Are you thinking about finally embracing your inner entrepreneur and starting a business in the UK? Now’s the time to do it. Alongside having one of the world’s strongest economies, the UK is experiencing its strongest startup boom in a decade.
It might surprise you that absolutely anyone can start a business in the UK regardless of nationality or immigration status. So wherever you’re from, you have the opportunity to get your business off the ground in Britain, and you won’t be alone — last year saw the number of new companies increase by 14%.
But before you can start making money from your new business, there are some things you’ll need to do. We’ve put together this six-step guide to help you put everything in place to get your business set up for success.
Step 1: Business Idea
If you’re thinking about starting a new business, then you probably have a business idea or two up your sleeve. If you don’t, but you’re eager to find one, here are a few ways you can start generating ideas:
- Find a way to solve a common (or niche) problem
- Use your skill set
- Look at international markets and find gaps locally.
Once you’ve come up with a few different options, you should sanity check them to see if they have the potential for success. According to a recent study by CB Insights, a lack of market for a business and a flawed business model are two of the top reasons startups fail.
Before you decide on a business idea, do your research and determine if there is a market for your business and see how much competition you’re likely to have. If your business idea passes the sanity checks, then you can start to think about your business name.
Step 2: Business Name
If you’ve been dreaming of opening a business for a while, you’ve likely got a business name or two in mind. But even if you’ve already thought of a name for your business, it’s wise to brainstorm some more ideas as often another company will already be using the name. To come up with name options, consider the following:
- What exactly does your business do?
- What do your customers get from your company?
- Are you able to describe your business in a word or two?
- Do any other companies have the same or a similar name?
- Is the web domain available for that name?
- Does your business name follow Companies House rules?
Before deciding on a business name, try out a few options for size. Ask your family and friends what they think about the different options and design some rudimentary logos to see how you feel about them. The last thing you want is to start a business and create marketing materials to realise you don’t like the name.
Step 3: Business Plan
With a business name and plan decided, you’ll need to deep dive into the details of how your business will run and how it will succeed. To do this, you’ll need to create a business plan. Your business plan will give you an overview of what your business does, how it will do it and how it will beat competitors.
Before you start writing your business plan, you’ll need to decide on your company’s legal structure. The legal structure determines how your business operates and pays tax. While there are several structures to choose from, including sole traders and partnerships, most new businesses choose to form a private limited company.
New entrepreneurs will often create lengthy business plans, but your business plan doesn’t need to be a massive document. While you should include as much detail as possible, you should be as succinct as possible. Your plan should include the following:
- Executive summary — a concise description of your business objectives
- Business scope — a detailed summary of how your business meets a demand in the marketplace
- Business model — an overview of how your business’s services or products deliver value to customers
- Competitor and market analysis — Evidence that your business has potential for future growth
- Operational plan — In-depth details of how your business will operate and who will be responsible for certain aspects of the company
- Finances — a detailed financial plan that includes funding, cash flow projections and income
Do your best to include as much detail as possible in your business plan and ensure that you follow it when you start running your business. It’s also worth revisiting your business plan regularly and updating it — banks will need an up to date business plan for business loans.
Step 5: Registered Business Address
Regardless of the type of business you plan to form or where you’re based globally, you’ll need a UK address to register your business with Companies House. If you’re based in the UK, it’s possible to use your home address or your office address (if you have one). If you’re based outside of the UK, there are a few options available:
- Rent office space in the UK
- Use a friend or family member’s address (with their permission)
- Get a virtual office address
Of the options, a virtual office address is probably the best. It’s an excellent option for both residents and non-residents of the UK. Essentially, a virtual office address is a postal address in a building owned by a separate company.
Often these addresses are in prestigious parts of London, which means that when you list your business in directories like Google My Business, your address will look professional. Virtual office addresses are a good option if you’re based in the UK, too, as they allow you to keep your home address private if you run a home-based business.
Step 6: Companies House And HMRC Registration
Once you’ve followed the previous five steps, you’re almost ready to take the business world by storm. But before you can do that, you’ll need to register your business with HM Revenue and Customs (HMRC) and Companies House — the UK’s business registrar.
The process of registering a business in the UK is no different for residents and non-residents, and it’s relatively straightforward. You’ll need to supply Companies House with the following information about your business:
- Company name
- Registered office address
- Information about shareholders
- Director information
- Formation documents
The registration process is relatively quick, but it can be daunting if it’s your first time registering a company. If you need help processing your registration, it’s a good idea to seek out a company formation agent who will register your business for you.
You’ll need to register for self-assessment tax with HMRC following your registration. They will issue you with a Unique Taxpayer Reference, and it will be your responsibility to ensure that you pay the correct amount of tax. Again, this can be daunting if this is a new experience for you, so it’s worth considering an accountant.
Once your registrations are complete, you are ready for your business to lift off and take the world by storm.