How To Start a Business UK: 10 Step Guide – Updated October 2022
There's no one I know today who does not either want to start a side hustle or to start their own business to make money.
Today I'm sharing 10 things that you must do before you go ahead and launch your own business.
These are absolutely critical to make sure you start off on the right footing for success.
Starting well will help you create a profitable business and achieve Financial Freedom faster.
I come from a family of entrepreneurs and I've seen businesses fail and succeed based on how well they were started.
Everything I share today will help you join the group of people who create successful businesses or side hustles.
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How To Start a Business UK: 10-Step Guide
Let's dive in now and look at 10 absolutely must-do things before you launch your own business.
1. Register Your Business As a Limited Company
Some people trade in their businesses as sole traders and carry on that way.
But I highly recommend setting up a limited company.
Especially if you're somebody who's looking to start it as a side hustle and turn it into a proper business.
A limited company is also suitable from a tax perspective if you expect to make £50,000 or more in business income.
The advantage of registering a business as a limited company is that you create a separate legal entity, one that's separate from you.
Hence why companies as are referred to as “incorporated”.
This gives you certain rights as a business owner to make sure that you are building your business properly.
If people are dealing with you and your business, then they're dealing with you properly from the perspective of a limited company.
It's also another way of ensuring that you secure your business's name.
When you get a limited company name, get it registered at Companies House.
Before that, search the Companies House register to make sure no one else is using that name.
If available, get it registered and that's the first step you should look to take to get your business started.
2. Buy a Domain Name
A lot of people start businesses without actually checking whether their preferred domain name is available for them to purchase.
Get a free domain name here and pay for cheap hosting available to only readers of The Humble Penny.
I love buying .com domain names because they are a lot more popular globally.
They just give you this feeling of a proper corporation.
You can, of course, buy a local domain, for example, a .co.uk for the UK, etc.
I typically buy .com, dot.co.uk, and a.org whenever I buy domains because it just gives me that many options and protects them.
3. Apply For a Trademark
It's important to protect your business name and/or logo by way of applying for a trademark.
Head over to the Intellectual Property Office website and do a search for the name of your business.
You can search for existing trademarks by word, phrase, or image.
A simple search will immediately tell you if there exists already somebody else who has a trademark in that particular name.
This is absolutely important that you do this even before you've launched your business.
It helps you prevent the possibility of someone else saying you're infringing or trading in a name they already trademarked.
If this happens, it can get pretty costly and stressful, so it's best to prevent that from happening.
It's a very simple process to get your trademark registered.
It takes about four months from the point at which you apply.
When you apply, you can use the trademark symbol ™ at the top of your particular business name to show it is pending approval.
Then when you get approved, you can use the symbol ® to show you have an approved and protected trademark.
You can do the trademark application yourself or use a trademark lawyer.
I used a trademark lawyer for The Humble Penny and for subsequent brands, I've done it myself.
You can also do a trademark for either the UK (or your country) or a global one. I'd suggest starting with the country of trading first.
Start with that trademark search first and get started with the process of registering your trademark before you start your business.
Note that it's not compulsory to apply for a trademark before you start.
It's just sensible to do so if you can and in addition, it makes your future business more valuable too.
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4. Open a Bank Account
You will not believe how many people just start a business without actually having set up a bank account in order for them to get paid.
One way you can do this is open a conventional bank account.
When we started, we opened one at Barclays Bank, for example.
But there are many other challenger banks like Starling bank, etc to consider.
Alternatively, if you're running an online business, I highly recommend opening an account with Stripe.
I find them to be the best from a fees/cost and service perspective.
An alternative to that is to open an account with PayPal.
Many people around the world particularly people in third-world countries have access to PayPal and use it as their preferred method of payment.
So having PayPal as an alternative payment method will help you collect payments in a variety of ways from prospective customers.
It's worth mentioning that PayPal is more expensive than Stripe from my personal experience.
You can then link these digital bank accounts to more traditional accounts and have your business cash transferred from one to the other periodically.
5. Work On Your Branding
Branding is everything, especially in a more digital age.
You can have all the ideas but if you don't get the branding right, your business is highly unlikely to take off.
By branding I mean the key elements:
- The look and feel,
- Key messaging,
- Your tagline,
- Colours
- Fonts, etc
You want to make sure that you do not do all of this by yourself.
I recommend that you hire someone more creative who has the skills to help you bring your branding ideas to reality.
You can find a freelancer on websites like Upwork.
As you launch your business over time, that brand development carries on as you start to see that brand interact with your ideal customers.
Over time, improve things as your business grows.
6. Create a Business Email Address
This just gives you so much legitimacy.
The easy way to create a business email address is to approach the website host provider for your business.
They typically have a personalised email address service that's usually bundled together with your website, domain, and hosting package.
I'd suggest setting up a couple of professional email addresses.
This will take you very far when you start to apply for various things online.
Particularly if you are somebody who's running an online business.
e.g. when you come to apply for various supply services or apply to open an online bank account and things like that.
You're more likely to be approved for lots of things if they can see that you are a proper business.
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7. Track Your Expenses By Bookkeeping
A lot of small business owners have absolutely no idea how much they're making and spending monthly.
That's because they do not track their income and expenses.
Many feel that it is such a technical thing, when in fact this has become so easy today, thanks to technology.
What I'm talking about here is cloud-based bookkeeping.
As I run an online business, every expense related to our business is tracked.
Everything from me spending money on the equipment that I'm using to run this blog or me buying specific clothing to film YouTube videos.
Doing this helps to separate business expenses from personal expenses.
Business expenses are those that are wholly and exclusively for business purposes.
Tracking business income and expense is also critical to understanding your business performance i.e. how profitable it is.
I use a cloud accounting software called Xero.
There are many others like QuickBooks and Sage that you can use as well.
However, I have a personal monthly experience with using Xero and it's super intuitive and simple to use.
Plus, it's made for non-accountants.
So if you're daunted by numbers, this is so easy and ideal to use.
Once set up with rules, all you're doing is using a smartphone and simply reconciling your expenses and incomes by clicking buttons on your phone.
It really is that simple and I can guarantee you this will transform your business life if you get it right from the get-go.
8. Get a Registered Office Address
You might be thinking, why do I need one of those now?
Let's use the example of an online business.
If you run an online business, you're going to be emailing subscribers and potential customers.
To do this, you absolutely need a registered email address at the bottom of every single email that you send out.
This is tied to anti-spam laws that require you to have a registered address.
You can have one by paying for a P O Box address.
However, there is a simple hack to avoid paying.
If you've got a supplier of services like an accountant, or a solicitor, they usually offer their offices as a Registered Office for free, provided you're a client.
This will help you save money as a new business owner.
Another reason a business address is critical is tied to when you start to apply for things as a business.
They will ask you, what your Registered Office address is.
In fact, everything you apply for pretty much will want to know that you're a legitimate business e.g. opening a business bank account.
In many cases, that particular address will be checked to make sure that it's a legitimate address.
It goes without saying, do not use your personal home address as your registered office address as it could end up on the internet.
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9. Create An Effective Marketing Plan
In today's world, there is no way you can achieve success in business without an effective marketing plan.
A marketing plan is your intention for how you're going to market your business, products, and services to your ideal customer.
I.e. what sort of marketing methods or channels will you use?
Will you be promoting it via your organic content vs paid ads?
Or will you be writing blog posts? Creating YouTube videos?
You need to choose one preferred method and focus on it.
The method you choose will need to depend on where your ideal customer congregates.
I suggest creating a simplistic marketing plan on a sheet of A4 with a focus on knowing what your intended marketing plan is.
Then as you launch that business, you start to see that marketing plan get to work.
You can gradually start to tweak it depending on what you see as effective ways for you to market your business on an ongoing basis.
But having that marketing plan right at the very beginning will set you apart from many people who start with absolutely no clue how to attract customers.
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10. Register To Pay Tax With HMRC
The final step is for you to register with a taxman.
When you start a business, you've got to pay business taxes.
In the UK, we refer to that as corporation tax, which is paid of profits.
You might be making losses from the start because you're incurring expenses to start your business.
However, it's very good to set yourself up for success and one way you to do that is to get your taxes right from the beginning.
Simply contact the tax office and mention to them that you've registered your business and they will send you a Unique Tax Identifier code.
This helps you to identify your business whenever you interact with a tax office and have to pay your taxes on an annual basis.
Conclusion On How To Start a Business UK
Starting your own business can feel daunting but I hope these 10 steps have helped to make it much easier for you.
If you apply all the steps that I shared, you will without a doubt find yourself starting a business in the proper way.
They'll help you to build the right foundations, put in place the right processes, systems, and controls, and prepare you for success.
Feel free to join me and other like-minded inidividual of inside of our community at Financial Joy Academy where we share all you need to create a highly successful online business.
Frequently Asked Questions On How To Start a Business UK
How do I start a small business UK?
- Find a business idea.
- Write a one-page business plan.
- Test the idea for demand.
- Identify your ideal customer.
- Register as a Sole Trader or Limited Company.
- Pre-sell the idea to raise money.
- Create your product or service.
- Market your product or service.
- Open a business bank account.
- Create a sales system.
- Track income and expenses by bookkeeping
- Register to pay taxes.
How can I start my own business with no money?
- Find a business idea that already works
- Understand how that idea makes money
- Decide on how much time or money you can commit.
- Test the idea to see if there is demand in your area.
- Identify your ideal customer.
- Register as a Sole Trader or Limited Company.
- Pre-sell the idea to raise money.
- Create the product or service.
- Put together a 2-page marketing plan.
- Open a business bank account.
- Join a community of like-minded people to learn from.
- Create a simple sales system.
- Start bookkeeping
- Contact the tax office and register for corporation tax.
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