How to Start a Business in 10 Steps
Starting a business can seem a daunting task due to so much confusing information in different places. In this blog post, we’ll summarise best practice and give you a free guide to get you started on the right road.
Here is our ten-step guide to how to start a profitable business:
You have a choice of self-employed, partnership or Limited Company (we won’t cover charities or social enterprises here).
Simply, if you are going to earn less than £25k (profit) and want to keep your costs down then go self-employed. Otherwise you’ll need to register a Limited Company to save tax (and provide other benefits).
Choose a business name that means something to you and your potential clients. We chose SRK as we are putting our name to all our work and not hiding away behind a brand – one of our core principles is transparency; hence using my initials for the name! Whatever you do think long term, and get some feedback!
3) Logo and Brand
Don’t spent too long agonizing over your logo, Tim Ferris who wrote the 4-hour work week recommends using 99 designs but there are lots of Companies who will create you a logo for little money. The Brand identity is ensuring that your message is conveyed in the colour scheme, logo, communication style and it is consistent between media.
Once you have a name you’ll need to register your Company. A good accountant can do this for you to ensure you get the share structure correct and in line with your long terms plans.
4) Domain and Website
Check if available and register the domain of your business name. I would recommend purchasing the .com and the .co.uk to prevent any copycats!
A website is something we all need! Depending on budget you can use WordPress and build your own, use a freelancer, or a design agency.
5) Bank Account and Funding
Open and register a business bank account. Take your documents from step 3 and visit your favourite high street bank for a free business account. Ideally fund this account with some initial money for working capital – you’ll be able to take this back in the future tax free through the Director’s Loan Account.
Do you need any equipment? Laptops, stationary, phone contracts etc. – sort all this out at the start so you can concentrate on work from day 1.
Are you going to work from home? Or rent a shared workspace. We would recommend trialing a desk in shared workspace as the social and collaborative aspects are amazing. You meet new friends, contacts and potential clients or referral partners and get to separate work life from home life. Working from home is great (I do it on a Monday and Wednesday) but not all the time or when you are starting out!
Make sure you have insurance as appropriate, professional services firms need indemnity insurance in line with their fee income and it needs to be regularly reviewed. Check with your peers or Google what you may need.
9) Accounting & Software
This is the bit we love! Simply put you need Xero or QuickBooks Online and Receipt Bank in your life. They will save you time and give you the quality of financial reporting that many FTSE100 firms don’t have! The quality of software available today for the start up business is amazing and will allow you to set financial targets and track progress against those targets.
10) Registering for Taxes
You’ll get a letter from HMRC Corporate tax when you register the Limited Company, this will come to the registered office address. You’ll need to check the details and pass this onto your accountant.
You’ll also need to decide whether to VAT register or not (again speak to your accountant!), register a PAYE scheme (to get paid – yeah!) and get a unique personal tax reference (UTR).
Thank you for reading! Please leave any feedback and comments below.