So, you’ve got a germ of an idea and now you want a business to bloom… but you have no idea where to begin.
The good news is the internet is making it much simpler for people to sell their goods or offer their services, so why not see if you can turn your favourite pastime into a profitable little business opportunity?
We’ve complied this quick guide to show you the most important things you should do first if you plan to set up a new business.
Write your business plan
If you don’t have a clear plan of what your hopes are for your business, don’t expect anyone else to! Every company should create a business plan, in which you should clearly outline your vision, goals and how you will measure your progress.
For example, you need to consider where you would like your company to be in a month, a year or even five years? The things you should include in your business plan are:
- Market – who your competitors are, what your share of the market is and who your customers are.
- Sales – what are your prices and how you will promote your service or products.
- Staff – how many people you will employ and how they will be managed.
- Operations – what premises and equipment you will have.
- Finances – provide forecasts for up to five years of turnover and profits.
Choose a company name
A vital aspect of starting a new business is its name! The name you choose needs to stand the test of time and don’t forget, you might have to say it on the phone when you answer a customer!
It’s important that you pick a name that reflects the business well and could hint at the services or products you provide.
The general rule for a company name is short and sweet! Is your intended name easy to spell? You also need to check that your chosen name is not like an existing brand as that could cause lots of confusion, especially if you are offering the same goods.
Create a website
After deciding on what name your business will have, it’s time to set up a website! Ensure that your business name has a matching domain that you can register, and choose a hosting package that can withstand a relatively large volume of traffic and offers enough storage space.
Your website is your online home when it comes to retailing online, so you might want to invest in a custom design. However, many start-ups opt for a simple WordPress theme to get started and invest in the custom option once the business has begun to generate enough income to warrant it.
Register with HMRC
It is imperative that you register as self-employed with HMRC. After all, you don’t want the taxman chasing you for large sums of your hard-earned cash when you least expect it. This can be done easily online now, and ensures you can save the right amount of tax as well as keep a track of the class 2 and/or 4 contributions you should make towards national insurance each financial year.
You should clarify whether you are a sole trader, partnership or limited company. Remember that if fail to register your business within the first three months of trading, you could face a large fine.
Get your finances in order
When you decide to go it alone with your own business, it’s essential to keep records of your income and expenditure. At the end of the tax year you’ll be the one responsible for submitting this information to HMRC, so you’ll need to know exactly how much was spent on what.
It’s important to note, that the taxman may choose to investigate your tax return after you submit it.
Paying an accountant to do your books is an excellent idea as it takes much of the pressure off you – and allows you to get on with the more interesting part – running the business!
Many new business start by finding an accountant to take care of their finances. However, if you have time, you can buy accounting software, which would enable you to keep a track of how your business is doing and save you the cost of paying an accountant.
Many new businesses struggle to make a profit for a long while as they often need cash for equipment such as new computers or printers.
But help is on hand as the government does offer small grants for new businesses with a good business plan. You could apply for a New Enterprise Allowance, if you currently receive benefits but want to start your own business.
Taking on staff
Once your business starts to get moving, you may find you need a bigger office… or even some staff!
HMRC provides a checklist which could help you with things like pay, to ensure you are paying the minimum wage and that you have a workplace pension scheme in place.
Starting up your own company doesn’t need to be frustrating. A little bit of hard work at the start will pay off in the end – hopefully, with you running a profitable company!