Many people think that owning a business is the path to financial independence and freedom. While it may be true that you no longer have to punch a clock, being an entrepreneur comes with other types of headaches ever since the beginning. Starting a business is not a piece of cake, which is why we want to shed some light on the entire process to guide you in your journey to entrepreneurship.
First of all, starting a company in the UK requires you to inform the HMRC that you will become unemployed. This is done online or by phone. You could take their free online course about record keeping and filing tax returns. It will make your life easier once you have the business.
Make it happen
Write a business plan. You can do it on your own or you can hire someone to do it for you. After all is laid out, you have to choose a business location keeping in mind what services you will be providing or what you will be selling. Determine if you could work from a home office or you need additional space for storage and/or showrooms.
Next, it’s time to find financing for your business. There are government backed loans or research grants to get your started. You could also turn to regular banks for small business loans.
Register the business
When registering your business, you will have to choose the best legal structure for your business: sole trader or limited company. If you go with sole trader, you will be responsible for the debts of your business whereas in limited companies, finances are separate from personal finances. This comes, however, with more reporting and management responsibilities.
There is a third option: you can register a partnership if there are at least 2 co-owners. You will both share the responsibility for the debts of your business. The partners also have accounting responsibilities. You could hire a consultant to learn more information about what’s best for your case.
Now, you should choose a name. This part is a bit tricky because you have to find one that’s still available. You can check its availability on the Companies House website. You will also have to open a business back account because it’s a separate legal entity. You can’t just use your own.
Regulations and insurance
Depending on the niche you’ll work in, the business must comply with industry regulations. For example, if you own a restaurant you have to learn about food safety and liquor licenses. If you own a small plumbing industry, you have to get your plumbing license, and so on. Learn what papers you need to function within the law.
After that, you have to choose the right insurance for your industry branch. A specialist broker could help you get the right niche insurance. Not getting insurance is unwise especially if your business has assets that are easily damaged, like company cars for example. You could also get a policy for the actual physical space your business is located in to be covered in case of natural disasters.