8 Steps to Consider When Starting a Business

posted by 1 year ago in Tips
8 Steps to Consider When Starting a Business

Having an idea may seem like it is enough to start a business, but it is much more complex than just an idea. There are a million and one things to consider when starting a business so we have summed up the key points in 8 useful steps.

Step 1:

Have your business plan finalised, remember to consider this may be required for any finance you may need. Writing down a business plan is a good way to clarify your thinking and identifies how and when you intend to meet your objectives.

Step 2:

Sensibly forecast how you are going to finance your business. What effect will it have on your personal finances? Are you eligible for any grants? Will you need to apply for finance? How long can you sustain your business before it needs to make a profit?

Step 3:

Decide on a business name and the structure then register your business. Most businesses register as a sole trader, partnership or Limited company.

Sole trader: Simple set up but you’re personally responsible for your businesses debts.

Partnership: When 2 or more people run a business together, sharing responsibility for any business debts.

Limited Co: The business finances are kept separate from Directors personal finances but there are more reporting and management responsibilities.

Step 4:

Research and obtain any regulation, licence or permits you may require before trading. Additionally, implement and maintain Data Protection procedures if you are planning on holding customer information.

Step 5:

Research and obtain any insurances that may be required, some types of business insurance is required by law.

Employers liability: If you employ any staff this is a legal requirement to cover the cost of compensating employees who may be injured or become ill through work.

Motor Insurance: If your business uses vehicles, commercial motor insurance is a legal requirement.

Liability insurance: Can cover the cost of compensation claims following fault or negligence against you or your business. Types of liability insurance include public liability, product liability, professional indemnity and Directors and Officers liability.

Step 6:

If you are taking on employees, there are a whole host of obligations you will need to fulfil. It may be worth obtaining professional advice to ensure all obligations are correctly met as many are legal requirements. For example, you will need to ensure somebody has the legal right to work in the UK, have adequate insurance, health and safety procedures, register with HMRC etc.

Step 7:

Ensure you have adopted adequate administration and reporting procedures. It is vital that accurate accounting records are taken in order to pay tax and national insurance. If you are running a Limited company, corporation tax is levied on profits. If you expect your turnover to exceed the current HMRC threshold for the year then you must register for VAT.

Step 8:

Create a sales & marketing plan – if your business, as most do, relies on attracting or retaining customers a sales plan will be of paramount importance. This may include creation of a website, branding, advertising, PR etc.