Around 46,000 new businesses were started in the UK during 2023. Running your own business is immensely rewarding and exhilarating, however, the setup process can be exhausting and overwhelming.
To ensure a smooth start, and a greater chance of long-term success, there are several crucial steps to follow. Here’s some to help you navigate the process:
Know your “why”
Make a list of the reasons “why” you want to set up a business in the first place, and keep it safe. It may include wanting to be in control of your destiny, earn more money, freedom to work flexible hours to look after a young family, or elderly relatives, etc. When things get tough it's good to look back at your list, it will help!
Business Idea and Research
Clearly define your business idea, and assess its viability by doing market research to ensure the demand is there, look at competition, and industry trends.
Business Plan
Outline your objectives, target market, competition analysis, marketing strategy, financial projections, and operational plan. Fledgling business owners can make a lot of mistakes by rushing into things without pondering these aspects of the business.
Business Structure
Decide on the legal structure of your business. Common structures in the UK include sole trader, partnership, limited liability partnership (LLP), and limited company.
Register Your Business
If you're a sole trader or partnership, you'll need to register with HM Revenue & Customs (HMRC). Limited companies and LLPs must be registered with Companies House.
Business Name
Choose a unique and suitable name for your business. Ensure it's not already in use and that the domain name is available if you plan to have an online presence.
Branding
Develop a logo and establish a brand identity. If you can’t afford a designer, look at tools like Canva. You can quickly and easily create a logo, business cards, and letterheads. Just bear in mind that Canvas logo templates are customizable and can be used by anyone. This means that your rights to the logo are non-exclusive and you can't register it as a trademark.
Taxation and VAT Registration
Register for taxes with HMRC. Depending on your turnover, you may need to register for Value Added Tax (VAT). It's also crucial to understand your tax obligations. Consider hiring an accountant or tax professional.
Separate Business Bank Account
A big one for me, and one I would like to put in block capitals! I plan to do a separate post on this subject but for now, make sure you set up a business bank account. As a bookkeeper, I cannot stress this enough! As soon as you have decided on a name and registered the business, open a business bank account and separate your personal and business finances. This is easy to do and can be done online in most cases. A dedicated business bank account provides a clear and accurate picture of your business’s financial health. It allows you to monitor cash flows, profits, and expenses without the interference of personal transactions. It is never too soon, there is no benefit to waiting until your business grows bigger.
Accounting Software
Again another important one for me, and again I will cover it in more detail in another blog. There are lots of accounting software available, and some will suit more than others depending on the business size, and other factors. The main accounting software on the market is Xero, Quickbooks, and FreeAgent. An accounting software will enable you to send invoices and record expenses. It will provide insights and reports and will enable you to file self-assessments and VAT directly from there. Don’t let cost put you off, there’s free accounting software available if you open certain business bank accounts. These are ideal for sole traders and entrepreneurs.
Funding
Check if there is any funding you can access, such as start-up loans.
Insurance
Consider business insurance, such as public liability insurance or professional indemnity insurance, depending on the nature of your business.
Marketing and Sales
Develop a marketing strategy to promote your products or services. Plan sales and promotional activities to attract customers. Set up social media platforms, and create a website. Social media marketing can be time-consuming and draining. As your business grows, this is something you could look to outsource to a VA/Social media manager.
Networking
Build a network within your industry and community in person and on social media platforms such as LinkedIn. Explore potential partnerships that could benefit your business. Collaboration over competition all day long!
Compliance and Regulations
Stay informed about industry regulations and compliance requirements. Ensure your business adheres to environmental, health, and safety standards.
Licenses and Permits
Check if your business requires any specific licenses or permits. This can vary depending on your industry and location.
Data Protection (GDPR)
Ensure that you comply with data protection regulations, especially if you handle personal data. Familiarize yourself with the General Data Protection Regulation (GDPR).
Health and Safety
Understand and comply with health and safety regulations applicable to your business.
Continuous Improvement
Regularly review and assess your business operations, and seek feedback from customers for continuous improvement. Don’t forget your personal development. As a new business owner, you are likely to be responsible for HR, Health & Safety, and many other areas. Make sure you are up-to-date with relevant guidelines and legislation.
Remember, every business is unique, so adapt these steps to fit your specific industry and circumstances. Seeking professional advice and guidance, especially from legal and financial experts, can be invaluable during the setup process.
Good luck
Nikki
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