How to start your own business
Are you sick of working for someone else? Are you restricted in your employment and find that your ideas are not taken into account? Do you have your own plans for a business but do not know where to start? Do you know how to write a business plan or what kind of taxes you need to pay? Here is our guide on how you leave employment behind and set up on your own.
Coming up with your business idea
When starting out it is important to explore as many options and ideas as possible before you settle on one. Start by thinking about what problems you can solve for prospective customers and how you would do so. Many successful companies start out with a mission to solve a problem that millions of people are passionate about and provide a solution through their product or service. You can also look at areas where solutions are already available, but you can do it better. Check out how to come up with a business idea.
Research your business idea
Research is a vital part of setting up your business. You need to research similar companies, do research on your potential customers, and conduct extensive market research on your product or service if you can. If there is no demand for your product or if there is a gluttony of other companies that offer the same service, then your company is starting off on the back foot making it difficult to achieve success.
Create a business plan
A business plan is a great way to sort out your thoughts and ideas and plan your business in a more structured way. This helps you prepare for the future, know how much funding you need, and assess whether your company is feasible. You can also present this to outside parties such as investors, partners, or shareholders.
Registering a business
Your specific needs when registering your business depend on the type of structure you decide on. You can operate as a sole trader, limited company (private or public), partnership, or limited partnership. There is no simple way to pick the best structure for your business because it depends on your business operation and needs. If you plan on growing your business beyond just yourself and then selling it on, then a private limited company is probably for you. However, if you only want to operate as a one-person business for the foreseeable future then a sole tradership would be the best structure for you.
Setting up finances
It is advisable for any business owner or self-employed person to open a separate business account. This ensures you keep your personal and business records separate. It is important to choose your provider carefully as they will likely be your banking provider for the entire life of the business as changing banks can be extremely complicated and costly.
You will be responsible for filing your accounts and paying various business taxes to the HMRC on an annual basis (or more regularly). Understand your taxing and financial obligations and run your business in line with these from the very start to avoid any hefty fines from HMRC.
