Thanks to the UK’s vibrant startup ecosystem and business-friendly regulatory environment, more and more business owners realise that launching a company can be a relatively simple procedure.
However, even though registering is a crucial step in getting started, it doesn’t ensure success. Only 40% of companies survive over the first three years because launching a profitable business demands thorough planning and preparation.
In this guide, we set out a thorough step-by-step process that teaches you how to launch a business from scratch and set yourself up for the highest chance of short-term and long-term success.
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Steps to set up your startup
Follow our checklist below to start your startup in the UK.
1. Register business name
Choosing a name for your business is a necessary first step since it reflects the character of your brand and makes you stand out.
It’s time to get creative with your name, which should be distinctive and appeal to your target market.
It’s also important to remember:
- how to establish a brand to differentiate from the competition
- what steps to follow to protect intellectual property, including all registered trademarks and patents
2. Choose a legal structure
The next step is to decide on the legislative structure for your company:
Sole trader: It is a simple business structure, but without any legal distinction between you and your company.
Partnership: This structure is used if you’re opening a company with a business partner or partners.
Limited company: It is a complex structure, and your company is legally distinct from you as an individual.
3. Secure funding and finance
How many funds do you need to set up a business? Depending on your product, this could vary, and you must evaluate this before starting your new business.
If you’re starting small, you might not need a significant initial investment. But if you’ve identified numerous expenses in your budget, you should know how you will finance your project. Remember that you might be able to find grants for startups to help lighten the financial burden.
It is essential to look into government support for startup companies. Another government-backed system is the Startup Loan, accessible from the British Business Bank. You can borrow up to £25,000 at a fixed interest rate of 6%/year. You will also be eligible for 12 months of free mentoring.
Another cutting-edge method of raising money is crowdfunding. Furthermore, if you’re a young person looking to set up a business, it’s worth checking out the Prince’s Trust, which provides mentoring – and sometimes, financing.
Check these 5 Capital raising strategies for EdTech startups.
4. Obtain a licence or permit
You might need a licence or permit to conduct business legally in the UK. This is likely the case if your company belongs to any of the following groups:
- Alcohol or tobacco retail
- Food retail
- Taxiing
- Sports coaching
- Farming
- Child care
- Restaurants
- Manufacturing
- Waste management
The first goal is to identify what kind of licence you require. The Licence Finder on GOV.UK can help you with this. This tool will also assist you in finding the correct point of contact within your local authority.
Your licence cost will depend on the type you’re applying for and any additional charges. You might also have to demonstrate an accredited qualification to be granted a licence or permit.
5. Set up financial tools
You must have adequate capital to begin with, but it is also crucial that you track and manage money well in the future.
This is especially true in the current environment, where financial assistance from the government is frequently offered and taken away. Many businesses have taken out loans, so you must ensure your repayment strategy is clear-cut and achievable.
Consider subscribing to an accounting software as it will assist you in managing and recording the day-to-day financial transactions of your company, including fixed asset management, revenue and expense management, accounts receivable, accounts payable, reporting and analytics.
You can also hire an accountant for a startup business to manage your books and keep them up to date.
6. Prepare your advertising campaign
After you’ve managed your finances, it’s essential to consider how you’ll draw clients and expand your audience reach.
When it comes to advertising a startup, you’ll need to consider marketing, branding, and how you’ll balance digital and offline promotion.
Here are some of our top suggestions:
Do a competitor analysis: Competitor analysis helps to evaluate the market, set your prices, and figure out a way to stand out.
Develop a social media presence: With technological advancement, you can use social media to communicate with customers, display your brand’s personality, and even sell your products and services.
Build a website using SEO: Optimising your website for search engines will help visitors locate your company and understand your services or products.
When should I hire someone?
Employers must set up a company pension and register with PAYE to hire someone. Employers must make PAYE, national insurance and pension contributions, so deciding if you can afford to hire someone before employing them is essential.
If you’re launching an IT-related firm hiring a tech startup accountant London, can assist you in testing your concept and making credible revenue forecasts.
If you can’t afford to hire accountants for tech startups, you can still use their services as a consultant or volunteer.
Whatever strategy you decide on, it’s critical to have the proper contracts with your employees or consultants to protect your confidential information and preserve your intellectual property.
Final thoughts
Setting up a business is often a long process, but that doesn’t mean it has to be complicated. Carefully think about what you’d like to do, study how your idea could perform, and then write a detailed plan to prove to others why your business is destined for success.
Most importantly, ensure you have someone to talk to frequently about your business. There will be good and sometimes bad days when your motivation starts to wane. Find a decent mentor, a business advisor, or other people in your position so that you can discuss the difficulties and successes that come ahead.
