You have a business idea, but do you know how to implement it? Having a business idea and starting a business are two milestones with a distance between them, from company registration to business planning, fundraising, and much more.
This guide will tell step-by-step on you how to start a startup.
Table of contents
11 Steps to start a startup
If you are wondering about how to start up a business, here are a few steps you can consider.
1. Evaluating yourself
Before starting a business, ensure you carefully examine your business thoughts and ideas. For these, focus on your strengths, weaknesses and skills that will allow you to think about what you do the best and what you don’t. A SWOT analysis will be handy.
For example, a person with an expert level of programming skills can start a web development agency and not a law firm.
Understanding yourself will help you to narrow down business ideas to one.
2. Come up with a business idea
Settling down with one business idea can be difficult when you have several on the list. Find out the areas where your specific idea can help consumers solve significant problems or where you can provide a better solution regarding efficiency, innovation or cost.
Furthermore, look into areas where you can be cheaper than other businesses and let customers save. One essential thing to consider is whether your business will exist in the future or collapse soon.
Check our guide on: What is a business model & how do I build one?
3. Write a business plan
You must have a business plan for different audiences, including investors, partners, and stakeholders. It is a strategic representation of your business idea outlining your key objectives, legal structure, financials, marketing and operational aspects, potential customers, market, products and services, etc.
Check our short guide on: 5 Steps to prepare your business plan for next year.
4. Select your structure and register your business
1. Sole traders
Sole traders are the one who owns, runs, and is fully responsible for their business. They can keep all profits after paying tax; alternatively, they are personally accountable for any loss in business. You can start trading with your name or choose another for your business, but you don’t need to register your business name.
2. Limited company
Unlimited company has a complex legal structure with plenty of admins, and your business is legally different from yours as an individual. Plus, you must have separate personal and business finances and a registered business name.
Check our guide on: Sole Trader vs Limited Company
It is a business structure where two or more people run a business together and share responsibilities for any losses your business makes and bills. You must choose a name and a nominated partner to register the company with HMRC.
|Sole Trader||Limited Company||Partnership|
|Be your own boss||✔||✔||✔|
|Easy and quick set up process||✔||✔||✔|
|Work with a verity of clients||✔||✔||✔|
|Add new partners or shareholders||✘||✔||✘|
|Incorporate a company||✘||✔||✘|
|Pay yourself a combination of dividends & salary||✘||✔||✘|
|Pay corporation tax||✘||✔||✘|
|The benefit of limited liability||✘||✔||✔|
|Work with the majority of recruitment agencies to source assignments||✘||✔||✔|
5. Secure finance
When you look for how to build a startup, consider your finances. You don’t need huge investments if you are starting a small business.
Know your startup cost and create a budget that helps you estimate funds or business loans you may need to start your business successfully. A significant hurdle here is how to find investors for startups.
You can apply for a government-backed startup scheme of £500 to £25,000 and receive free support on writing business plans and 12 months of mentoring. Crowdfunding can also be a great way to collect funds.
Check our guide on: How to Pitch Your Business Idea to Investors?
6. Look into additional rules for business
- You need a license for some business activities.
- You must buy business insurances as required by law, such as employers liability insurance, personal indemnity insurance, commercial property insurance, liability insurance and others
There are specific rules for businesses
- selling goods online,
- buying and selling goods from abroad, and
- storing or using personal information.
Ensure you learn all the rules before getting involved in how to start a start up.
7. Select your work location
You can work from home and commercial property by renting on purchasing.
If you are running a business from home, you need permission from a mortgage provider or landlord, a local planning office and a local council. Plus, you need business insurance which cannot be your home insurance. Such business owners may pay business rates on the part of the property used for official purposes.
While renting or purchasing a property for business, you must conduct a health and safety risk assessment and look for reasonable temperature, enough space, toilet facilities, drinking water and safety equipment. Plus, you must pay for business rates, except for small businesses that can apply for discounts.
8. Plan advertising strategy
Ask an expert on how to create a startup, and they will suggest everything to you, but focus on advertising. It is the medium to reach your potential customers. We now shift our primary focus from traditional billboards, prints, and media strategies to social media posts, SEO tactics, and others.
A marketing plan includes establishing a brand identity to stand out from the competition, create good customer relationships and build loyalty. It increases your visibility to attract new customers, retain old customers and strengthen your company’s reputation.
9. Recruit team
You need human resources in any business, from manufacturing, production, and selling, to accounting and customer support. But, employing them increases your responsibility of maintaining employee records and focusing on the payroll.
You must surround yourself with the right people, including essential business advisors like attorneys, accountants, Insurance professionals and bankers. Building the right team is crucial in the initial years of a startup, so carefully select your co-founders, contractors and initial employees.
10. Understand your tax obligations
Regardless of business size, you must pay taxes on your income above the tax-free allowances in the country.
Ask your tax advisor to legally reduce the tax bills by looking for eligibility for tax deductions and reliefs. Also, understand what taxes you must pay when submitting tax returns.
Check our guide on: corporation tax for startup
11. Adopt systems to keep business records
You can hire or outsource your accounting needs or get accounting software to keep track of business records. They keep you safe at times of taxes and audits.
This data is necessary for creating financial reports that help you understand your financial health and opportunities for future success.
Ask our startup accountants in London on how to setup up a business in the UK to understand all the steps and complete the entire process smoothly. A company must follow the regulations of a country, abide by laws, and pay taxes to avoid penalties and affecting its brand reputation.