Can Anyone Start Their Own Business?

Being your own boss is an attractive idea, especially if you think about working towards making your business idea turn into reality and you would like some additional income. However, there are many questions to ask when you might not be over 18, might not have the capital or the financial means and you might also have a mediocre credit score. Let’s answer all of these questions next.

Can you start a business if you are under 18 years old? 

If you are wondering if you can start a business as a teenager, the very straightforward answer is yes, but with a few extra challenges or steps. While you cannot open it in your name, have a bank account independent of someone older or have a credit score if you are 16 let’s say, you can get around these problems by having a parent or a guardian help you set up all of the above. Ask around and people you know might be able to help.

Can you start a business with bad credit or no collateral? 

Next you might be wondering if there are loans for people wanting to start a business but have a bad credit score for different reasons. Again, it is not impossible but it might be more challenging. It definitely depends on how bad your credit score is. There are a few banks and lenders that could offer you the financial support for your idea. Additionally, you might have the possibility of asking family, friends or professional connections to help and even form a collaboration or partnership with them.

Alternatives to bank loans for starting a business 

The key thing you need to secure after having your idea figured out, calculating your potential costs and your business registered is investment. You might not have the financial resources because of the reasons mentioned above but there are ways to go around that and see your idea come to life. There are many ways to cut your costs when starting a business and you can secure funding from other sources apart from banks & loans. However, keep in mind you will need a business plan to be trustworthy and people to back up your idea. If you are unable to secure a bank loan due to your age, credit score, or current income, there might be other options available:
Government grants & loans. The government offers support for different industries and regions and you might be eligible to receive support. However, keep in mind that you might need to have a business plan ready, along with projections of profit and loss. Check out the government’s website for more information and the latest updates on the requirement of different types of financial help for new businesses available.
Family help. If you are lucky enough to have a supportive family or friends who would be interested in your business idea, you can present the business plan and your idea in a convincing way. You could offer them shares or part in the decision making process, which would be beneficial for you too as their experience might prove valuable.
Crowdfunding. The various websites online such as Kickstaerte and GoFundMe allow you to present your business idea and plan to strangers who might be interested in supporting it. They can donate or buy your product in advance or you can offer them shares of the company.
To conclude, there are ways to go around different difficulties you might encounter when starting your business in less than ideal circumstances but is nonetheless possible. Don’t be discouraged by your current situation, present your ideas in a cohesive and trustworthy manner and you might convince people to join you on this exciting journey.

How to Start a Business on Amazon in the UK

Amazon is the world’s largest online marketplace where almost anyone can list their products and make profit. It is especially important to note it is a profitable venture for entrepreneurs with minimal start-up capital. However, at first it sounds simple but there is a lot of work involved in order to have a successful business on Amazon. Here you will find some key areas to consider when starting a business on Amazon.

What is an Amazon FBA Business? 

Most products listed on Amazon are from independent sellers using Amazon fulfilment. FBA stands for ‘fulfilment by Amazon’. This essentially means that Amazon holds the seller’s stock and distributes and ships it when orders are made. Additionally, the customer service is also handled by Amazon, including returns.
For the customer, this makes no difference as the delivery options, returns policy and customer service are the same.
An FBA is the middle ground between a very small, bedroom business and a company with a lot of staff. Amazon FBAs take a lot of the weight from the seller’s shoulders by handling part of the operations. The main focus for the seller is getting sales.
Additionally, you can have multiple FBA businesses around the world – you just need to deliver the stock to the Amazon FBA warehouses.
Using Amazon’s FBA is not mandatory – you can choose to be responsible for storing the stock, shipping & customer service but bear in mind that might mean you will need more resources such as money, time and staff.

Establishing your Selling Strategy 

Before registering for an online seller account on Amazon, you will be asked to choose a selling plan. Your choice here should be influenced by your strategy, what and how much you are selling. For example, on the Individual Plan you will be charged £0.75 for each item you sell. On the other hand, the Professional Plan costs £25, regardless of the number of items sold. Additionally, Amazon takes a referral fee from each sale as a percentage of the sale value, depending on the product category.

How To Set Up Your Amazon Seller Account 

Ideally, you would already have a company set up as you will need to provide:
Business email address or Amazon customer account;
Chargeable credit card;
Valid passport (identity verification protects sellers and customers);
Tax information;
Phone number;
A bank account where Amazon can send you proceeds from your sales.
After setting up your Amazon seller account, you will have access to Seller Central. This is the website where you can monitor sales activity, manage inventory and add new products, update your prices, communicate with buyers and solve customer service issues.

How To Source Your Products 

Depending on your strategy, you might be a reseller of popular products or a brand owner who manufactures their own. If you are in the latter category, sourcing your products should already be in place and you might be able to secure your stock in time. For reselling products you could use either dropshipping or be a wholesaler.

How To Add Products 

While you can sell almost anything on Amazon, provided it is not illegal, there are some categories that are open to all sellers, some require a Professional account and some require approval, while some are completely prohibited to be sold by third parties. Check out where your products you intend to sell fit before you choose your selling plan ideally.
To add your products you can do so using Seller Central or via an API, either Amazon Marketplace Web Services (MWS) API or you can build your own.
A Product Listing should contain:
A product identifier, such as GTIN, UPC, ISBN, or EAN to specify the exact item you’re selling.
A SKU, which is a product ID you create to track your inventory;
Offer details, including price, product condition, available quantity, and shipping options;
Product details like name, brand, category, description, and images;
Keywords and search terms to help buyers find your product.
If there is already another seller listing the same products, you’ll match an existing listing. The product identifier might be already in place in this case. Amazon combines data from the different sellers and offers on a single detail page. Sellers can contribute to the listings detail page information and request reviews of that information, to ensure the information displayed is correct.
In the case of a completely new product, a new listing will be created. You can also register the product you own under a registered trademark using Amazon Brand Registry. This is a free service that allows you to have more control over product detail pages using your brand name.
In order to fill out the Product Detail Page you will need to input:
● Title: 200 characters max, capitalize the first letter of every word;
● Images: 500 x 500 or 1,000 x 1,000 pixels to increase listing quality;
● Variations: different colors, scents, or sizes;
● Succinct, descriptive sentences highlighting key features;
● Description: Keywords improve the chances that people will find your listing.

Marketing Your Products 

On Amazon, the most popular products usually feature Prime shipping, which is free to Prime members and provides fast shipping. You can get the badge on your products by using Amazon FBA described above.
You can also advertise your products on Amazon so they show up top of the page. This gives you more visibility and better reach. Another way of promoting your products is using a limited time deal or a discount coupon for customers.
Setting a competitive and fair price is the straightforward way to ensure your success while selling on Amazon. There are hundreds if not thousands of products in the same category and customers are always looking for the best deal.
After your first sale, encourage your customers to leave reviews on the page of the product they purchased. Listings with multiple positive reviews have a higher chance of selling to future customers, as it shows you are a trustworthy and reputable seller.

How to Start a Business (Limited Company)

8 steps to set up your limited company 

These steps will ensure you are compliant and correctly set up with the UK government as a limited company. You can operate as a sole trader which just requires you to register differently with HRMC.

1. Decide if forming a limited company is right got you 

Advantages of setting up as a limited company include; limitation of personal liability, professional status, beneficial tax efficiency and planning. However, drawbacks include; needing to do a more administration, publish your personal details publicly and you will have legal accounting requirements as a limited company. If you are looking to commit to a full-time, more professional venture that you will invest substantial time and effort in growing forming a limited company is a great option.

2. Register your business 

There are several steps to registering your business officially with the government, for advice and help with the process you can use a formation agent. They will save you time, money and stress so you can get to the fun part of running your new company! National Business Register have over 35 years experience forming companies, read more about their services here. You will need to decide on the name of your company, who and how many directors you will have and how many shares each director will have.

3. Employing someone as a limited business 

You will need to pay income tax and National Insurance contributions for each employee so will need to set up a PAYE. This government resource is a good directory for what you will need to cover if you have employees, it also takes you to details regarding your tax self assessment form – get bookmarking!
In terms of employment law – know your basics. A great site for basic legal documents is Rocket Lawyer.
ACAS is a goldmine of informative articles on everything from employment law to workplace Covid advice.
If you’re looking to contact a solicitor our accredited partners, Thursfields have the experience and legal expertise to guide you throughout the life cycle of your business. Read more here.

4. Get an accountant 

It is advisable you get an accountant as a limited business. You are legally required to submit yearly accounts to HRMC alongside your self-assessment forms and Confirmation Statements. Ask friends, fellow business owners and find out more about our accredited accounting partner, Stewart Associates, here.
Remember to keep organised and maintain detailed financial records of everything to do with your business. It may be boring and the last thing you want to do at the end of a busy day but future you (and your accountant!) will love you for doing it. Download your accounting software to your phone to keep organised even on the go.

5. Do you need to register for VAT? 

If your businesses turnover exceeds £85,000 per annum you have to be VAT registered, register here. If you are under this threshold registering is an extra process however it does mean you can claim VAT back on goods and services you use for your business. If you are setting up as a limited company you are probably quite serious about making a go of your business so if you don’t register for VAT (which gives you the ability to claim VAT back on items purchased for your business) you are effectively paying 20% more than you should for anything that includes VAT (which is most things). Just remember to keep those receipts!

6. Understand your tax 

Tax is one of the main factors that sway people to form a limited business. As a sole trader you can pay between 20%-45% tax on your profits whereas a director of a limited company will pay 19%. However don’t go mad spending 81% of your profits, there are other costs, especially with employees (see point 3) limited companies are responsible for. This is where having an accountant comes in really handy. Also having accounting software such as Xero, QuickBooks or Sage will keep things organised on the go.

7. What insurance do I need? 

There are legal requirements for insurance but this decision is also influenced by the type of business you have and how much ‘peace of mind’ you want to pay for. We’ve outlined a few basic forms of insurance below to get you started.
Employers Liability Insurance – this is the only legally required form of insurance for a small business owner. This is to cover any employees that are injured whilst working for you. If you operate with no insurance and have staff working for you, there can be a penalty of £2,500 per day.
Management Liability Insurance (Directors’ and Officers’ Liability Insurance) – this covers the individual directors personally rather than the business as a whole. This can be helpful if things do go wrong as directors are open to having claims of malpractice brought against them with potential fines, disqualification (this will mean you won’t be able to be a director of a future company) and even prison sentences. When taking out this insurance check your policy covers insolvency and large shareholders (over 15%) as many policies do not protect you in these cases.
Public Liability Insurance – this is to cover customer injury. Accidents do happen and not having this insurance if you have a shop/salon etc could be costly. Also note some clients and suppliers may request you have this insurance as part of your contract with them.
Contents and Portable Equipment Insurance – this covers all the technology and physical belongings you use to operate your business. If you are running your business from home and have contents insurance it’s worth checking the wording of your policy as some do not cover equipment used in a commercial capacity.
Professional Indemnity Insurance – this is for businesses that offer advice or consultancy services. This insurance will cover you if a client of yours makes a claim against you stating they have incurred financial loss after acting on your advice. In these industries clients may insist you have this form of insurance and it will help bolster your professional reputation if you do.
Cyber insurance – this will insure you against any claims made if you have a data breach. You should consider this insurance if you hold large amounts of customers data and/or sensitive customer data. This may become more important as you grow and will be valuable to have as you build the data on your customers to optimise your marketing strategy and potentially increase your product/service offering.

8. What are your responsibilities as director? 

The term director does come with some legal responsibilities. Alongside ensuring your business is compliant e.g. has licenses with the local authority and/or the correct insurance for your employees there are some actions you will need to do.
Ensure your corporation tax is paid
File annual accounts with HRMC
Write the companies ‘articles of association’ when you form the company and then follow them. These can be updated after registering
Keep detailed company records and report any changes in a timely manner
Notify other shareholders if there is a possible conflict of interest where you will personally benefit from a purchase the business makes
If you follow these steps you will have a compliant and solid foundation from which to grow your business. If you’re still unsure, we’ve outlined the main differences between being a sole trader vs limited company for you. Alternatively if you’ve decided becoming a sole trader is the best option for you read our guide on how to set up as a sole trader here.

How to Start a Business (Sole Trader)

7 steps to set up your business as a sole trader 

These steps will ensure you are compliant and correctly set up with the UK government

1. Decide if being a sole trader is the right set up for you 

76% of businesses in the UK are sole traders and this is how many people setup. Advantages to being a sole trader include; keeping things simple in terms of administration, you can employ people and it’s a relatively straight forward process with HRMC. However, there are also draw backs; you will be personally liable for any debts the business incurs and will have limited access to external finance options. If you are just starting out and are setting up a low-cost business becoming a sole trader is a great option.

2. Register with HRMC 

Once you have decided you are going to operate as a sole trader you will need to let HRMC know by registering for a self-assessment tax. HRMC will then send you a letter with your 10 digital Unique Taxpayer Reference (UTR) which will allow you to go online and set up your account.
If you have done a tax return online before grab you UTR (unique taxpayer reference) and fill out this form – CWF1. If you’ve forgotten your UTR find it here.
If you have a business that you run alongside being employed by another company it is still worth looking into whether you should register. The Gov website has a test page here. Alternatively speak to an accountant for advice, more on that later.

3. What to do if you employ someone as a sole trader 

A common misconception of being a sole trader is that you can’t employ people however as long as you have the correct set up you can. You will need to pay income tax and National Insurance contributions for each employee so will need to set up a PAYE. You will need to pay income tax and National Insurance contributions for each employee so will need to set up a PAYE. This government resource is a good directory for what you will need to cover if you have employees, it also takes you to details regarding your tax self assessment form – get bookmarking!
In terms of employment law – know your basics. A great site for basic legal documents is Rocket Lawyer.
ACAS is a goldmine of informative articles on everything from employment law to workplace Covid advice.
If you’re looking to contact a solicitor our accredited partners, Thursfields have the experience and legal expertise to guide you throughout the life cycle of your business. Read more here.

4. Get an accountant 

You can do your books yourself however unless you particularly enjoy this aspect of running your business getting an accountant is not only a good idea, it’s essential. When you are just starting out and trying to keep costs low it may seem like an unnessccery outgoing however if you make a mistake, file something incorrectly or just miss something from HRMC having an accountant is a life saver. Ask friends, fellow business owners and find out more about our accredited accounting partner, Stewart Associates, here.
Remember to keep organised and maintain detailed financial records of everything to do with your business. It may be boring and the last thing you want to do at the end of a busy day but future you (and your accountant!) will love you for doing it. Download accounting software to your phone to keep organised even on the go – Xero, QuickBooks and Sage are all popular and user friendly solutions.

5. Do you need to register for VAT? 

If your businesses turnover exceeds £85,000 per annum you have to be VAT registered – register here. If you are under this threshold registering is an extra process however it does mean you can claim VAT back on goods and services you use for your business. Don’t forget to keep those receipts!

6. Understand your tax 

This is where the accountant will come in useful however a good rule of thumb is put aside 25% of your income. Don’t touch this until the end of the financial year (sole traders need to pay their tax for the previous year by the 31st January every year) and you should be golden. Alongside your income tax you will have to pay National Insurance Contributions throughout the year. Here are the thresholds
Annual profits below £9,568 (2021/22) = £3.05 per week.
Annual profits between £9,568 and £50,270 = 9%
Annual profits over £50,270 = 2%

7. What insurance do you need? 

There are legal requirements for insurance but this decision is also influenced by the type of business you have and how much ‘peace of mind’ you want to pay for. We’ve outlined a few basic forms of insurance below to get you started.
Employers Liability Insurance – this is the only legally required form of insurance for a small business owner. This is to cover any employees that are injured whilst working for you. If you operate with no insurance and have staff working for you, there can be a penalty of £2,500 per day.
Management Liability Insurance (Directors’ and Officers’ Liability Insurance) – this covers the individual directors personally rather than the business as a whole. This can be helpful if things do go wrong as directors are open to having claims of malpractice brought against them with potential fines, disqualification (this will mean you won’t be able to be a director of a future company) and even prison sentences. When taking out this insurance check your policy covers insolvency and large shareholders (over 15%) as many policies do not protect you in these cases.
Public Liability Insurance – this is to cover customer injury. Accidents do happen and not having this insurance if you have a shop/salon etc could be costly. Also note some clients and suppliers may request you have this insurance as part of your contract with them.
Contents and Portable Equipment Insurance – this covers all the technology and physical belongings you use to operate your business. If you are running your business from home and have contents insurance it’s worth checking the wording of your policy as some do not cover equipment used in a commercial capacity.
Professional Indemnity Insurance – this is for businesses that offer advice or consultancy services. This insurance will cover you if a client of yours makes a claim against you stating they have incurred financial loss after acting on your advice. In these industries clients may insist you have this form of insurance and it will help bolster your professional reputation if you do.
Cyber insurance – this will insure you against any claims made if you have a data breach. You should consider this insurance if you hold large amounts of customers data and/or sensitive customer data. This may become more important as you grow and will be valuable to have as you build the data on your customers to optimise your marketing strategy and potentially increase your product/service offering.
If you follow these steps you will have a compliant and solid foundation from which to grow your business. If you’re still unsure, we’ve outlined the main differences between being a sole trader vs limited company for you. Alternatively if you’ve decided forming a limited company is the best option for you read our checklist on how to set up a limited company.

5 Things to Consider When Making a Website for your Business

Setting up a website for your business is a great way for customers to find you, showcase your products/services and build your reputation.

1. What kind of website should you choose? 

Depending on what your business does, you’ll need to decide which kind of website is best for you. We’ve listed out the below the basic functions of different businesses, depending which one you fall under will directly effect what your customers will want to see on your website.
Services – information about what you can provide your customers with, where they can find you, how they can contact you and some background information/testimonials or reviews. An enquiry form or simple booking service may come in useful as well.
Products – customers will want to see all of the above but you may consider adding a shopping feature to your website.
Community organisation – information about your current projects and past projects, how people can get involved, contact details and background information about the organisations mission or vision. A blog my be a great way of keeping people up to date and informing them about current events.
Freelancer – this is a great way to showcase your work if you are an artist, creative or any other kind of freelancer. You can add portfolios, examples of your work, projects you’ve worked on, contact details and even a blog to share updates with potential clients or collaborators.

2. Should I use a template to build my website? 

If you are looking for an informative or ecommerce website there are some amazing platforms out there which have easy to use templates. If your business offers something more complex you may consider engaging a web developer to help you build your site from scratch. If you want your site to be constantly updated, you will need a CSM (content management service) these template websites will have this built in and developers will be able to code this into your website too. Some template platforms out there include:
NBR – National Business Register offer a website and email service. This can be paid for yearly or is free when you take out Business Name Registration protection.
Squarespace – this enables you to build a professional looking website quickly. It is intuitive and even has marketing tools to help you maximise your online presence.
Wix – similar to Squarespace it has customisable templates and tools to help you build your site.
Shopify – if you are a product based business this is an amazing way to get your online shop up and running. It has integrated analytics tools, a dashboard and lots of add-on apps available to help you market and grow your business.
Etsy/depop/eBay – you can set up a shop within these sites. Benefits of this include having a well-known name attached to your business however it may look a little less professional to some as you won’t have your business name as the URL. Also there are thousands of users already on these market places so coming high in the search results will require real effort and may take some time. However, if you’re starting small these are a great place to start.

3. Should I have social media accounts for my business? 

Yes! Social media is a great place for people to discover your business, build social proof and showcase your talents. If you’re not keen on social media you can keep it very low key but regular posting and interacting with people will help build your account and reach. Do some research to see which platforms your competition uses, what channels your customers use most and what type of content works best for your offering. Also consider which platform you are personally most familiar with.
You can set up a business account for free and will have basic analytical tools to help you track your progress. We’ve listed out a few below with some advantages to help you decide.
Facebook – having a Facebook page will help people find you and allow you to post photo’s and information about your business. Facebook tends to have a slightly older audience and works well local community and product based businesses.
Instagram – has lots of different ways to present your content. This platform is best if you have a product which is particularly visual.
Twitter – this is prodomitely a text based channel however there are options to add visuals, but not to the same extent as with Facebook and Instagram. Twitter is a great place to re-post articles, share ideas/thoughts and get industry news. FYI Twitter is the only social platform used more by men than women (70% vs 30%).
LinkedIn – this is a great way to build professional connections within your industry. Some people do share personal news through this channel but it is usually connected to business or industry in some way. It’s great for posting news about your business, sharing industry articles, networking and posting job vacancies.
YouTube – ideal if you like producing video content. It’s particularly useful for explaining products/services. Create ‘how to’ video’s for your products or services to maximise this channel.
TikTok – speaks to a younger audience and has yet to be monetised in the same way as the above channels.
This is not an exhaustive list so doing research into which channels your customers use most is essential.

4. What should I put on my website? 

Content is king! Setting up the foundational content for your website is the place to begin. Keep it really simple and clear, outline the basic information you think a potential customer would like to know and make yourself contactable.
Your business name & logo.
Details of your offering.
Full contact details.
Visuals of your offering – this can be photos of products or you can use graphics/stock photos if you provide services.
After this you can start to have some fun! Think about the content your customers enjoy consuming, content that answers questions your customers may Google and types of content that would work for your business. Keeping your website up to date, relevant and engaging is paramount so depending on how much time you have to devote to this, you may want to ask a professional for help. You can draft in agencies, have part-time or fill-time marketing assistants/managers or you can put time aside in your schedule to keep on top of things. Remember you don’t have to reinvent the wheel for your social media, take content & copy from your website and reuse it on the different platforms.

5. Should I use digital marketing? 

As you build your business you want to maximise your digital presence as being online can multiple your reach experientially. We will go into more detail about digital marketing in a separate article as it is an entire industry within itself however these are the 7 main areas you may want to look at.
SEO (Search Engine Optimisation)
PPC (Pay-Per-Click)
Social Media Marketing
Content Marketing
Email marketing
Mobile Marketing
Marketing Analytics
You will find experts in each of these areas along with some people that have strengths that cross-over. If you are an established business it is worth either engaging an agency or employing a individual specialist through a digital recruiter to ensure you are getting exactly the help you are looking for.