The Must-Follow Step-by-Step Guide to Starting a New Business

by Startacus Admin

Need a step-by-step guide to starting a new business? This handy guide written by Samuel Atkinson of 1st Formations will surely make for a helpful start for those looking to operate a UK based business.

When starting a new business, you have to understand that there is more to getting your business off the ground than just making sales. Long before that ever happens, there is a lot of planning and research that goes into developing the idea and establishing the company. And in between those stages, there are bureaucracies like regulations and guidelines that must be adhered to.

By completing each step below, you will be able to avoid roadblocks that most startups can’t get past. And even if you are forced to struggle with an obstacle, you will know how to overcome it.

Conducting Market Research about the Industry from Different Angles 

When researching a business idea, you have to approach it from different angles. First and foremost, you must analyse your competition. You have to ask the questions that expose their strategies:

• What marketing materials are most widely used?
• Are they capturing their audience information using landing pages, or are they building their audience using YouTube videos?
• How do the brands interact with their customers?
• What marketing channels do they use?
• How active are your competitors on social media?
•  Which social media channels cultivate the most responsive customers?

Formulating an Actionable Business Plan 

A business is not only composed of a sales department. You need a marketing team, a lead generation team, engineers if you are building applications and software, a management team to oversee lower-level employees, and financial advisors to monitor your budget.

By having a business plan, you can delegate tasks so that non-income producing activities are handled by employees. This allows you to focus on what you are good at – running your business without having to micromanage it.

Naming Your Business and Selecting the Legal Structure of Your Entity

Before you can handle the company registration process, you must choose a business name. Here's a handy guide for doing just that.

Now that you know the name of your business, the next step is to set up its legal structure and start the company registration process. The legal structure you choose to operate your business under will depend on multiple considerations, but most importantly, the level of personal liability you will maintain while operating your business. 

Sole-Proprietor 

Sole proprietors are self-employed entrepreneurs who will maintain full personal liability for all of the debts accumulated by the business. In this case, the sole proprietor is the entity, meaning they are one in the same, the government does not recognize them as separate entities, which means that the sole proprietor will claim all business income on their personal taxes.

Limited Liability Company 

Limited Liability companies offer more protection against personal liability, and they are the most preferred legal structure for an entity for startups. Limited Liability Corporations are recognized as a separate entity from the individuals. This means that the liability company files its own taxes and accounts for its own income separately from the owner operators. 

Limited Liability Partnership 

Limited liability partnerships are very similar to limited liability companies. The difference between an LLP and an LLC is that with an LLC, all partners own the business equally. With an LLP, each owner owns a percentage of the business. Their percentage represents their level of control, state of ownership, and level of liability in the business. 

Getting a Business Bank Account and Financing

Now that your business structure is established, and its name has been assigned, you can open a business bank account. With this designated account, checks issued under the business name can be cashed and business finances can remain separate from personal finances.

Without financing, the business may not be able to create prototypes, hire employees, or market to customers. The small business administration offers loans for startups, and there are also grants available, but many of them require that you are fulfilling a particular social need, like low-income housing, youth programs or senior services.

Crowdfunding has emerged as a highly effective way to attract donations and investments, and the best thing about using that method is that the money does not have to be paid back. If those options are not viable, there are always small business loans, friends and family you can borrow from, personal savings accounts, and credit cards.

Finding Suppliers for Your Physical Products

If you are in the business of selling physical goods, then researching potential suppliers and manufacturers is a vital step in starting a business. Research the products offered by the suppliers, you need to research the company to gain familiarity with the people you are doing business with. Because the manufacturer is an extension of your brand and service, the task of locating the most ideal supplier or manufacturer will likely take some time.

Where Will Your Business Be? And What Licences Do You Need?

Many startups are operated from home because owners need to minimize the overhead costs in the beginning. But if securing office space may be a necessity, consider the size needed because that determines the cost of the space. For some businesses, the location of the office will make all the difference so that is another consideration to make as well.

Sole proprietors must submit a trading address to the HMRC when handling company registration. In addition to the trading address, you will also be required to provide a physical large dictation address for customers as well as list the addresses of your registered agents. LLCs and LLPs must provide the same information, but in addition, provide service addresses for each managing member of the company. This may include directors, subscribers, secretaries, and most importantly, the PSC, which is the Person with Significant Control.

Depending on the type of business you are classified under, state and local laws may require that you have a license or permit prior to engaging in business. Check the government pages in your area to find out if your service or product fits under these criteria.

Protecting Your Business and Yourself in Every Way

• Do you need business insurance?

There are many different types of business insurance that may be applicable in your business endeavour. This could include insurance for vehicles, property, employer liability and even products. Insurance offers protection in case of an accident, complaint or lawsuit. Without it, your business may end up having to liquidate assets or sell the business in order to satisfy any claims that may arise.

• Should you create a privacy policy?

This is one topic of company registration that is often overlooked, but when dealing with clients’ personal information, it is essential that you have a policy in place in order to protect their personal data. Additionally, it is important that your policy is compliant with the Data Protection Act so that if any complaints arise, you can protect yourself- as long as you can show that you followed the guidelines.

• Do you need to apply for a Copyright or Trademark?

If you are in the business of creating innovative products, original ideas, written compositions or even works of art, then you may need a trademark, copyright or patent to protect your rights to those forms of intellectual property. Even your logo is considered intellectual property, and should be copywritten so that no one else can use, copy, steal or sell your logo without your consent. 

• How do you ensure compliance with Money Laundering Regulations?

Businesses that deal with money in some fashion are required by law to comply with Money Laundering Regulations. These regulations are meant to protect the customer because they ensure that due diligence measures are employed so that their identities are confirmed. This keeps you from doing business with people using stolen identities, and it also decreases the incidence in which scam artists is are able to conduct business using them.

• Register with HMRC and organize your accounting methods

The final step is to register your business with HMRC in order to establish your businesses taxation guidelines. You may be responsible for Corporation Taxes or VAT if your business is an LLC or LLP. In the case that your business is set up as a sole proprietorship, you may be required to pay PAYE or Self-Assessment taxes.

Creating Your Brand Presence

When combined with your business name, a company logo is important for branding your company and creating brand awareness. When designing your logo, simple designs work best. Incorporate your overall mission and your brand into your logo, and you will find that your logo can be used as a very effective marketing tool.

You also need to create a website and set social media profiles. Without a website or social media profile, your business does not exist because most people find out about businesses online. Consumers want to be able to interact with the brand and learn what they stand for. That is why you should also maintain a social media profile on Facebook, Twitter, Instagram, and LinkedIn in order to make your brand available within these various communities. You can create exclusive communities that are only for invited members, or you can have a page that is open to the public for comments and posts.

Developing Your Advertising and Marketing Plan

The only way to attract customers and make sales is to market your brand and your products or services. Marketing and advertising strategies are plentiful, so you have to consider your budget as well as your resources before launching a plan. When formulating an off-line marketing strategy, you can use newspaper ads, local flyers and even coupons. Online, your marketing strategy could include blog posts, free eBook giveaways, contests or drawings, videos, and even emails. Regardless, the process is continuous, especially if you plan on cultivating first-time customers into repeat customers.

Packaging and Delivery & Return Services 

When selling a proprietary product, you will need to design the packaging of your product, as well as create the description labels. Regarding certain products, the label must also include the price, metric measurements, and quantity information for consumer use. Food and drink products require that nutrition and safety information is clearly displayed on the label.

When applicable, packaging must abide by the Packaging Regulations 2015, which limits volume and weight restrictions in order to minimize environmental impacts of discarded packages. Consumable products like food and medicine, as well as chemicals that could potentially be dangerous, must be packaged in accordance to the Food Standards Agency.

If you are selling physical products, you'll need to provide delivery services. When choosing your delivery service provider, it is important to consider the amount that is charged and the delivery options that are available. Find out if the company offers international delivery. Also, determine if the delivery service provider you choose will allow you to purchase prepaid envelopes to be used for returns.

The Hiring Process 

The first step in hiring staff is to register as an employer with the HMRC. Once official, you must secure employers liability insurance then structure your payroll. As long as your business is compliant with health and safety requirements, the next step is to schedule interviews and hire the employees that have the most potential. Once employees are on your payroll, then you must enrol eligible employees into the workplace pension scheme. 

It is highly recommended that you seek an accountant or financial consultant in order to get assistance with selecting the most affordable and efficient methods of company registration. If you do not have a high level of expertise in these areas, you should focus on operating and expanding your business while allowing professionals to handle the corporate details. A simple oversight can be detrimental to your business, so you should put your energy towards what you’re good at – being an entrepreneur.

Written by Samuel Atkinson at 1st Company Formations. 1st Company Formations is a Companies house approved Formation agent that serves over 36,000 businesses per year. For more tips and information on starting and running a business visit the 1st Company Formations blog.

 

Subscribe to our newsletter

If you would like to receive our startup themed newsletter, full of the latest startup opportunities, events, news, stories, tips and advice, then sign up here.

• #starting a business
• #guide to starting a business
• #starting a startup
• #concept

Published on: 24th January 2018