Are you thinking about launching your own business? If you are, you are not alone. You might become one of the six million small and medium-sized enterprises (SMEs) in the United Kingdom,
If you are just getting started, we have got some pointers for you, from developing a business strategy to comprehending tax, benefits, and legal frameworks as a new business owner.
Start-up ideas and inspiration for starting a new business
Of course, the first step is to select a company concept that you are interested in. Make sure it is something you are enthusiastic about so that you will be satisfied investing your time, money, and energy into making it a success!
Start by determining whether a product or service is realistic by looking at Google Trends, conducting market research, or even creating a blog or social media page to see whether there is interest in the product or service.
You will need to establish a niche in order to distinguish yourself from the competition – is there a need in the market for something? Are you able to make use of specific talents and experience that you already possess? Do you have a unique point of view on a particular issue?
Next, decide if you want to create an internet business or if you require a physical location for your firm. If you are considering starting an internet store, it might make more financial sense to do so from the comfort of your home.
What do I need to think about when launching a new business?
Aside from a fantastic idea that you are enthusiastic about, you will also need to think about the following:
1. A great new business name
Choosing a name for your company is a vital first step since it demonstrates the personality of your brand and helps you stand out from the crowd. Your company’s name should be distinctive and appealing to your target audience – and this is your opportunity to be imaginative.
It is also important to think about how you will define your branding so that you can distinguish yourself from your competition, as well as what steps you should take to protect your intellectual property, such as patents and copyrights, and trademarks.
2. A legal structure
A legal structure is one of the first things you will need to decide on when starting your own business, and it is one of the most important decisions you will make. The sort of legal structure you select will have an impact on the following:
How much tax you pay
How much control you have
What happens if your business makes a loss.
The three most common types of businesses are sole proprietorship, limited liability company, and business partnership. Each has its own set of advantages and disadvantages.
The legal structure you choose will be determined by the type of business you have and there are advantages and disadvantages to each type of business structure.
A professional accountant or tax advisor is essential in order to ensure that you have the most appropriate legal framework in which to manage your firm. They will also be able to help you with finding out things like what is the memorandum of association.
3. Create a business plan for your company
A business plan is an essential document for any company, regardless of its size. It assists you in gaining an understanding of your strategic goals, financials, market research, and potential hurdles, among other things.
You will also need to develop a budget as part of any new business strategy you implement. The cost of starting a business can vary greatly depending on a variety of factors, such as whether you need to purchase specialized equipment, rent a business space, or operate your business from home or another location.
4. Obtain funding and financial assistance.
What amount of capital do you require to start a business? It will vary depending on the product or service you provide. However, as previously stated, you will need to consider this question before embarking on your new business enterprise.
If you are starting off small, you may not require a significant amount of capital.
However, if you have identified a number of costs in your budget, you need to be aware of how you intend to fund your project. Will you take advantage of your savings? Or are you planning to seek outside assistance in beginning a new business, for example, loans from friends, relatives, or a bank?
Keep in mind that you may be able to discover grants for new businesses to assist you in alleviating some of your financial stress. The advantage of receiving a small business grant rather than a loan is that you are not typically required to repay the money.
It is a good idea to look into possible government financing for new enterprises. Crowdfunding is another innovative source of finance.
5. Make a plan for your advertising campaign.
Now that your finances are in order, it is time to consider how you are going to attract clients and expand your firm.
It is important to think about marketing and branding when promoting a new business, as well as how you will balance physical and digital promotions.
Some things you may want to do include:
Conduct competitor research – this will help you better grasp the market, set your prices, and figure out how to stand out from the crowd.
Create a social media presence – Social media is a fantastic tool for showcasing your brand’s personality, connecting with customers, and even selling your items with platforms such as Facebook Shops and Instagram Stories.
Create a website that is optimized for search engines – optimize your website for search engines so that people may find your business and comprehend the items or services you offer
Sending emails and newsletters is an easy and cost-effective way to stay in touch with your clients while also increasing sales and profits.
Make use of flyers and print marketing to reach out to potential clients in a physical way.
network at industry events – get to know your sector and build relationships at virtual or in-person events to learn more about your profession.
6. Purchase your new commercial insurance policy.
The type of company insurance you will require is determined by the nature of your enterprise. No matter if you run an online store or provide a service, you may customize your insurance coverage to protect yourself against the costs of everyday hazards such as accidents, damage, and legal fees. In addition, you can install specific covers if you need to safeguard inventory or tools.
You can choose from a variety of covers, including:
Public liability insurance: this is essential if you have clients that come to your place of business or if you perform work on client sites.
Professional indemnity insurance: this protects you in the event that a client suffers a financial loss as a result of your negligent advice, services, or designs.
Employers liability insurance: In the event that you have employees, you are required to carry employers liability insurance.
7. Figure out what you need to do in terms of taxes.
Running a business entails a variety of legal and accounting duties, so it is critical that you understand what is expected of you. There is a tax-free allowance of £1,000, but after that, you are required to register with HMRC or Companies House under the Companies Act.
Sole traders are required to file an annual self-assessment tax return to HMRC after registering with them
Limited liability businesses must comply with the following requirements:
- pay corporation tax on the earnings made from the business
- submit a company tax return
- pay VAT
- Register with Companies House
8. Establish a framework for maintaining business records.
After you have determined what you need to do to comply with tax regulations, it is critical to keep on top of organization so that you can meet your tax obligations at various points throughout the tax year.
In the absence of a record-keeping system, you will spend a significant amount of time organizing documents when you have to complete your Self Assessment — valuable time that could otherwise be spent running your business or resting and recharging your batteries.
First and foremost, it is advisable to keep your business and personal finances distinct. This is due to the fact that some allowances, such as tax-deductible expenses, can only be used for business reasons — it is far more difficult to distinguish between money coming in and money going out when you are using a single account.
Launching a new business can be hard work and take a lot of investment in terms of your time, energy, and financial resources. However, once it is up and running, you focus your efforts on growing your business and seeing those profits roll in. Good luck!