Starting up a business will inevitably require different costs as there are so many variables to be taken into account. There are, however, simple guidelines that can be followed that will help you to keep costs under control. If you have more ideas then we'd love to hear them!

• It's all about the money, and so always keep a tight rein on it. This means watching every single penny and treating it like your last. This way you will question every expenditure and decide if it's something you really need in order to take the business forward or whether it's a luxury that can be saved for when more money is coming in.
• In the same way you also need to keep a very close eye on your cashflow and forecast. By reporting on your cash daily or weekly there won't be any unpleasant surprises down the line and you can deal with problems as they arise.
• To make this easier have everything going through one person. They will have all the financial information at their fingertips and will be able to manage your business's expenditures with a full understanding of the cashflow.

In a recent blog on LinkedIn a contact said of the growth in start ups, "More people are becoming self-employed and SMEs are being lauded as being the ones to drag UK PLC back into prosperity. Or is it a cynical ploy to reduce unemployment figures by having us creating our own temporary jobs?"

What are your thoughts? It's true that the government is putting a great deal of emphasis on the private sector to help the struggling economy and that more and more people are becoming self-employed. However, what are the reasons behind this increase in self-employment? Is it more opportunities to get into business, the lack of jobs, the public sector cutbacks, working to later ages, increase in university fees putting off potential students, greater encouragement of the entrepreneurial spirit?

Another important question is how successful these new entrepreneurs actually are, as if their new venture fail the unemployment figures, and the economy as a whole, definitely won't show any signs of improvement. So, how much support do new start ups actually get? How easy is it to access finance?

As we begin 2012, the economic outlook is somewhat mixed depending on which think tank, economist or business owner you talk to. If you are Robert Peston, however, the world is a very gloomy place and we are all doomed!

We can’t get away from the fact there is a level of uncertainty with the economy – just look at the eurozone. That saga will play into the hands of the Euro sceptics who are gleefully saying "I told you so", but as just over 50% of UK trade is with the EU, the future of the Euro and the EU as a whole will have a direct impact on business here at home.

Looking at the current worldwide economy and the various impacts it can have on the UK is another breakfast meeting all together. So let’s look at the situation we find ourselves in at the moment.

Perhaps you are in the situation where you know you want to start your own business, but have the really tough dilemna of choosing what type of business to open. People using a particular skill or expertise often take it for granted that they will start a business in that area, but the same isn't true for all of us.

Some entrepreneurs are actively trying to leave a previous career behind or have several ideas but need to pinpoint the one that will be most profitable. Finding the next big thing or current hot areas is not easy, otherwise we'd all be millionaires. Plus, once a new trend emerges it's often then flooded with businesses, which means survival of the strongest. So, you've got to get in fast, and be the best. Your choice of business will also depend on your budget. Do you need office space, stock, staff, kit? All this costs money, and so the lower your start up costs the better chance you will have of success.

The best businesses for 2012? Well, according to startups.co.uk these are ten of the best...

In a recent blog we discussed how age is no barrier to starting a business with entrepreneurs in their teens up to the nineties starting businesses. The government has obviously been listening, well in part, as the prime minister, David Cameron, is believed to be looking at funding young people looking to set up in business using a student loan style scheme. The idea was first proposed by Sir Richard Branson as part of the Virgin Media Pioneers Control Shift campaign.

Outsourcing is worth billions of pounds every year and yet there are still businesses that shy away from it due to misconceptions, which we will aim to clear up here:

Outsourcing can be too constricting

In the past it is true that some companies found themselves tied up in long-term deals with outsourcing companies that ultimately proved uneconomical and unflexible for the business. However, this is a thing of the past, and today we see shorter contracts and flexible terms dictated by the customer that result in more productive, successful relationships. Early ‘get-out clauses’ are also common.

With the change in working patterns we have witnessed so too has the use of freelancers grown 120% this year, reflecting how businesses are adapting to new technologies, budgets and work practices. So, while many are struggling to find work in the permanent job market, for others the route of a freelance may be opening many doors. Not only are many finding work as a freelance worker, but it's also a great way to test the water before setting up in business. For many it offers an opportunity to start building up clients and an understanding of how to manage your own time and finances before setting up as, say, a Limited Company.

Of course, it depends on your area of expertise, but particularly in demand are those with software development skills, along with graphic designers, content writers and Internet marketing. There has also been a rise in demand for outsourced admin such as transcription and data entry.

As part of the government's review into how it delivers business improvement and support services a number of changes were announced earlier in the year. Although the Business Link website, the government's online resource for business, will remain and continue to provide businesses with access to information, support and government services, included in the changes was the closure of the regional Business Link advisory service in November 2011.

Much of the information on regionally branded Business Link websites has been moved to the national Business Link website, and improvements to this site have been implemented or planned. These include the Contracts Finder, which is available now, and an improved experience for those starting up in business.

HMRC is considering proposals that will make online submission of VAT returns compulsory for all start-ups, something that is presently only a requirement for those businesses with a turnover of more than £100,000. If agreed, the changes could be applied as early as April 2012.

However, there is strong opposition from the Forum of Private Business, which released a report highlighting the problems with the present online tax system. They have no problem with using the online system - so long as it's fit for purpose.

How do you file your VAT returns? Would you be happy about being forced to file them online? Let us know your thoughts.

If your answer is yes then you are not alone as a recent British Chamber of Commerce survey highlighted the various concerns raised by sole traders when it comes to employing staff. Issues raised that have been putting sole traders off hiring included dismissal processes, sickness absences, equality legislation, statutory payments and flexible working. Some were worried about National Insurance Contributions, while unaware of the National Insurance 'holiday' for startups, highlighting the need by businesses to fully investigate the assistance that is on offer from the government. For example, did you know about the exemption to micro businesses to new domestic legislation for three years from April of this year?

Clearly the issues revolve not just around the actual hiring, but also the long-term costs and management of the staff and not surprisingly many sole traders have been turning to freelancers to fill the gap. It seems yet again the burden of red tape is preventing many small businesses from taking the next step to growing their businesses. Will the Red Tape Challenge bring any benefit to this area of legislation we wonder?

Image courtesy: Michal Marcol / FreeDigitalPhotos.net

Monday saw the launch of a national mentoring scheme with an aim towards educating small business owners on the requirements for getting bank finance. Backed by the British Bankers’ Association, The Prince’s Trust and others it is the latest in a series of plans to try and create meaningful change within the area of access to finance.

Somewhere in the region of 200 current and former bank managers will initially be made a ready resource for small businesses. The hope is to guide company owners through the processes involved in applying for a loan. It is the government's hope that these bank-sponsored, trained mentors will form the core of a much larger network of support. This is in response to the closure of its Business Link advice centres which are set to conclude this autumn.

Your article this morning in connection with the closure of support networks for business does highlight some potential shortcomings when it comes to Government policy on nurturing start-ups and growth businesses.

The demise of Business Link as you point out will not be missed by many, but on the whole, our experience of the organisation was positive. Nonetheless, reform was due, but will a group of volunteer mentors be able to provide the support required. After all, this is a commercial world, and therefore mentors will look to be recompensed as individuals take advantage of their knowledge. As your contributor Nick Wall comments, he estimates his advice would have cost him £100,000.

Whilst we are seeing the closure of support networks, I note that Nick Ogden is starting up business.co.uk. Although I have yet to investigate the portal in any detail, it can potentially provide an avenue for companies to seek advice.