The Essentials to Starting a New Business
Thinking of starting your own business? Don’t actually know where to even begin? Below are all the essentials you’ll need to consider before starting your own business, with a break down of what each one means, and how you’d go about sorting it for your own business.
Business bank account
You'll need to open a business bank account as soon as you can. There are lots to choose from and some great offers out there.
Most offer free business banking for 18 months or more as with a business account you pay charges on things such as paying in money or transactions.
Check out a site called www.knowyourmoney.co.uk and research the best accounts on offer for businesses. You may need to arrange an appointment with the manager to open the account.
Starting a business without having your own website is almost inconceivable. Apart from being quick and cost-effective to create (especially if you do it yourself), even if you won’t be selling online, many prospective customers will head for your website to check out your business and products before they buy.
Firstly you'll need a website address or URL as it's known. We always use 123-reg.com which will tell you straight away if the name is available and you can buy the name for two years for a low amount of money.
You need to decide what you want the website to do. It's usually one of these:
To get the visitors contact details
To sell to the visitor (E-Commerce)
To get the visitor to call you
Don't just have a brochure website. You want the site to work for you. As a minimum you need 5 pages on your site:
- About Us
- What Clients Say
Having a well-designed, easy-to-use website that ably showcases your wares is key. There are many DIY website-creation solutions which are simple to use and can deliver impressive results.
Check out www.websitebuildertop10.com for the top ten DIY website building companies.
If the whole thing scares you to death, get a professional website designer to build it for you, especially if you want it to do some technical functions.
Registering your business
When registering a business people usually choose from two main options.
Becoming a sole trader should mean less tax-related form-filling and a lower tax bill, but you are liable for your business’s debts. To register as a sole trader (become ‘self-employed’), ring the HMRC Newly Self-Employed Helpline on 0300 200 3504. There’s no charge and you’ll be asked a few simple questions about yourself and your new business. Alternatively, you can register online.
Forming a limited company removes that personal liability, but there’s a charge and there’ll be additional reporting and management responsibilities. You can set up partnerships with other people, formally or informally.
If you start working for yourself, you’re classed as a self-employed sole trader- even if you’ve not yet told HM Revenue and Customs (HMRC).
As a sole trader, you run your own business as an individual. You can keep all your business’s profits after you’ve paid tax on them.
You can employ staff. ‘Sole trader’ means you’re responsible for the business, not that you have to work alone.
You’re personally responsible for any losses your business makes.
You can find out more from HMRC about how to set up as a sole trade here.
send a Self Assessment tax return every year
pay Income Tax on the profits your business makes
pay National Insurance
You must also register for VAT if you expect your takings to be more than £83,000 a year.
A limited company is an organisation that you can set up to run your business - it’s responsible in its own right for everything it does and its finances are separate to your personal finances.
Any profit it makes is owned by the company, after it pays Corporation Tax. The company can then share its profits.
Every limited company has ‘members’ - the people or organisations who own shares in the company.
Directors are responsible for running the company. Directors often own shares, but they don’t have to.
If you enjoyed this article, take a look at the following blog posts we have on starting your own business:
- Raising Finances for your New Business
- Starting Your Own Business: Types of Company
- Branding Your New Business
- The Essentials to Starting a New Business