Every organisation – whether a small business, a multi-national or
a charity – has a structure to how it is set up and run.
In today’s blog, we look at the options for structuring an
- Legal status
- Products, services, markets and sectors
- Vision and values
Anyone who is not employed by a company but is earning money has
to register with HMRC, whether as a self-employed individual or a company
director. You must also pay the relevant taxes (eg income tax, National
Insurance, VAT, corporation tax) and keep the correct financial records for
your business activities.
trader – Many people who choose to work as freelancers rather than
employees set themselves up as sole traders. This can be for anything from
gardening services or dog walking to IT support or personal training. Sole
traders often give their activities a company name, set up a website and carry
out marketing activities, even if they don’t register the business as a limited
A sole trader must register as self-employed with HMRC. You will
keep all the profits from your business after paying tax but you will be
personally liable for any losses and debts.
companies – these are legally and financially separate from the people who
run them – so if they fail (presuming you have met all legal responsibilities)
you won’t risk losing your personal possessions (house, car, savings) to pay off
any debts. Examples are:
- Limited by shares, for companies with shares
and shareholders who receive any profit. The legalities and responsibilities of
a private limited company compared with a public limited company can be found
– but the
main difference is that a public limited company can offer shares to the public
on the stock exchange.
- Limited by guarantee, where the profits are
invested back into the organisation.
- Private unlimited company, which doesn’t have
to file accounts with Companies House, but where members and shareholders have
unlimited responsibility if there is a formal liquidation.
sector organisations – These might be registered as a company
limited by guarantee (see above) or a charity – or simply operate as a
fundraising and/or awareness-raising organisation. Examples include hospices,
arts organisations, animal charities and environmental organisations.
Most companies have a hierarchical structure, with Directors, Managers, Departmental Heads, Team Leaders and Supervisors, as well as general workers.
Directors of a limited company will have specific legal
responsibilities, which can include anything from ensuring accounts are filed
correctly and on time to complying with legislations on issues such as working
hours, discrimination, and health and safety.
Managers, and other staff members who lead a team or head up a
department, operate as a middle level of management, with responsibilities for
carrying out orders from the directors, motivating and delegating tasks to
their team, delivering specific projects and facilitating the day-to-day
running of the organisation.
One mistake that many owners of growing businesses make is failing
to delegate. As a business expands, it’s important to employ managers and to
take on staff or freelancers who can handle specialised tasks such as admin
support, sales and marketing, HR and IT.
services, markets and sectors
The structure of an organisation will reflect the products and
services it supplies and the markets and sectors it operates in.
For example, a company supplying capital equipment to
manufacturers and a gym might both have a structure that includes directors/managers,
a sales team and administrators; however, the first company would additionally
employ engineers, whereas the gym would need trained fitness professionals. Some
of these roles might cross over, for example a personal trainer might also
spend some time on administrative jobs or social media.
Some organisations have their structure defined by legal
requirements, for example a school may be required to have a separate governing
body to carry out checks and balances on senior leaders.
Charities and not for profits usually rely on support from
volunteers. There are specific regulations about how you treat and safeguard
volunteers and the benefits you can offer them, from training to expenses. You
can find out more here: https://www.gov.uk/volunteering/volunteers-rights.
Every organisation will have its own vision and values, which are
usually set out in a mission statement on the company’s website. This explains
the company’s operational approach, from ethical issues to customer service.
Companies operating in the same field might take very different
approaches, for example, three different printing companies might in turn offer:
- Value print for customers ordering in bulk
- Specialist print, such as laminated designs and
- Environmentally friendly print: recycled
paper, vegetable oil-based printing ink and printing machines operated by a
renewable energy source
When writing a mission statement, you should keep it brief and
impactful while outlining what your organisation does, the specific approach
you take and your vision and values.