The Steps You Need to Know to Start A Business

The Steps you Need to Know to Start A Business

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New businesses are registered daily in the UK. In 2021 alone, there were over 750K of them registered in the country. It’s a burgeoning market for start-ups and businesses out there. However, even though making it all official is a crucial step in getting started, it doesn’t ensure success. Only 40% of companies survive over the first three years. Why? Because launching a profitable business demands thorough planning and preparation.

Before you begin, you must have done some solid groundwork outlining your concept and unique value proposition (UVP), how you intend to organise and promote your business, and how you will manage its finances.

In this blog, we are providing a checklist for Starting a Business in the UK. We will lay out easy-to-follow steps to start a business from scratch and hit the ground running!

Try Out Your Business Idea

Your business idea should address an issue that people have, close a market gap, and add value over the long run. This is the first step to what is needed to start a successful business. Have a think, what problem does your idea solve, or what need does it fulfil?

Your business idea should address an issue that people have, close a market gap, and add value over the long run.

Start by doing a SWOT analysis to determine the viability of your idea. Strengths, Weaknesses, Opportunities, and Threats constitute a SWOT analysis.

Try Out Your Business Idea

You may find the aspects of your organisation that are doing well by doing a SWOT analysis. These are your crucial success elements, and they provide your company an edge over the competition. You can ensure that you preserve these strengths so that you don’t waste your competitive edge. Finding strategies for utilising and enhancing these strengths is necessary for business growth.

SWOT analysis can also help you analyse your weaknesses that make your business less competitive than others. You may recognise these features and reduce or enhance them before they become an issue. It’s crucial to be honest while performing a SWOT analysis regarding your business’ flaws so you can effectively address them.

Develop A Brand For Your Business

Your market research will reveal how your rivals are positioning themselves. Utilise this information to establish a distinctive brand.

Your company name and logo are the two primary identifiers at this initial stage of the process. Later on, further branding components might include a webpage and marketing materials.

Your business’ name and logo are what give life to your vision.

Your business’ name and logo are what give life to your vision. Utilise our Business Name & Domain Search Tool, which has a catalogue of all names out there and is designed to help you secure your business name and domain. It’s critical because the name serves as an initial and lasting impression of your business. Being original and true to yourself and having a brand aligned with your own views and beliefs will position your business for success.

Create A Business Plan

This step is crucial towards setting up a business, whether in the UK or elsewhere. An overview of what you’re going to accomplish and how you’re aiming to do it may be included in a business plan.

It helps you concentrate on the direction your business must go in order to accomplish its objectives and persuades others that your business is a wise investment, which is especially crucial if you want to position your business to attract investment or raise finance.

Your business plan should include dedicated space for a Business summary, Business idea, Marketing and sales strategy, Management structure, Business Operations, and Financial projections. It is important to keep the reasons why you set up your business and your aims in mind when writing a business plan. It is good to review a plan yearly and this is a great way to focus your analysis.

Select A Structure For Your Company

To Start a Business in the UK, you need to register it first, and for that, you need to know the legal requirements. Below is a list of the different legal structures a business can take when being formed.

Sole Trader- a person who works by themselves and owns and manages their own business. You retain all of the earnings after taxes, and registration is free. It is the most typical business form for individuals who operate alone, such as freelancers, designers, and artists.

Limited Company (LTD)- This is a business that has a distinct legal status from its owners and directors, it is a completely separate entity. As the business goes into contracts and accrues corporate obligations, it reduces your personal accountability. This implies that you are not forced to sell personal property to pay off debt since the money you make belongs to the corporation and must be withheld as a wage and/or dividends.

Partnership- Like a sole trader, except both the partnership and the individuals need to register for self-assessment. If one partner goes, the partnership must end.

Limited Liability Partnership (LLP)- In regards to registration and accounting, it is comparable to a private limited corporation, but liability is divided among partners.

Determine Costs And Financing Sources

In your business plan, you will include the expenses related to launching and maintaining your business. To determine precisely how much you’ll need to spend, it’s important to take a step further and categorise these charges.

Stock, premises and business rates, licences and insurance, promotional materials, financial and legal advice, taxes and national insurance, office material like stationery etc., are a few of the initial expenditures to consider.

Knowing precise costs will allow you to explore the funding sources accordingly. For more on this, read our guide to financing a new business in the UK.

Learn About The Relevant Rules And Regulations

About a third of small-to-medium companies (SMEs) see red tape as a hurdle to success. However, things don’t have to be this way. The knowledge you need to get beyond these hurdles may all be accessed for free online.

The business section of GOV.UK website provides comprehensive information on all you need to know. While some of it may not be applicable to your business, the majority of it will. Knowing this information prior to making a business transaction is essential for your success as well as to prevent a fine or other severe penalties.

Obtain a License or Permit

You might need to get a licence or permit in order to conduct business lawfully in the UK.

Finding out what sort of licence you require is the first step. The Licence Finder on GOV.UK can help you with this. You can use this tool to locate the appropriate person within your local government.

The sort of licence you’re seeking, as well as any associated fees, will determine the cost of your licence. You might additionally need to provide documentation of an accredited qualification to get the licence or permit.

Determine Your Workplace

If at all feasible, consider starting off by working from home since commercial properties are a significant expenditure. This is a simple choice if you’re beginning a digital business such as graphic design or freelance writing. This may enable you to save on commercial lease and business rates. On your tax return, you’ll also be allowed to deduct a portion of household expenses, including energy, heating, lighting, broadband, and council tax.

If you are unable to work from home, using a co-working facility or shared business centre may help you save expenses. This also entails affordably hiring a desk or tiny office space inside a bigger establishment.

Determine your workplace

Start Marketing Your Business

Out of all the steps to setting up a business, marketing can make or break your business in the end. Therefore, before investing any significant money in creating or maintaining your unique value proposition, it’s a good idea to validate it. This way, you can be certain that when you debut, your offerings will appeal to and be purchased by your target market.

Marketing can make or break your business

It’s pretty common for business owners to launch into marketing their business and spending hefty sums on their branding and marketing collateral. It’s therefore incredibly important that you ensure that you’ve done your research ahead of this and your logo, branding and name isn’t infringing on any other business’.

Make sure to utilise our business name registration service for the UK to rule out any potential infringement of intellectual property.

It’s ideal if you already have a following as a result of creating pre-launch content. However, it’s totally fine if you don’t. The moment to develop one is now.

You may promote your company in a variety of methods, including word-of-mouth promotion, networking events, advertising in local publications and online, among many others. Digital marketing is now often the most effective way to get consistent results. More than half of marketing executives’ overall budgets were spent here in 2022. It goes to show the value of marketing in realising business goals.

Get Adequate Business Support

Even though starting and owning a business in the UK is exciting, the daily grind may be demanding. It is reported that a third of business owners look for guidance and information on managing their operations on a day-to-day basis. Additionally, about 40% of business owners sought out strategic experts to aid with expansion.

Finding the correct assistance can be essential for overcoming obstacles and avoiding potentially expensive errors.

Fortunately, expert counsel and business assistance are widely available. Start.Biz offers comprehensive assistance towards setting up a business.

At Start.Biz we help prospective and existing business owners with start-up packages and other services which support them and their business as they look to grow.

Summary

  • Use a SWOT analysis to try out your business idea.
  • Make sure your business name, logo and overall branding are good and unique.
  • Create a business plan that includes a Business summary, Business idea, Marketing and sales strategy, Management structure, Business Operations, and Financial projections.
  • Choose a structure for your company. This could be Sole trader, Limited company, Partnership, or Limited liability partnership
    Make a list of all your potential expenditures and figure out the source of funding for them.
  • Research the relevant rules and regulations for your business.
  • Check whether you need a licence or permit for your business type.
  • Determine whether you are going to work from home, lease a dedicated space, or get a place in some shared facility.
  • Market your business and establish a following. Use digital and traditional marketing methods.
  • Draw upon the services of a professional business support provider. It will make things a lot easier for you.

Get Your Business Off the Ground by Following These 5 Rules

Get your Business off the ground by following these 5 rules

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Establishing your own business may be thrilling and difficult at the same time. You need to consider several things, like a good Business Plan, a budget, costs, regulations and more. In this article, we go through our checklist of 5 things to consider and to help Get Your Business Off the Ground.

Considering this checklist before starting your business may help to reduce the risks and challenges later on therefore giving you the best chance to position your business for success!

Do Market Research

Market Research will help you create a winning Marketing Plan. It is among the key factors that make market research crucial for businesses that wish to make informed judgments.

Market Research will help you create a winning Marketing Plan.

You must be aware of the needs and preferences of your customer base if you want your offerings to be well received as a way to grow your new business. You may get key facts about your competition and current products or services via Market Research. The outcomes give you information about the prerequisites of being impactful in the market.

By helping you to decide on product features, prices, and promotions up front, Market Research contributes to reducing risk. Additionally, it helps concentrate resources to where they may have maximum utility and gives you a plan to build on.

Get Adequate Funding

Access to Finance for your company is a big deal, it is arguably the most important thing if you intend to Start a New Business. You must accurately pinpoint the resources from which you can obtain capital for your company. Additionally, it is preferable to have a strategy in place in order to effectively manage a business’ budget.

Refer to our Business Finance & Funding FAQ’s page for some common funding-related questions.

Raising capital can be the largest obstacle to getting things off the ground. If you aren’t self-funding your business, you’ll need to seek out alternate ways to raise money and often business owners use several options together to launch their business.

Loan

Business loans might not be possible here as you may often not have a business’ accounts to loan against, and as a consequence you may need to look at Personal Loans to start off with. A modest loan can help you get going much more quickly, especially if you’re purchasing expensive equipment.

It makes sense to shop around, given the high-interest rates right now. Draw upon different loan provider estimates and compare them to get the best offer with an affordable payback schedule.

Grants & Other Options

There is often some grant funding available for those wanting to start their business so this is worth researching well.

Other options may include Crowdfunding, Angel Investments, Incubators etc. To know more about this, read our detailed separate blog on the subject.

It’s worth adding that it’s always a good idea to acquire accounting software in order to organise and keep track of finances and do cost calculations through revenue predictions before participating in any early-stage financing rounds. However, with Making Tax Digital (MTD) applying to all tax payers who file self assessments with income or turnover over £10,000 by April 2024 it is now vital that business owners have compatible MTD software to send digital tax returns.

Create A Business Plan

The steps you must take for the launch and growth of your business are laid out in the Business Plan. This document is crucial for giving your business a focus, attracting the right professionals, and maintaining financial health. A New Business Startup Plan assures that you present your business in the best possible light to others who are assessing it, so be sure to keep such a plan on hand and be prepared to provide it upon request.

The steps you must take for the launch and growth of your business are laid out in the Business Plan.

Spend some time preparing the essential elements, such as:

  • Your statement of purpose, objectives and aims of the business.
  • A synopsis of your company.
  • A list of the goods and services you offer.
  • A review of the potential competition currently on the market at the moment.
  • A list of the company’s decision-makers and a brief profile of each.
  • Financial Plan, so people who look over it can see the opportunity.

Many entrepreneurs skip over competitor analysis, a crucial part of developing a Business Plan. However, it could come back to hurt you in the future.

Finding a niche in the market and understanding your rivals’ strengths and shortcomings in relation to your own is the focus of competitor analysis.

It’s important to analyse competitors because:

  • You will learn how to improve your own business strategy with its assistance.
  • It will explain how you may outperform your rivals in these areas to maintain customers’ interest.
  • It will give you a strategic advantage over other businesses in your industry.

Have The Right Tools

Making the right business software purchase is vital for boosting operational effectiveness. It is a key component as you build your new business. Buy the software tools early so you can achieve your company objectives quickly.

Here are some of the best software packages that SMEs have to take into account:

best sme softwares

Quickbooks – It is a good choice for bookkeeping and accounting software. Accounting software installation will guarantee that you are in control of your funds right away.

Xero – Is another cloud-based accounting software product allowing business owners to manage their finances. It has additional reporting and accounting tools to quickbooks but can be viewed as more complicated because of that reason.

Iris – It is an effective payroll software and is important for paying yourself or your employees.

Wix – It is recommended for website building. A website may serve as the public face of your whole company, especially for modern startups. Therefore, choose your website builder carefully because it will probably affect your subsequent actions.

WordPress – Is an alternative software for website building. It is preferred by some due to its SEO qualities and has plugin features and templates.

Shopify – It is a good eCommerce building tool to complement your online retail goals.

Monday.com – Is a CRM software that promotes faster sales processes that may increase brand loyalty and exposure. It is advised that you implement a CRM (Customer Relationship Management) system as soon as possible if your company will be engaging in any type of transaction.

HubSpot – It is a marketing software for developing and growing the brand. We advise using some type of marketing software to get started on building your brand’s awareness and attracting clients.

In addition to all these software packages, there are certain tools that you can access online for free, especially before setting up your business. Our Business Name & Domain Search Tool is one such source. It can help you easily sort out intellectual property questions related to your business name.

getting help

Get Professional Help

Entrepreneurs can never be experts in every aspect of running their new business. As the saying goes, a jack of all trades is a master of none. Therefore, making use of the expertise of seasoned professionals is useful to ensure that you get off to a good start. Help on the front of how to manage a small business, the legal and financial nuances, and a range of other things can go a long way towards your business goals.

Ensuring that your business is legally compliant is vital, therefore advice to ensure you are protected and carrying out all processes legally should be prioritised.

We sometimes think that seeking legal advice is only necessary when legal problems are at the door. Being proactive and putting in place preventive legal planning might be the greatest approach to put your company on the right trajectory.

When you seek legal advice after you’ve encountered an issue, it’s usually already too late or might have a serious negative impact on your company in the immediate and long term.

When you seek legal advice after you've encountered an issue, it's usually already too late.

By helping you steer clear of danger before you ever get into it, investing in legal professionals early on in the life of your company pays off handsomely.

An accountant and bookkeeper are other wise choices for a business to invest in. It can be particularly difficult for one person to manage every area of a business, and this is one area that can be easily outsourced and by doing so may not only give you more oversight as to your cashflow and profitability. It should also ensure that you’re abiding by the relevant laws and paying the correct amount of tax along with advising you on what you may be able to claim as expenses or claim back such as research and development.

Community organisations and mentors can also offer valuable advice and professional knowledge. They may urge you to examine your progress in order to get knowledge and advice regarding the path of your organisation. Their input may also assist you in avoiding costly blunders.

Entrepreneurs can usually locate regional businesses or community groups on internet social networks. This doesn’t mean you have to always pay out regularly for this help, by networking and meeting other business owners it’s likely that you will gain a sounding board for your business.

It is worth bearing in mind that some of this professional help could be in the way of training, having some training on how to amend your website rather than having to pay each time. A bookkeeper may offer training on how to use the accounting software to allow you to use it to its maximum efficiency.

Next Steps

By considering our checklist above you will be well-positioned to have success in your business venture.

At Start.Biz, we provide step-by-step help to businesses and help them get off the ground in the best way possible. We have a team of experts who cover all business frontiers and stand ready to help you realise your business goals!

Summary

  • Do market research. Be aware of the needs and preferences of your customer base to decide on product features, prices, and promotions up front to be able to reduce risk.
  • Raising capital is a crucial component of launching a business. If you aren’t self-funding your company, loans, grants or other sources may be useful.
  • Create a Business Plan that includes a statement of purpose, a synopsis, a list of goods and services, a review of the market, a Financial Plan, and profiles of the company’s decision-makers.
  • Small business software purchases boost operational effectiveness. Some of the best software packages include names like Quickbooks, Xero, Iris, Wix, WordPress, Shopify, Monday.com and HubSpot.
  • Consider employing or outsourcing for professionals such as Accountants, Bookkeepers, Website Developers.

Legal Requirements You Need To Know To Start a Small Business in the UK

Legal requirements you need to know to start a small business in the UK

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It can be challenging and confusing to understand all of the legal requirements for Starting a Small Business. One of the major concerns has to do with hiring employees and being aware of the laws and regulations for a business to meet employment regulations in the UK.
In this article, we want to put your concerns to rest by outlining the measures for consideration when Starting a Small Business in the UK.

Intellectual Property refers to Intellectual Assets, Ideas, Patents, Trademarks, Copyright etc.

Name Your Company

Your first job is to give your new company a name and make it distinctive. You can be accused of trying to present your company as another if the name is too close to one of an already existing company. Therefore you should do your research when selecting your business’ name.

Start.Biz has a unique Business Name Search Tool which allows you check whether the name of the business you want to use has already been registered with Company’s House, it also allows you to check various Social Media Handles, Domain Names and allows you to see what email addresses are available.

Companies House is a typical place many go to check whether the business name they want has already been taken, but it must be remembered that this does not cover the work of Sole Traders and Non Limited Businesses. There are also some words that are sensitive terms that are unable to be used when forming a company. It is also good practice to also complete a Trade Mark Check to ensure your business’ name hasn’t already been registered as a trade mark as you may be infringing someone else’s IP before you even start.

Start.Biz is on hand to assist in this, either through the tool or by contacting our team we are able to ensure the business name you register is not a copy of someone else’s business and no infringement of trade marks is taking place.

Register Your Company

You must officially register your business in order to start trading. You need to decide which business structure—Sole Trader, Partnership, or Limited Company—best meets your goals. It can be intimidating to launch a small business, but once you’re registered, the possibilities are endless!

It can be intimidating to launch a small business, but once you're registered, the possibilities are endless!

For more on this, read our Ultimate Guide to Registering a Business Name in the UK. It lays out in detail how you can pursue Business Name Registration or Trade Mark Registration.

Obtain a Licence

For certain enterprises to operate lawfully, the local government must provide a licence. Hotels, hair salons, street vendors, boarding kennels, and restaurants are a few examples.
To find out if you need to register or receive a licence, get in touch with your local government and ask to talk with Local Planning or the Building Control Office.

Get Insured

Once you’ve established your company, it’s vital to safeguard it in case something goes wrong. This is where insurance comes in.

Employer’s Liability Insurance

All companies with employees are required to have employer’s liability insurance. This is to shield you against any disputes an employee could bring after experiencing sickness or injury while working for you.

Commercial Motor Insurance

If staff need to use vehicles, commercial motor insurance is also required. You might also need to apply for licences if you sell food or perform music.

Public Liability Insurance

This covers the cost of claims made by members of the public for incidents that occur in connection with your business activities, for example, personal injuries or the loss or damage to property.

Professional Indemnity Insurance

This is mandated by law for certain professions, such as those of architects, attorneys, and some healthcare providers. This takes care of the price of any compensation granted to clients for losses or damages brought on by poor service.

Employing People

When the question is to describe the legal obligations of a small business, employing people is the front where much of it applies. If you plan to hire people, you must ensure that you abide by all applicable employment laws. You need to ensure that you are undertaking or setting up the following:

Icon Row

Perform Applicant Screening

It is your legal obligation as an employer to confirm that all potential employees are eligible to work in the UK. You can also be required to undergo a DBS check, often known as a criminal records check, depending on the industry you work in. If you and your company don’t, you might be subject to a civil fine.

It is your legal obligation as an employer to confirm that all potential employees are eligible to work in the UK.

Register with the HMRC

After hiring your first employee, you typically have four weeks to register with HMRC. Any taxes and National Insurance contributions must be withheld from your staff members’ salaries by you. If you don’t make the necessary preparations, you’ll also be accountable for paying any outstanding business or employee taxes at the year’s end.

Ensure Minimum Wage

The national minimum wage must be paid to all employees for all hours worked. Each employee’s age and position do, however, affect their pay.

Auto-Enrol in Pensions

Employers are required to enrol all eligible employees in workplace pension plans. There are a number of things such as age or hours worked/salary earned which may make an employee ineligible but this needs to be looked into on a case by case basis. There are many pension plans that either demand that you or the govt match a certain amount of each employee’s pension.

Employment Statement

All employees who will work for you for more than a month must have a formal statement of employment from you. Within eight weeks of their date of joining, employees must receive this statement that outlines the terms of their employment, including the hours and salary. In addition, staff should receive a contract. You can do so by integrating it to the statement of employment. Their rights, obligations, and working circumstances are specifically described in the contract.

Health and Safety

All businesses are expected to give their employees a safe place to work. A formal, documented health and safety policy is required if you employ more than five people. This covers a safe working environment, safe entry to the workplace, safe work processes, safe use of tools, safe worker relationships, and protection against injury hazards.

Create Internal Legal Documentation

Making internal legal documentation is one of the key requirements to start a business and a way to give your customers, workers, and possible investors trust in your company.

internal legal documentation

Privacy Policy

The current GDPR requirement in place mean that you need to ensure you have a Privacy Policy. Describe how your customers’ data will be gathered, utilised, kept, and safeguarded in your privacy policy. It ought to specify whether sharing of any personal information could be necessary.
Small firms are also legally required to protect employee information and to lay out a clear plan for its usage. The best approach to safeguard data is to store it in HR software. To guarantee that your employees are fully informed of how their personal data will be held, for what reason, and how long it will be retained, have a transparent Privacy Policy and make it accessible and up-to-date.

Company Manual

You will probably update and add to your company manual as your firm expands. In essence, it is a book that summarises how you run your firm. It must always be accessible to the workforce; you may either provide each employee with a copy or keep it easily accessible in another way for review. It may include:

Mission Statement

The mission statement should outline your company’s history, goals, and desired outcomes.

Rules of Your Business

Your company’s rules, together with any other company-specific regulations, are often extensions of any additional legal requirements. This might include things like responding to calls, desk policy beyond work hours etc.

Ensure Equal Opportunity

Employers are not permitted to discriminate against any employee based on protected traits like race, age, gender etc. There are several points in the hiring process when businesses might unintentionally slip up, so it’s critical to get knowledgeable about discrimination laws right away and ensure that you do not fall foul of them!

Employers are not permitted to discriminate against any employee based on protected traits like race, age, gender etc.

Don’t let legal obligations overwhelm you.

There is a lot to consider, so this may all seem overwhelming, but I hope this information will help you prepare and fulfil your legal requirements. It is preferable to begin small while keeping the overall vision in mind. To stay focused on your original goals, keep returning to your standard business strategy.
Visit the official UK govt website or get in touch with a legal professional immediately for help or advice if you ever have concerns or questions about certain legal obligations. Good luck with your business endeavours!

At Start.Biz, we help businesses get things set up. So, reach out to us today for all your business needs–legal or otherwise–and let’s position you for success!

Summary

  • Research potential names to ensure no infringement.
  • Register your company and give it a distinctive name.
  • Obtain a licence if your business is required to have it.
  • Get insurance coverage to mitigate possible risks. This may include employer’s liability insurance, commercial motor insurance and professional indemnity insurance.
  • When employing people, perform a DBS check, register with HMRC, ensure a minimum wage for employees, auto-enrol in pensions, provide an employment state that may possibly also include the contract, and set out a health and safety policy.
  • Create internal legal documentation, such as a privacy policy and a company manual.
  • Lastly, ensure equal opportunity.