The to-do list for starting a new business can feel never-ending. To help new entrepreneurs get started on the right foot, the UK’s most popular company formation agent, Quality Company Formations, is here with the essentials.
Follow this comprehensive checklist to find out everything you need to do to start your own business.
1. Develop your idea
Before you start trading, you must be confident your business idea is viable, especially if it’s to become your full-time livelihood. If you want your business to support you and your family’s living costs, there has to be the potential to make a good amount of money. So, how do you know if you have a good idea?
First, consider whether your business will fill a gap in the market. Does it solve a problem that isn’t currently being addressed? This will improve your chances of having a strong consumer demand.
You can research the potential demand size using tools like Google Trends or searching for statistics in industry reports. At this point, you should also identify your target market. Find out about their needs, preferences, and behaviours using surveys and market research.
And finally, analyse your competitors. See what they’re doing well and how you could differentiate yourself to stand out.
2. Write a robust business plan
A business plan should outline your goals and how you plan to achieve them. A strong business plan typically includes:
- An executive summary, i.e. an overview of your business’s purpose and mission
- A description of the nature of your business
- Market research on your industry, market size, and target audience
- A breakdown of your organisational structure and team
- Details of your products or services and their benefits
- A marketing and sales strategy
- Financial projections of your estimated revenues, expenses, and profitability over the first few years
An ambitious yet realistic business plan will help you stick to your goals and make your business more attractive to investors.
3. Choose a business structure
The business structure you choose will affect your legal responsibilities, personal liability, and the tax you pay.
You can run your business as a sole trader, i.e., a one-person business, or as a registered company.
As a sole trader, you’re personally responsible for your business’s debts. Alternatively, you could run a Partnership and share the business’s profits and liabilities with another person.
Many business owners prefer to register their business as a company, which offers certain legal and tax advantages.
One of the most popular company structures in the UK is a Limited Company. In this structure, the business is a separate legal entity from its owners. This structure offers more protection but comes with additional responsibilities and administrative work.
Another popular company structure is a Limited Liability Partnership (LLP). This combines elements of a partnership and a limited company, providing limited liability protection to partners.
Choosing the most suitable structure depends on your business goals, the number of people involved, and your preference for managing risk and liability.
4. Get a business bank account
A separate business bank account is essential for managing your finances, especially if you’re operating as a limited company. This allows you to keep your personal and business finances separate.
It comes with other benefits, too. Many banks offer loans, credit cards, and overdrafts tailored to businesses which aren’t available to individuals. It also helps you maintain a professional image, as customers and suppliers are more likely to trust paying a business account rather than a personal one.
5. Understand your tax obligations
Taxation is one of the less exciting but essential parts of running a business.
If your business’s taxable turnover exceeds £90,000 per year, you must register for VAT.
Sole traders and partners must register for Self Assessment with HMRC and complete their tax return once per year.
If you’re operating as a limited company, you need to register for Corporation Tax within three months of starting trading.
If you employ staff, you’ll need to set up a PAYE (Pay As You Earn) system to handle employee income tax and National Insurance contributions.
You could consider working with an accountant to make sure you meet all your tax obligations.
6. Set up your financial records
Accurate accounting is essential for tracking your business’s financial health and compliance with HMRC.
Keep thorough records of all your income, expenses, and receipts. You could do your accountancy yourself using spreadsheets or accounting software like Xero or QuickBooks. Or you could outsource the task to an accountancy service to save time and reduce the chance of errors.
7. Create a brand identity
You’ll need recognisable branding for customers to notice and remember you. Your brand can also represent your business’s personality and values, and you can use this to stand out against competitors.
Start by choosing a unique name—this will make you more memorable and easier to find in an online search. You’ll also need a logo, brand colours, and a go-to font. Using the same design style across all your marketing materials will make your business appear high-quality and professional.
Also, consider the tone of voice you want your brand to have. What would your target audience find most appealing? You could choose from friendly, humorous, formal, sophisticated, inspirational, or countless other options.
8. Create your website
Your website is often the first place new customers will go to learn about your business, so make sure it’s professional, user-friendly, informative, and consistent with your branding.
If you have a shop front, make sure it clearly shows your address and opening hours. You should also include contact details so people can find out more information or submit a customer service enquiry.
Include pages that clearly detail your products or services. Use relevant images to make the content visually appealing. You can also include e-commerce functionality so customers can easily and securely purchase your offerings directly through your site.
Creating a website is simple and low-cost using tools like Wix or Squarespace, or you could consider using a professional website developer.
9. Set up a marketing plan
Your marketing will help you reach your target audience and generate sales.
Plan which platforms you’ll use, such as social media channels, influencer marketing, physical print ads, or email campaigns. You’ll also need to decide your strategy for how you want the marketing materials to look and how you plan on getting them to the relevant people.
Also, plan your budget for how much you are willing to spend on advertising and promotions.
Ask new customers how they found out about your business to see which marketing techniques were the most successful.
To sum up
Once you’ve completed these nine essential steps from company formation experts, Quality Company Formations, you’ll be ready to start trading!
Find out more about how Quality Company Formations can help you register and run your business by visiting their website and exploring their wide range of useful company services.