Setting up a new business is an exciting prospect, whether you’ve done it several times before or are new to the game. With new measures to boost home-grown enterprises in the UK in recent years, the time is right to take advantage of the business climate.
While setting up a new company might seem like a simple task, there are many moving parts, and mistakes are inevitable. Nonetheless, if you have the correct information, you can take the edge off any issues that might arise. This post will cover some things that you should find helpful in your journey to become an entrepreneur in the UK.
1) Come With A Name That Reflects Your Business
The first impression of a company is provided by its name, which is why coming up with a name that reflects your business should be your first step. The name you choose will determine how others will see your venture and if they are willing to spend their money with you.
A name might seem inconsequential, but it can have far more power than you think. The name should be one that people will easily remember and associate with the company. A good name for a company should have meaning behind it.
It can be meaningful to the founders or completely irrelevant of what they are doing, but it should also make sense on some level to anyone else who hears about it.
The first step in choosing a name is to brainstorm some potential names. You may want to consider asking your friends or family what they think of your ideas. After you have brainstormed some names, you should narrow it down to at least five names that are relevant to your company’s industry, and that sound good together.
However, it doesn’t end there because you will need to check company name in the UK to see if it is available or has already been registered. It is possible to accomplish this task online with the help of tools that scour the Companies House database.
When it comes to Companies House, they are the primary government registrar of all UK-based businesses and the place where you need to register your business name.
2) Set Up A Legal Structure That Is Appropriate For The Type Of Business You Are Starting
In order to have a successful business, you have to have a legal structure. The type of legal structure you choose will depend on your goals and needs for the company. With so many options available, it can be hard to know which is right for your business.
Nevertheless, it is an essential aspect of setting things up as it will dictate numerous things, including your tax status, what is at risk if you face legal action, and much more. Furthermore, the objectives for choosing a legal structure depend on the company’s specific needs and requirements.
They usually include protection from liability, ease of management, tax efficiency, etc. In the UK, there are four main structures that you can use depending on what your business does:
- Sole trader: A sole trader is a person that carries on business for themselves and can be a sole proprietor, partnership, or self-employed individual. A sole trader is not registered as a company and does not have legal status separate from its owners. The business owner is also liable for all debts associated with the company.
- Partnership: A business partnership is a contract between two or more people to carry on a trade, profession, or industry. You can make a partnership between any number of people, but it is rare to have more than five partners.
- Limited company (Ltd): Limited company (LTD) in the UK is one of the most common business structures used for setting up a new business enterprise and is governed by the Companies Act 2006.
- Limited liability partnership (LLP): Limited liability partnerships are partnerships that have limited liability. LLPs also provide personal protection for their members, so they are not liable for the actions of other partners within the partnership.
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3) Create A Business Plan
A well-thought-out business plan will lay the foundations of your business. It will allow you to put down what your company will do on paper. Moreover, it will provide a clear, detailed roadmap for the future of the business. It can help people with their decision-making skills and also help them make more informed decisions about their company.
4) Secure Finding For Your New Venture
Unless you are in the enviable position of financing your operation from your own pocket, you will have to secure funding to get things off the ground. Start-ups always need to ensure that they have the resources necessary to get their business off the ground.
But securing financing can be difficult, especially for new companies with no track record of success. Investors want proof that the business is worth their time and money. This is where your business plan can help. You can present a realistic and honest overview of what you want to accomplish to potential investors.
5) Look For Any Relevant Insurances You May Need
In some cases, insurance is mandatory, as with employers’ liability cover. Still, in other cases, you might want to purchase other insurances that are relevant to your business. For instance, a sole trader might opt for public liability insurance, among others. You will have to assess the risks you face and decide which options will present the best value for money.
6) Get Your Accounting And Bookkeeping In Order
A new business owner needs to know the difference between what they can do themselves and what they should hire an accountant for. They also need to make sure that they know all the legal requirements for starting a business.
Accounting is the process of keeping up with the financial records of a business. Bookkeeping is just one aspect of accounting that involves keeping track of transactions and summarizing them. Both are crucial for the longevity of your new venture.
7) Learn About Your Tax Obligations
Nobody can escape the tax man for those who try; a lengthy stay at Her Majesty’s pleasure awaits you! Therefore, it is in your interest to fully understand your obligations. This job can either be done through a personal account or by yourself, but either way, you must do it.
As you can see, the process is a lot easier than you might have thought. Any mistakes made along the way could mean delays and additional costs, so it’s essential to understand the process and start early. This article provides an overview of the process and what you must know to create a successful business.