Start your own business in the UK with ease with the help of this in-depth step-by-step guide.
When you start thinking about setting up your own business, it can be challenging to know where to start. However, starting your own business in the UK can be extremely rewarding and propel you toward meeting your financial and career goals all in one.
We’ve created this guide to help you start your own business in the UK. Keep reading to learn the steps to starting a business in the UK.
Steps to Starting a Business in the UK
Here are the right steps you need to follow to start a business in the UK:
1. Clarify your business idea
The first step in setting up your own freelance business or limited company is to clarify your business idea. To do this, you need to identify your niche and establish whether there’s a suitable gap in the market. You should determine whether there’s an existing industry problem and whether you have the knowledge and skillset to solve it.
Consider your unique selling point and what will make your future business stand out from competitors. Speaking of competitors, research the current market, and see who you’ll be up against. This will help you create a plan to compete and gather consumers. You can also consider hosting a focus group with potential consumers to gauge interest and understand what consumers want.
2. Create a comprehensive business plan
The second step to starting a business is to create a business plan. A business plan outlines your product or service, target industry, marketing strategy, and consumer and financial projections.
Not only is this a vital document to secure funding at a later stage, but this also gives you a clearer idea of what you need to do to scale your business. You can also revisit this plan when your business is up and running, helping keep you on an even growth trajectory and avoid getting side-tracked.
3. Design a business structure
Before registering your business, it’s imperative to design your business structure. A business structure refers to the type of trader you are. In the UK, some of the most common structures include:
● Sole trader: You run your business on your own and don’t have any employees.
● Partnership: You’re starting your business with one or more partners.
● Limited Company: Your business is a separate legal entity from you or your business partner.
You can choose a structure that benefits your financial goals and work-life balance requirements. However, you’ll need to establish this early, as your business structure will largely dictate your taxing requirements.
4. Register your business with the UK government’s companies house site
Once you’re confident that you’ve established a structure that suits your business, it’s time to register it. Although this sounds like a cumbersome process, registering your business is straightforward and quickly done using the UK Government’s Companies House website.
During your registration, you’ll need to provide basic information about your business, so it’s integral to be prepared with the relevant documentation and personnel understanding before you start your registration. Here’s what you’ll need to prepare for registration:
● Company name
● Company address
● Nature of business
● Details of company directors
● Stakeholder information
● A memorandum of association (this is a legal statement signed by all shareholders)
● Articles of association (these entail written rules agreed by any shareholders, directors and guarantors.)
5. Open a business bank account
Your business finances are as important as your personal finances, and a good way to keep on top of them is to open a business bank account. This account makes it much easier to gain clear visibility of your income and outgoings and log all of your expenses for tax purposes.
We recommend that you research thoroughly before opening a business bank account.
You’ll need to find an account that offers competitive advantages like overdraft facilities, deposit protection, a switch guarantee, and low fees for overseas usage. Opening a business account is also vital for opening a business credit account, which is ideal for building a credit history and securing a business loan if you need one. Additionally, get in touch with insolvency practitioners from affordableliquidatons for expert advice on financial management and restructuring.
6. Register For VAT, PAYE and corporation tax
After opening your bank account, it’s time to register for taxes. You’ll need to register for all UK-related taxes, which include VAT, PAYE, and corporation tax. VAT is imperative if your business has an annual turnover of over £85,000. PAYE is a tax that you pay if you have employees.
This tax is used to pay income tax and national insurance contributions for education, healthcare and other public services. Corporation tax is a tax that applies to limited companies that you’ll have to work out for yourself. Overall, it’s a tax on profits made in the UK and overseas. If you live and work in the UK, but you were born overseas to a non-UK born father, then you should learn more about non-dom tax support.
Again, registration takes place on the government’s gateway for taxes. We recommend doing this as early as possible to ensure you can quickly pay your taxes in either April or January.
7. Find funding
Starting a business isn’t just as simple as sorting admin; it can be expensive and typically needs vast funding just to get off the ground. The primary funding sources include business loans from your bank, specific government grants, or crowdfunding from the general public. Your business plan needs to highlight how you plan to secure this funding, as you can present this to investors who will want to see whether your idea is both viable and profitable in the future.
8. Start your in-person or virtual workspace
Now, it’s time to launch. You’ll need to set up a workspace for you or your employees. This can take place at a physical office, or you can create a virtual workspace for remote employees or freelancers with the use of virtual collaboration platforms.
During your launch phase, you need to ensure that both you and your employees have adequate means to communicate important information and the necessary tools to conduct their work, such as computers, screens and other home office equipment.
Tip: Don’t forget to create a great business website so interested parties know where to find you!
Final Thoughts
Starting a business in the UK doesn’t need to be a stressful event, and it’s an exciting opportunity to start taking ownership of your future. By following these simple steps, you can get your business up and running with proper registration to start making a profit and get ahead as a business owner as soon as possible!
