Starting up a business can be a rewarding way to make a living, share your passion and/or contribute to your local community. And while many people dream of setting up their very own restaurant or bar, or perhaps a local beauty salon or dentist surgery, the path to setting up a business sometimes isn’t always clear or obvious. For the lowdown on how to unleash your inner entrepreneur, here’s our guide to starting a business.
How do you start a business?
Every dream starts somewhere, and while there are lots of tasks to complete when setting up a business, we’ve whittled these down to three main steps.
1.Decide your legal structure
In order to sell products or services, you will likely need to register your business and choose your legal structure. Read our guide on how to register as self-employed to learn about the differences between setting up as a sole trader, business partnership or limited company.
2.Obtain any licenses
Some of your additional responsibilities in setting up a small business depend on what sector you’re planning to operate in. For example, you may need a license to sell food, play music or run a stall in a public place. You should always do your own research but the GOV.UK license finder may be a good starting point as it may help you find out what official permits or documentation you require.
3.Check your responsibilities
Depending on the nature of your business, you may need to complete tasks such as:
- · Opening a business bank account
- · Setting up a payroll for employees
- · Establishing a workplace pension
- · Paying business rates
- · Checking the rules you must follow to sell products online
How do you write a business plan?
For many entrepreneurs, writing a business plan is an important step when starting up a business. It’s a chance to outline your company’s vision and unique selling proposition (USP) in a document, including your goals, staff information, and details about the products or services you offer.
A business plan may include the following:
- An executive summary. A chance to grab the reader’s attention with your key selling points, often displayed on one page.
- Information about your company. This may include your team members, your location and how people can get in touch.
- Details about competitors. You may wish to demonstrate that you’ve done your homework on your competitors and wider market as a way of persuading investors.
- Information about your products or services. This is a chance to explain what you’re going to sell, as well as details about your company’s assets and any intellectual property.
- Your finances. You can include information about your financial projections – such as sales – plus your expected costs and the money you already have to start your company.
If you’d like to know more, read our guide on writing a business plan.
Finding a business location
In a world where remote working or starting a business from home is becoming more common, there are a few considerations to make if you do wish to rent business premises. Some of the factors you may want to consider include:
- Who your customers are, including disposable income (which can help you price products) and demographics. Would your business appeal to families, students or young professionals, for example?
- Your competition in the neighbourhood. While a ‘captive market’ means consumers have little choice on where they spend money due to lack of competition, there may be advantages to being close to similar businesses. For example, suppliers may prefer the ease of travelling to one local cluster to deliver products , potentially leading to lower delivery costs or better deals with suppliers.
- Can customers get to you? Businesses that are close to good transport links may experience greater footfall. There are other communications issues to consider like the quality of broadband and mobile coverage in the area, which could affect your ability to make business calls, or customers’ ability to access WiFi, for example.
10 financial considerations for setting up your business
Setting up a small business may cost you less than you think. The Cambridge Satchel Company started life with a mere £600 budget and has since become a globally recognised fashion brand. But according to a 2016 study by Grant Thornton’s former Geniac project, the average UK start-up spends £22,756 in its first year. These are just some of the financial considerations to take into account when starting a business:
- Incorporation costs such as Companies House fees
- Accountants’ fees and bookkeeping software
- Buying stock
- Renting business premises and paying business rates
- Getting business insurance
- Obtaining licenses
- Employee costs, from salaries to recruitment fees
- Transportation costs, such as buying or leasing vehicles
- Marketing, such as building and hosting a website
- Equipment, from furniture and computers to POS systems
Starting a business from scratch?
While there’s a lot to consider when setting up a business, we hope we’ve given some useful guidance on how to get started. You can read more about how to set up a business on GOV.UK, and check out some of our other articles and guides on Tyl Talks.
This has been prepared by Tyl by NatWest for informational purposes only and should not be treated as advice or a recommendation. There may be other considerations relevant to you and your business so you should undertake your own independent research.
Tyl by NatWest makes no representation, warranty, undertaking or assurance (express or implied) with respect to the adequacy, accuracy, completeness, or reasonableness of the information provided.
Tyl by NatWest accepts no liability for any direct, indirect, or consequential losses (in contract, tort or otherwise) arising from the use of the information contained herein. However, this shall not restrict, exclude, or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.