How to start your business in the UK? 12 effective steps

12 easy steps to setting up your business in the UK

1. Find your business idea

This is the first step to starting your business. Nobody starts on a journey without having a destination in mind, else they are going nowhere fast. There are ideas and there are ideas. 

As intriguing as starting your personal business sounds though, not all business ideas are marketable. This is evidenced by the fact that more than half of business startups fail before they can make their big breaks. Most often, it is not due to a lack of funds but to improper planning and executions.

Making these statements is not to discourage you. Rather, they are to help you know that getting an idea alone is not enough to establish the business. How then do you ensure that your business idea yields the right fruit?

1. Research the idea. Know what the market is for that idea before you start out. 
2. Find your niche. Knowing who your competitors are is a very good way to know if there is something you can do to create a niche for your business. Amazon is not the only retail company but it has carved out a niche for itself that others are trying to catch up to. Apple is one of many tech companies but it is serving just a select few who are concerned about class. What this means is that your business idea must have a niche it is targeting.
3. Understand your target audience. It is not enough to have an idea and know who your target audience is and what drives them. If you are targeting the high-class strata of society, creating a business that seems too cheap will not help your business.
4. Get the right archetype and colour schemes. This is most important when creating advertisements and websites. We will talk about them later in the article.

2. Choose a legal structure

There are four broad legal structures for businesses in the UK.

1. Sole proprietorship or sole trader – this is good for small businesses and freelancers.
2. Business partnership – this involves two people or businesses going into a partnership
3. Limited liability companies – this could either be privately owned or public, and it could also be limited by shares or guarantees. Charities, clubs, cooperative societies, and some law firms register using this structure.
4. Limited liability partnership – this is run like a business partnership with the exception that it is registered with the Companies House instead of the HMRC like a business partnership. It is also limited by shares, unlike business partnerships where partners just come up with starting capital.
    

3. Register your business name

It will interest you to know that registering a business in the UK costs only £12 and may only increase if you are registering through a third party. It is very important to know that registering a business name is so that someone else will not use the name while you are still strategizing the business.

The registration process, however, depends on the legal structure you have chosen. Sole proprietorship and business partnership are registered with the HMRC through the Self-Assessment portal to pay tax while the Limited liability company and partnership are registered through the Companies (company incorporation). The LLC and LLP must also register with the HMRC during or after incorporation to pay corporation tax.

4. Write your business plan

As hinted earlier, the best way to get your business idea on the right track is to have a workable business plan and stick to it. Writing a business plan should also involve setting realistic budgets and timelines. Being too hasty or slow may be detrimental. Always set yourself at a realistic pace.

5. Secure financing to fund your business

There are several ways by which entrepreneurs found businesses and there are businesses that could start without zero funds, such as freelancing your skills online and offline. All you need are your tools and skills. The following are ways to finance your business – 

1. Personal funding
2. Family and friends
3. Trust fund
4. Loans from financial institutions
5. Grants
6. Shares from shareholders
7. Customers
8. Venture capitalists
9. Angel Investors

Deciding on which to use depends on the type of business and how huge the starting capital will be. If you have created a good plan with a realistic budget, knowing which funding source to use will be easy.

6. Plan your marketing strategy

One reason why a startup may fail is a bad or inadequate marketing strategy. You can do this on your own or find a marketing agency to do it for you. The most important thing is to develop a marketing strategy that works. There are many platforms to use, ranging from social media adverts to using influencers and traditional adverts on TVs, billboards, and flyers.

7. Open a business bank account

Having a separate bank account for your business is a good way to ensure your tax accounting is done properly and without stress. It is easier to know how funds go in and out of your business and your account books can be well managed.

8. Buy a business insurance

Buying insurance for your business is an important strategy to attract investors. When your business is insured, investors know that their investments would be protected even if the business goes under for any reason.

Scout around for good insurance companies and check that their offers and terms are satisfactory.

9. Get state tax ID numbers

As mentioned earlier, all businesses in the UK must be registered with the HMRC to pay tax through Self-Assessment or Corporation tax. Whichever way you are paying tax, you will be given a Unique Taxpayer Reference number (UTR) which you will use to pay tax to the HMRC.

If you are unsure where you can find your UTR number, simply check through any correspondence you have received from the HMRC in the past. The UTR number is how HMRC identifies businesses in the UK and will always be part of any document they sent to you.

10. Choose your tools and software

After all, is said and done, the quality of the tools and softwares you use to deliver your services to customers will determine your success level. If you use subpar tools, it does not matter your skill levels or experience, you will not be able to deliver top-notch jobs that will keep your clients coming back.

For example, if you are setting up a retail online shop, you want to make sure that your website is very easy to navigate with easier checking out options for all kinds of people. The moment people find it difficult to find their way around your website, they will not come back. The website should be so easy that a child can navigate it.

11. Build your team

If you have started your business as a sole trader, once you have the stage set, it is time to start building a team. The best way to grow your business is to have the right set of people working for you. This way, you put your time and effort into growing the business instead of attending to each customer personally. You can start small and upscale as the business grows.

12. Market your business

There are many strategies for marketing a business. From cold mail to social media adverts, the list is endless. Most of these options will not break your bank account if you plan them well. 

Also, knowing the character archetype of your target audience as well as the colour scheme that appeals to them will help you in creating adverts and even designing your website. For example, you cannot use a red and black colour scheme for a business that is targeting the innocent archetype. Make sure you have researched well before your start marketing your business.

 Conclusion

Starting a business starts with a good plan which must be well executed. With the right ideas, you can change the face of an existing business niche just like Facebook and Amazon. All you need is to start out with a well-thought-out strategy.