So many questions go through your mind when starting a new business. What business name should I use? What is the right legal status for my business? What branding do I need? How much market research do I need to do? What do I need for my business premises? How do I manage cashflow or write a business plan? When do I inform HMRC and companies house? Where do I get advice on intellectual property, marketing, recruiting staff, buying machinery and equipment? One must consider many things when starting a business in the UK.
Nurturing Your Business Idea
Every step you take from here on will get you closer to the success of starting a business. Depending on the nature of the new business, the work which needs to be done can be categorised into six sections. Before discussing these, it is crucial to stay positive and to continually picture the new business up and running and successful.
STEP 1 ‐ EXTENSIVE MARKET RESEARCH
One of the most important tasks before starting a new business is to conduct extensive market research to understand all you need to know about your market. You must:
- Identify problem areas in your new business type.
- Identify your competitors.
- Identify your target audience.
- Understand the needs of existing and potential customers.
- Market capacity for this type of business.
- How will your new business win the market.
STEP 2 – THE BASICS OF STARTING A BUSINESS
There are a number of basic tasks you need to do to get your new business up and running.
- Choose a Business Name
- Branding and Logo Design
- Decide on the Best Legal Structure
- Business Bank Account
- Business Insurance
- Business Premises
- Recruiting Staff
- Website Design
- Licenses and Permits
- Patent or Brand Protection
STEP 3 – THE LEGAL ASPECTS OF STARTING A NEW BUSINESS
There are a number of legal requirements you will need to consider at the outset. These include:
- The legal status of the company, which will have implications as to how the company is run, how accounts are kept and how tax is paid. The status could be:
- Sole Trader
- Limited Company
- Limited Liability Partnership (LLP)
- Community Interest Company (CIC)
- Companies house; limited companies will need to register their name with Companies House, and submit annual return every year.
- Tax and national insurance; payments vary depending on the legal status of the company. These need to be checked with your accountant.
- Consumer law, including licenses and permits for your particular product or service.
- Company insurance. There are a number of insurance covers you will need to take. These include:
- Employer’s liability insurance. £5 Million cover is the legal requirement.
- Public liability insurance to cover the public from accidents and injuries.
- Professional indemnity insurance for professional mistakes affecting others.
- Business Property, contents and stock insurance.
- Employment law to protect the employees of your company. These include:
- Employment Act
- The Equality Act
- National Minimum Wage Act
- Working Time Regulations
- Health and Safety Regulations
STEP 4 – FINANCE OPTIONS FOR FUNDING A NEW BUSINESS
Any new business will need funding, particularly for the first three years whilst the business is getting established. Your business plan will indicate the amount of funding you will need. There are a number of ways you can get funding, however the present economic climate might make it harder. You can consider one or more of the following:
- Bank Loans
- Credit Cards
- Sell Shares of the Business
- Sell Assets
- Government Grants
STEP 5 – MARKETING STRATEGY
You must have a marketing strategy to inform potential consumers of your products and services. There are dozens of ways you can market your business. An extensive study needs to be done to find the most effective for your new business type. A few you may wish to consider in your marketing campaign can include:
- Online Marketing
- Email Marketing
- Direct Marketing
- Newsletter Marketing
- Content Marketing
- Trade Show Marketing
- Search Marketing
- Word of Mouth Marketing
- Direct Mail Marketing
- Media Marketing
STEP 6 – PROTECTING YOUR NEW BUSINESS
Finally, you must take steps to protect your new business or business idea from theft, fraud and other criminal activities. This mainly includes getting your company and branding trademarked, which must be done in the various countries that you do or will operate in.
Anything Else to Start a Business in the United Kingdom?
So the answer to the question, “What do I Need to Start a Business in the UK?” can be summarised in five words... positive attitude and hard work. The following statistics demonstrate the huge number of new businesses being formed every day. You can therefore rest assured that you are not alone. All you need is a good idea, belief in yourself and prepared to work hard.
“Entrepreneurs are starting new companies at a record pace of 80 an hour, according to data collected this year.” - The Telegraph, July 2016
“In 2017, there were 5.7 million businesses in the UK. Over 99% of businesses are Small or Medium Sized businesses.” - Commons Briefing Papers, December 2017
“In London, there were 1,519 businesses per 10,000 resident adults. In the North East there were 657 per 10,000 resident adults.” - Commons Briefing Papers, December 2017