Starting any type of business, whether it’s selling a product or service, is a very exciting thing. But it can be incredibly scary too! So let’s take a look at some of the things you need to consider to get your business off the ground.
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I’m going to assume that you’ve already got a business idea. If you haven’t, a simple way to find one is to write down everything you’re good at. Now write down everything people will pay for. Then find a business idea that crosses both lists. It’s not a foolproof plan but it’s a start! And it gets you onto the next section.
There are 3 main structures you can choose from when you start your business in the UK; a sole trader, an ordinary partnership or a limited company. There are lots of pros and cons to each of these, and the final choice for your business will depend on your particular circumstances. But let’s take a quick look at some things to consider:
Sole Trader benefits:
Sole Trader drawbacks:
Ordinary Partnership benefits:
Ordinary Partnership drawbacks:
Limited Company benefits:
Limited Company drawbacks:
The simplest business structure is probably the sole trader, however, whichever option you choose, it’s not set in stone. Many business owners start off as sole traders as then move to limited as their business grows and vice versa.
This very much depends on whether you’re going self-employed, an ordinary partnership or you want to be a limited company. If you’re going self-employed (also known as sole trader), you need to register with HMRC for a self-assessment tax return. But you only need to do this once you earn more than £1,000 (that’s before you take off any expenses). Other than that, there’s not much else for a sole trader to do to register a business.
If you’re going to be an ordinary partnership, both partners need to register with HMRC for self assessment straight away. There’s no £1000 limit here. Also, one of you (the nominated partner) will need to register the partnership for a tax return too.
If you’re going limited, it’s a different kettle of fish. You’ll need to register with both HMRC and Companies House. You’ll need to choose a director and a shareholder (they can be the same person). Also, identify the people with significant control (PSC) and prepare a memorandum and an article of association. These are documents that state that all the shareholders agree to form a company and set out the rules for running the company. Companies House have documents available that you can use so you don’t need to create yours from scratch. You’ll need to register with HMRC for corporation tax.
When you first set up your business you might already have an idea for what you want to name it. You might have no idea at all, and that’s OK too, I certainly didn’t! Picking a name for your business can be a long process. My personal recommendation is to either pick a name that is meaningful to you or makes it obvious to your customers what you do. Even better if you name your business something which does both!
If you’ve got a name in mind that makes you smile every time you hear it, then choose that one. It will make you happy and that will really help on those days when things get tough. Equally, if there’s a name that makes it very easy for customers to understand what you do, that can be really helpful. Whichever way you go, please don’t go too generic. There are so many businesses on Facebook called “Handmade with love” or “My art”, you’d never stand out!
Once you’ve decided on a name, you need to check it’s not already being used. The last thing you want is to be forced to change it 6 months down the line. So look for it everywhere. Google, social media, domain name checkers, Companies House, check if it’s trademarked etc. Go into it being confident that you had that name first (and maybe consider trademarking it too for extra protection).
Once you’ve chosen the best business structure for your circumstances, you can start to actually build your business.
The amount of money you need to start your business will vary depending on what kind of business you’re running. However, there are some costs that all businesses will need to budget for. Business insurance is a big one. Do not start your business without getting some insurance to protect yourself. The other big one is some legal paperwork, i.e. terms and conditions, contracts, privacy policy etc. There are places you can get these for free, however, how good are they going to be? The more protection you can have, the easier you are going to find your business journey.
After those big two, there’s all the other costs. Examples include a website, domain name, hosting, selling fees, bookkeeping software, etc. The list goes on, and that’s before we even get started on any costs for the actual products or services you’re going to sell. The best thing I can recommend you do is write down a list of everything you think you might need. Then research everything. Get prices from lots of different places so you know where you stand. Then you can start making a plan of how much you need to spend and when.
Before we go any further, opening a business bank account should be near the top of your list! There are lots of free options out there now too. So even if you are starting a new business with no money, this is something you can do which won’t cost a penny. It’s so much easier to manage your spending when you keep your business and personal finances separate.
Depending on your business, you could look at building a website. Or get yourself set up on selling platforms or both! You need to look where most of your customers buy things from. Are they mostly on Etsy or Amazon? If so, create your stores on there. Would they rather purchase directly from a website? Get yours built.
There are different ways to get money into your business. You could apply for a business loan. If you search for start up loan or small business loan you’ll find several different places that will fund you. However, these come with risks. Obviously, you are going to need to pay that money back at some point. And it’s usually including interest on top. So make sure you read the fine print and know what you’re agreeing to.
There are also small business grants. You can often find them on council websites. These are usually given to support a specific outcome. For example, funding new computers or taking on staff. They don’t need to be paid back, however, if you don’t use them for what they have been given for, you could find yourself in trouble. So again, read the small print so you know what you’re signing up for.
Now that you’ve got your business set up, you can move on to getting it out there into the world.
There are lots of different things you can do to help your business get out there. A common one to start with is writing blogs. Research different questions that your customers might ask and answer them with a blog post. Learn about SEO (search engine optimisation) to ensure your business gets found online. There’s little point in writing a blog post if no one ever reads it! And once you’ve written it, share it everywhere you can. Emails, social media, other websites (with the owner’s permission of course!), etc.
Social media is an obvious place to launch your business, but you don’t own it. It can be taken away like that (imagine me snapping my fingers here!) and then you’re left with no way to reach your customers. So it’s a good plan to create an email list. Set up a business email address first, and then there are lots of companies that offer mailing list services. One idea to gather customers’ email addresses is by offering a free downloadable business relevant pdf. Something that will help your customers and make them want to give you their email address. Just make sure you follow GDPR rules and have their permission to email them.
Whatever way you decide to market your business, ensure you are consistent with it. You’ll find it a lot harder to grow your business if you’re not regularly showing up.
Building a business on a budget is difficult. However, there are marketing things you can do that don’t cost a penny. For example, creating your business pages on social media sites. That doesn’t cost a thing. There are also companies out there that will let you set up an email marketing list for free when you have a low number of subscribers. Great for when you’re trying to get your startup going.
Don’t get lured into paying for ads on social media. If you want to pay for ads, that’s completely up to you, but you don’t have to. It’s perfectly possible to run a successful business without ever paying for an ad. If you are going to consider paying for ads, wait. Wait until you’re getting high interactions on your posts organically. That way you’ll know that what you’re posting is good quality. Then you can use the ad to reach more people.
Of course, there’s also marketing offline to consider. If your ideal customer regularly reads the newspaper, then it makes sense to consider putting an ad in it. However, do your research first. Find out exactly which paper they read and how often. If they only read the Sunday paper, there’s no point putting the ad in the Monday paper (p.s. I haven’t read a newspaper in about 20 years, do they still do Sunday papers?).
Basically, my tips here are to use all the free channels available to you first. Then, if you’re going to spend some money, do your homework first. Don’t waste money spending it in the wrong places where your customers will never see it.
It’s a good idea, when you’re starting a business from scratch, to get yourself on some social media channels. You need to get your business name out there. And this can be one of the quickest ways.
First, find out where your ideal customers like to hang out and create your business pages on there. You don’t need to be on every platform. This can actually hurt more than help, as you can spread yourself too thin. Pick your favourites and come up with a marketing plan that works for you. You don’t need to post every day, but consistency is imperative here. You’re trying to build a community of loyal followers and they want to hear from you regularly.
I am by no means an expert (I’m not a marketer after all!) but I’ve finally got to a point where I’m happy with what I post. I’m happy with the schedule I’ve chosen. It’s working for me. But what I post won’t be what you post. You need to make your business stand out. Try new things. Don’t be like everyone else and post the same old rubbish! Make your posts engaging; the algorithms love that!
Starting and running a business by yourself can be very lonely. Connecting with other entrepreneurs will make your business experience much more fun!
There are several places you can go to find support to start your own business. A good site to start you off with is www.business.gov.uk. This has the basics on there to get you going on all aspects of your business operations. It can also help if you’re looking to develop your business, as it has sections on expanding and growing a business. However, it can be a little dry to read!
Another place you can go to is your local library or council website. These places often have business events in your local area where you can speak to people face to face. Google “your town council business support” and you’ll probably find the right page! A lot will also have information on there for any grants you can apply for as well.
You need people in your corner when you’re working for yourself. And there aren’t many people more supportive than another business owner. You can use social media to find others selling similar things to you or something completely different. Contact the business owner and introduce yourself. You might be ignored or you might just find your next best friend. Don’t believe me? I met one of my best friends through Facebook who is also another bookkeeper. Alison runs her own amazing business, Flourish Accounts. Even though we have similar clients, there is no competition between us. But neither I nor my business would be where it is today without her.
Starting a small business takes courage, resilience and stamina. You CAN make the business you want to start a huge success. You just need to believe in yourself, and actually START! Good luck!
Ell Evan Bookkeeping are not Tax Advisors and so our advice and suggestions on the application of tax rules cannot be construed as tax advice.
