10 things to consider before starting B2B

Opening your own business is tempting, especially due to lots of benefits coming from this form. However,  it is worth to consider those 10 things before starting B2B.

1. Form of business

There are different types of firms/companies e.g. self-employment or limited liability company etc. You should to pick one that will be in line with your expectations and business vision. Also crucial is to evaluate different profits, as well as challeges or constraints, which comes from different forms.

2. Perspectives in B2B

IT is worth to analyze the market, in order to evaluate the potential possibilities for contracts. Of course, it is not possible to predict future trends. At least you are able to have an outlook on the situtation and make a concious decision about starting your business. Bear in mind, that working ‘for yourself’ is more risky than being employed. This is probably something to cover in separate post.

3. Insurance

Good to remember to take care about insurance. Of course, life insurance should be at least considered (here, the decision is yours). Additional insurance, which is not common when you are FTE, is Liability Insurance. This one is to protect you from mistakes and issues, that your work may cause.

4. More duties on B2B

While being, FTE there are close to none duties related to regular management of paying taxes, VAT, and another public fees to be covered on monthly basis. With running your own small business, you have regular payment schedules to maintain. Really good to find a professional help to release you from at least some of those duties. Which leads to the next point.

5. Accountancy

Depending on type of your business, the accountancy can be simple or complex. This also influence potential costs of accountancy services. Consider verification of all  pros & cons. Certain types of accountancy may lead to higher business costs but also greater potential tax deductions. At this point, this is worth to search for professional who can lead you through the details.

6. Tax charges and deductions

Depending on the type of business and services in scope, it is good to assess what tax thresholds may be applicable. Each situation is different, and the best is to analize your specific case. Do not forget about potential possibility of tax deductions (which may not be applicable in all forms of business).

7. Costs while on B2B

You should be prepared for the regular business related expenditures. These charges may be applicable, even in the situation when you do not have any active contracts. This may be e.g. mandatory public health fee, accountancy costs, or some other monthly subscriptions.

8. Law constraints

You should familiarize yourself with local law, or at least find someone who can help you with this. This also concerns verfication of types of services or groups of products you plan to deliver. Examples can be: whether you can, should or must have VAT ID; which type of services to add to your business (in Poland this is called PKD); what tax reductions you can use etc. As things are changing in Polish tax law, probably at some point, I will collect them in some form of overview.

9. Mindset

While working as FTE, you have boss, certain organization structure, conventions, customs etc. When changing to your own business, this status quo changes. Now you are your boss, and you have your partners & customers. To find yourself in it, it would be good to be prepared for the changes.

10. Additional constraints for B2B

Be aware that when you change to B2B, you do not have any holidays, sick leaves or additional benefits (medical care, life insurances etc.). While evaluating B2B or contract, you should take those aspects (rather lack of them) into account. Of course with contract terms, there are more aspects to assess, than only holidays or benefits, but this is quite a deep topic.

To sum up

This is the overview in the nutshell. Definitely this is just a start list. However, depending on your needs, a few more topics may come. Above-mentioned also do not cover the topic fully. Probably something to elaborated in more details by me in upcoming posts. Please remember, that law constraints, taxes etc. tend to change, and those may impact your profitability or trigger the need for adaptations.

Last, but not least, I can recommend good book, which uncover a bit some mysteries having own business. This book is “Company of One” written by Paul Jarvis. Really good position if you are interested in learning more about running small business.