When it comes to starting a business, many people assume that it needs to be a stressful process to be in a position where you’re ready to legally begin trading. However, despite there being rules and regulations that all new small businesses should follow, you can set up a new successful company in a matter of months.
In this guide, we’ve shared the five-step plan that you should work through when starting up a small business. Helping you to ensure your business is operating legally, this guide covers everything from registering your company to planning your finances:
1. Write a business plan
The first thing you should do when starting a small business is to create a business plan. This is a document that outlines where you want the company to be in a few years’ time, and shows a potential investor or your bank manager that you’re committed to making the small business a success.
The basic things that must be included in your business plan are:
- The objectives of your business and how to plan to achieve them
- Your target market, along with customer profiles and buyer personas
- Your planned finances and a cash-flow forecast
- Market research and evidence that there is a gap in the market/necessity for your new business idea
Along with providing you with a clear strategy for success, a business plan can help spot any mistakes that you may run into further down the line.
2. Choose your trading name
Once you’ve confirmed – in writing – that your business will be a success, it’s time to decide on a name! This factor has a huge impact on the future of your business and the ways in which you promote it, so don’t feel pressured to brand yourself with the first name that comes into your head. Take some time to think about it before settling on ‘the one’.
Generally, business names are more successful when they use simple terms in basic-English that are easy to spell and remember. It’s also a good idea to avoid limiting your business to one thing as a time may come where you need to expand and offer other services.
3. Register your small business
The most crucial part of starting a new business is remembering to register yourself as self-employed with HMRC. This provides you with a way to submit your tax returns at year-end and set up Class 2 or Class 4 National Insurance contributions.
With special thanks to the internet, you can fill in all of the registration processes for your new business within a matter of minutes through the HMRC online gateway. You can register as a sole trader, partnership or a limited company.
It’s important to do this within three months of setting up your business. If not, you could be fined.
4. Set-up a website
These days, many people turn to the internet for advice when they’re looking for new products or services. In fact, 67% of millennials and 56% of Generation X people prefer to shop online as opposed to in-store, so making your business visible online is key to mastering this growing market.
Your website is your business’ online home, so make sure that it’s easily recognisable as belonging to you. Opt for a domain name as similar to your business’ registered name as possible to make it easier for people to find you online, and consider an inexpensive hosting provider to keep costs down.
5. Plan your finances
As the director of your new business, it’s your sole responsibility to keep your accounts organised in order to calculate your tax bill at the end of each year. It’s a great idea to separate your personal finances from those from your business, so consider setting up a new bank account when you begin trading.
However, once you come to trading and your business begins to take off, you may find it difficult to manage your business’ finances individually. This may be the time when you need to invest in financial software or hire an accountant.
Financial support for new businesses
Depending on your personal circumstances, there may be funding available for your small business. This financial support can come in the form of start-up loans to cover the cost of new office equipment such as printers or desks, or Government grants such as the New Enterprise Allowance to help those who are currently receiving benefits.
If you’re dreaming of running your own business and think you’ve got a profitable idea, there’s never been a better time to get started. By using these five steps, you’ll be on your way to creating a successful small business in no time at all!