15 May, 2020
How to make your Business Setup Survive the Current Economic Conditions?
Tough economic conditions always bring the best out of businesses. Sometimes the challenges can be too hard to face, while in other cases the conditions could be manageable – but what matters is the resilience with which businesses continue to optimize returns from their business investment, thrive, and keep going.
The first step in any business is the business setup process. So in current economic conditions, what should the company registration process involve? How can the business continue to provide services for businesses?
Setting up an LLC Business:
The right legal structure can take your business across many horizons. In UAE, the LLC business is one of the most common structures. The main reason for company registration under the LLC business structure is that in an LLC business or a Limited Liability business, the liability of the business is limited to the assets and business investments that the business itself possesses. This means that in your business setup, the LLC business structure would be the process to be followed. The biggest advantage is that the owners, as individuals, are treated as separate entities from the LLC business.
Naturally, this provides a sense of security for owners and entrepreneurs during company registration, as the structure gives them personal indemnification from any loans or liens, thereby directing them to pragmatic business investment decisions.
Forecasts and Projection:
The proverbial elephant in the room has to be addressed since business investments should give returns on continuity, revenue and profits. As an LLC business, it would be critical to demonstrate to your investors and stakeholders on the path that your forecasts and revenues follow. However, tough economic challenges may prove the path to be bumpier than you would have expected. This is why it is always safe to have multiple forecast scenarios for revenues and profits, by taking the business transformations, pivots and diversification into consideration. Not only would your LLC business look visionary, but your solid idea also materializes into numbers.
Insulate yourself for a pivot:
One of the key steps in your business setup is to ensure that your company registration gives you a strong ability to transform or pivot with changing trends and times. As a business investment, if your trade license is to contain additional services for businesses that you may initially have no idea to pursue, it may look like additional investment. But the same would be a worthwhile business investment if after 2 years you wish to diversify and your paperwork is all done. Many LLC businesses tend to miss this step and end up struggling at later times when there is a paradigm shift. So it would be a practical move to ensure that at the stage of the LLC business setup you are well prepared to provide services for businesses. This particular insulation brings your idea and number projections into action.
Keep Costs Optimal:
Low costs are always good, and high costs are sometimes tough to manage. But the key is to keep your costs optimal and scalable, so you can go lower if needed, and also expand organically. This way, your LLC business has the right services for businesses, with optimal costs to manage them, so your revenues and profits are on track. Right at the company registration stage, your plan should be to set up your company in optimal business locations and offices that give you the perfect value for your business investment.
At the end of the day, your LLC business should not only be scalable but should have the right steps taken during the business setup stage. Every company registration is different, and if you believe another legal structure suits you better, then go for it.
For more advice on business setup and choosing the right services for your business, do reach out to us.