According to StartUp Britain, over 600,000 new businesses were registered in the UK in 2015(1). Some survive; many don’t.
In order to give your business the best chance of survival, we’ve created a simple start-up guide with an overview of things to consider when starting your entrepreneurial journey.
1. Write a Business Plan
A business plan sets out the various elements that will determine your success, including business structure, market, customers, and competition.
Use your plan to set out your finances and show potential investors or financers the strength of your business.
Remember, your business plan isn’t a one-off document; return to it periodically to review your progress and spot potential pitfalls.
2. Formally Set up Your Company
Before you can start trading you need to officially register your business in the UK.
If you’re a sole trader or setting up a business partnership, register with HMRC for self-assessment and decide whether you’re trading under your own name or a business name.
To set up a limited company, you need an official name and address that must be registered with Companies House, agree company director(s) and any shareholders. You must also register for Corporation Tax(2).
3. Sort out Your Finances
Setting up a business bank account is essential if you are setting up a company, and advisable for sole traders as it provides you with an easy way to distinguish between business and personal expenses.
You may also require funding to get your venture started. There are various options available, including loans, grants, overdrafts, investment funding, and crowdfunding(3).
Startups gives some excellent advice on what your bank manager will be looking for before approving a bank account or loan(4).
4. Purchase the Appropriate Equipment
Most businesses require the purchase of stock, tools, equipment, furniture, and possibly a van. Although you will allow for this in your business plan, it’s important to shop smart when starting out, only buying if there’s a sound business reason and no other option such as secondhand.
5. Find a Suitable Business Premises
Unless you’re working from home or running a mobile business, you need business premises. There are many things to consider when searching for premises, including location, type, size, layout, and appearance.
If your business relies on footfall, you need a busy location close to your customers – people rarely like to travel far, especially when they can buy online. However, it’s not a good idea to set up too close to your competitors.
6. Take out Small Business Insurance
Finally, whatever sort of small business you have, you need insurance to protect against the unforeseen. Each business has different needs and challenges, so your risks will vary.
Most businesses require public and product liability, employers liability, building and contents, and business interruption.
A specialist broker for small and medium-sized enterprises will be able to advise on essential cover and can negotiate on your behalf to find the right deal for you.
