no doubt that the business law field is both huge and intimidating, there is now no excuse for being ignorant of the requirements. More and more companies are now accused of 'breaches of duty', a phrase no SME owner should ever want to hear.
When graduating from a micro-business to a small to medium sized enterprise, there are several key sectors of knowledge you must aim to pick up on quickly. These include the basics of business law, tort and negligence law, business officials' requirements, your new contractual requirements for suppliers and many more. Unfortunately, this is only the start, but a sound knowledge of the basics involved will immediately put you above the majority of SME owners today. If your business has eyes for Europe you will need to study a separate, but no less long-winded, set of guides and policies that you and your trading partners will need to adhere to.
However there is light on the horizon, thanks in no small part to the rapid growth of technology and central governments lacklustre approach to regulating it. Technology can now be used to overcome certain 'red tape' bureaucracy requirements and if used prudently the results can translate into less money wasted. In March 2005 the cost of government regulations on businesses exceeded £30 billion.
To be fully aware of the new requirements (both financial and legal) that an SME has, one must consider a number of areas; VAT returns, upkeep of statutory records, PAYE system regulations, self-assessment, working hours regulations, data protection acts, privacy rules and the all important 'health and safety' to avoid future negligence claims! While this may seem like a headache, many SME owners are making the move to a paperless office to help deal with the time spent on all these regulations.
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Business experts recommend a streamlined approach; improve your communication while creating a system of your form and book keeping. The government allows for much of the paperwork to be completed and submitted online, a boon for the SME who has to monitor several departments or dozens of employees.
If your annual turnover is in excess of £58 000 then you must register for VAT. Knowing what can and cannot be 'claimed back' on your VAT is crucial and many SME owners opt to hire the services of an expert to do exactly that on their behalf. There are some straightforward solutions available such as outsourcing which can bring otherwise multifaceted VAT complication under one umbrella return.
Another important consideration is business insurance. Protecting your staff is protecting yourself, and this is never more vital than with a new SME. Become fully covered - do you own your workplace? How secure is the area? How reliant on your office equipment are you? Do you store money in the building? How long would you survive if a fire struck tomorrow? These questions and more are vital to guaranteeing the future security of your business and ensuring that should the worst happen, your SME can survive.
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