For most UK-based start-ups setting up a business is quick, cheap and easy. In fact, it’s just about possible to set-up a business in a day! If you know what line of business you want to start, you’ve been thinking about it for ages, you’ve read the books, done the courses… then maybe now is the time to ‘do’ it?
This article is about the practicalities of how to set up a business. Follow these 7 simple steps and you could be up and running in no time:
Step 1. Let HMRC know you’re becoming self-employed
Get the right starter pack for you. You can do this all online, or by phone, and it will get you started as a sole-trader (for other legal structures see ‘part two’ below). We’d also recommend completing HMRC’s free online training which will give you straightforward practical advice on record-keeping, filling in and filing your tax return – and what to do if you take someone on.
Step 2. Sort out insurance cover
Insurance can protect you and your business against risks including accidents, sickness, theft and legal fees. The cover you need will depend on the nature of the business and how you run it. The Axa business insurance quote wizard is a good start. It will tell you which insurances you need and which you should consider. Specialist brokers can be great for niche businesses and Trade Associations often arrange big discounts for their members. If you have dependants then make sure you get life insurance in place too.
Step 3. Choose a business name
Search Google and Companies House to see if the name you want is available. If you can’t decide, go with your name for now – eg. Jane Blogs Cakes – but don’t invest in printing and brand materials until you’re sure. Buy the website domain name as soon as you’re fixed.
Step 4. Set-up a business bank account
You need a business bank account if you set up a company, as it is a separate legal entity to you. It’s not strictly required if you are a sole trader (though it’s usually recommended) – but you must keep very clear accounts.
Step 5. Get compliant
Make sure that you satisfy all regulatory issues eg. health & safety, licensing, data protection. Gov.uk has some great tools to take you through this. This only takes a few minutes and is straightforward for most start-ups.
Step 6. Start accounting for everything
Appoint an accountant or set-up your simple book-keeping system. As a minimum keep records of all sales and costs. An online accounting package could save you a lot of time and effort while keeping your records up-to-date and in great order.
Step 7. Sort out your workspace
Your Local Authority/ Council should be able to provide information about business premises and rates in your area. If working from home, make sure you understand:
- what home business expenses you can claim, including a percentage of household bills
- planning permission – if you expect regular business visitors or to employ someone who’ll be working from your home, ask your local authority planning department for advice
- if you rent, check your lease to see that home-working is allowed.
If you work online or using a laptop most of the time, you might want to check out co-working opportunities in your area, where you can rent a desk for a few hours or full-time. Co-working can be a great way of overcoming isolation and instilling routine and discipline when you’re starting.