How to Start a Business in the UK: 15 Step (In-depth 2024 Guide)

Starting a new business in the UK takes hard work, research, bravery, and self-confidence. It also needs thorough preparation and being ready to adapt in case situations change. As an entrepreneur, you should also conduct market research into your industry and the demographics of your target customers. This research is crucial for developing a solid business plan.

This blog provides practical strategies that successful entrepreneurs have used instead of trial-and-error. So keep reading to learn how to start a business in the UK, follow these 15 steps, and transform your business idea into reality.

I recommend reading each part if you're new to starting a new business, since it guides you on UK financial and legal issues.

1. Understand You're an Entrepreneur

Starting a new business requires thought and thorough examination of your strengths, weaknesses, and expertise. This will help you think about the kind of business you can venture into and which you can't. This approach lets you consider your strengths and limitations.

Even with an excellent business idea, assessing your skills and personality traits is crucial because you may lack what it takes to turn it into a successful venture. Aim to start business ideas that align with your natural strengths, such as:

1. If you've solid programming skills, you're well suited to launch a web development agency.
2. If you've got a short attention span, you shouldn't have an accounting business.
3. Avoid a business requiring extensive client engagement if you dislike interacting with new people.

These are just examples, but they give you an idea of the thought process. The key is understanding yourself and the team and assessing whether you're well-suited to specific business ideas or types of business. This understanding helps you brainstorm and refine your ideal business idea.

Understand the motivation behind starting your business

Before opening your business doors, understand why you're starting it. Although it might seem evident, there are numerous reasons why you might leave your career job for the uncertainty of starting your own business. Remember, defining yourself increases your likelihood of success.

You could be starting your business to pursue fame, wealth, power, or saving the world. Like many entrepreneurs, a combination of these factors might drive you, though you may not acknowledge it. Recognising your motivation for starting a business is crucial in selecting the right type.

If your business doesn't align with your ambitions, chances of failure increase significantly. Ensure your personal goals are compatible with your business type, for example:

• If you're seeking wealth, consider a financial services company, where Fintech ventures often have higher valuations and revenues than other start-ups.
• When aiming for power and influence, pursue a career in media-related business.
• When you desire fame, consider a business in an entertainment-related industry.
• To save the world, you may start a business addressing climate change via renewable energy solutions.

Understanding why you're starting your business will help you focus on a business idea that will channel you toward your motivation.

Ensure it's a good reason to start your business

If your aim for starting your business is several motivations rather than one, this might stir conflicts. For example, building a long-term family business to pass down to your generations might conflict with your goal of creating a significant fortune, as you may need to sell your company to realise its value.

Although it's possible to build a business solely to generate vast wealth, relying on this motivation alone can be tricky. Building a business requires years of hard work before seeing any financial return, and the failure risk is substantial.

Relying only on the prospect of future financial reward may not sustain through tough times. Therefore, ensure you have strong motivation beyond generating money and enjoy the journey.

Consider your entrepreneurial passion

When you start a business that you are passionate about, you will likely be successful. This is because you will work harder and persevere for a venture you're passionate about, making you succeed. The line between a business owner who succeeds in a business and one who fails is simply passion.

So, if you want to succeed in a business, try the one you have passion for. In figuring out this kind of business, you need to think of activities you're passionate about or interested in. For example:

• If you love hiking, you should consider starting a travel business
• If you're passionate about Lego, set up a construction or a toy business.
• If your love for music is incomparable, think about starting a sound-related company

Are you of age to start a business?

Your age is another consideration when starting a business. Are you too young or old to start your business? What's the right age to be a start-up founder? Most of these entrepreneurs are between 20 and 35 years old.

Conversely, Kauffman's study, "The Anatomy of an Entrepreneur" found that the best age for a start-up founder is 40 years. Starting a company at this age has numerous advantages, such as significant experience.

However, age shouldn't be a barrier to success. Different ages have benefits and drawbacks. The decision to start a company depends on personal circumstances and mindset. While there are potential reasons to hesitate, are they valid?

2. Come Up with Sound Business Ideas

Coming up with a business idea is easy, but a sound and excellent business idea is quite challenging. To ensure success, explore numerous ideas before settling on the one you'll pursue.

Here are tips to help you generate business ideas:

Solve your prospective customer problem

Think about a problem that will solve your potential customer's problem and address it. The most successful business originated from a mission to tackle a real issue affecting people and offered solutions through their products and services.

For example, Tesla aimed to transition the automotive industry to fully electric vehicles and is progressing toward building a successful multibillion-dollar business.

Identify the area in which you can provide a better solution

You can generate an excellent business idea in areas where others have already provided the solution, but you can do better than competitors in cost innovation or efficiency.

For example, over a decade ago, Apple entered the mobile phone market as an underdog with an innovative product. Despite the technology that has existed for so long, no company has introduced the level of innovation that the iPhone has brought, making Apple a market leader.

Be cheaper than your competitors.

Looking for areas where you can provide your customers with significant savings will be vital for your company. These businesses grow faster, especially during a recession.

Build a company for future markets or needs

Consider how the market will look in 5 or more years. Thinking ahead lets you anticipate new markets and niches emerging from innovations and technologies.

For example, cryptocurrencies, such as bitcoins, have evolved into significant markets. The technology ecosystem and infrastructure providers have developed around them.

Consider a traditionally slow-changing market

Are there business fields that haven't experienced significant innovation in the past 50–100 years? This is often common for non-tech sectors that have been slow to embrace change, especially when the status quo remains profitable.

Such industries present substantial opportunities for disruption through new technologies, systems, innovations, and methods. For example, the taxi industry has undergone a massive transformation, with Uber's arrival revolutionising how we find and hire taxis.

Steal someone's business idea, but be better

Your business idea can still stand out even if you're not at the forefront of technology. Many well-known companies were not revolutionary; they had just entered established markets and outperformed the existing players.

You don't have to own an original idea to develop an excellent business; you can do better than those already in the market. A good example is Microsoft. It just entered the market and beat the dominant operating system providers in the 1990s.

Consider a global business

The world is a global village; you can have a company in Japan and operate it in US or UK. Globalising your business offers vast possibilities for running a company in emerging markets globally. If conditions in your country of residence market are not favourable for your business model, seek out a country where they are more suitable.

Turn your hobby into a lucrative business

People are turning their hobbies into real business. Most of these businesses succeed because you know and are passionate about it. For example, you can set up an antique shop if you love collecting antiques.

Don't stick to one business idea

Although it's easy to settle on one business idea, it's advisable to develop several great ideas and then explore and compare them.

3. Evaluate Your Business Premise

After researching great business ideas, the next step is to test and validate whether these ideas are viable in the real world. Skipping this stage may lead to wasted time on ventures that ultimately won't succeed. Knowing the importance of testing and researching your business premise, this section will explore various routes for testing ideas.

Be accurate when measuring performance

During the proposed business test, you can evaluate its performance using various methods. Determining the specific metrics you want to measure to gauge success or failure accurately is essential.

These are suggested measures to help get started:

• How much revenue can you generate, or how many items can you sell?
• How much media attention can you create?
• How much customer interest can you attract?

Different testing methods

you should seek the fastest, most cost-effective, and most reliable ways to test your business premises. The test method you choose will depend on your specific business idea. Below are some of the most popular approaches that meet these criteria.

Carry out e-mail marketing and create a landing page

If you offer a solution-based business with an online sales channel as your primary approach, testing online is the quickest way to evaluate your idea:

• Develop a quick one-page website
• Give it a professional look with a logo
• List your solutions or services
• Add your contact email
• Collect emails from your potential clients and contact them about your service.
• Manage the communications and see the one interested; if they aren't, ask them why.
• Build your ecommerce store and buy adverts
• Build an ecommerce store using BigCommerce, WordPress, or Shopify.
• Add a brand and make it look professional
• Create a mock-up graphic of your products
• Add contact information and create an email
• Use £25 on Facebook ads to measure the number of clicks, sales, and revenue generated.

Consider Telesales

A highly effective way to get meaningful qualitative feedback is to identify your ideal buyers on platforms like LinkedIn or Facebook, find their number, and pitch your product directly. Aim to gather as much feedback and as many pre-orders as possible.

Set a stall and start selling.

If your primary sales method for starting your product-based business is face-to-face, a cost-effective approach to test your business is to create initial versions of your product and secure a booth at your local market or festival.

You can assess the viability of your idea through sales and customer feedback, determining if it's successful. You can also gather valuable insights on adjusting your approach if it doesn't initially succeed.

4. Create a Business Plan

After understanding you're an entrepreneur, ask yourself these questions:

• What's the purpose of your company?
• Who are your customers?
• What are the end goals?
• What's the source of your finances?

You will answer these questions if you have a well-crafted business plan.

New business owners often make mistakes by rushing into things without considering crucial aspects of the business. Identifying your target customer base is essential. Who will buy your brand? There's no need to pursue your idea without evidence of demand.

Conduct market research

Conducting comprehensive market research in your industry and understanding target customers' demographics is vital in developing a business plan. You can research using focus groups, surveys, and public data. This lets you grasp your target clients' needs, behaviour, and preferences and gain insight into your industry and competitors.

Experts often suggest collecting demographic data and performing competitive analysis to identify market opportunities and constraints. Successful businesses distinguish their products from competitors, significantly influencing their competitive environment and enabling them to offer unique products to customers.

Have an exit strategy

When compiling your business plan, it's also advisable to consider your exit strategy. Generating ideas for exiting a business encourages you to plan for the future.

"Too often, new entrepreneurs are so excited about their business and sure everyone everywhere will be a customer that they give very little, if any, time to show the plan on leaving the business," by Josh Tolley, Shyft Capital CEO.

A comprehensive business lets you determine your company's next move, how it can overcome difficulties, and how to sustain it.

Elements of a business plan

Your business plan should encompass essential elements and can be structured and clear. Develop a plan that anyone can read and grasp. Clearly outline your business's objectives and your strategies to achieve them. This involves organizing it into distinct and understandable sections.

• Executive summary: This is an introduction to your business plan, summarising its content and providing your business overview. It should briefly and concisely describe your business and its objectives in about two paragraphs.
• Content page: sometimes, the reader may want to skip to the parts that stir their interest. A content page enables them to browse quickly to the correct section.
• Business model: this area defines your business mode and details the solutions, products, or services you offer.
• Clientele market and competition: in this area, you should demonstrate an understanding of your target customers, your products and services market, and an analysis of your competitive landscape. This includes identifying your competitors and positioning your business within the market relative to them.
• Marketing and sales: the section aims to present a well-defined strategy detailing how you plan to achieve your objectives, whether it's scaling, pursuing other tactics, or generating revenue.
• Finance and projections: present your current financial status and any forward-looking estimates for the business. Ensure your financial forecast is realistic, as it will need to be substantiated in the future.
• Team: Include a brief section about your existing team, detailing their backgrounds and qualifications. If you plan to expand your workforce, include these intentions here.
• Business plan overview: Summarise your entire business and its plans through concise bullet points, and provide contact information so readers can easily reach out to you.

Update your business plan

Update your business plan if your circumstances and objectives change. This serves as a historical record of your journey from inception to the present and a tool to monitor progress toward your goals.

To track your progress against goals, consider creating an Excel spreadsheet or adopting project management tools such as Trello or Asana.

Business planning tools

Most businesses use Whiteboard, Excel, and Word as business planning tools. However, if your business is more intricate or your organisation is more complex, you can use business planning software such as Asana, LivePlan, and Trello.

5. Registering Your Business

Register your business according to your specific needs. Here, we will check different UK business structures, their pros and cons, and how to establish them. Many entrepreneurs opt for a limited company structure in the UK.

Types of business structures available:

These are UK company legal structures you can choose when registering your company.

Sole trader

This is the type of business where one individual runs the entire company. It's the simplest structure ideal for anyone with a business, including web developers, independent accountants, florists, etc.

As a sole trader, you're entitled to your business profits, losses, debts, and damages. This business type has over 300 million registered businesses across the UK, and the number is growing.

Limited company

A UK limited company is a business type separate from its owners. As an owner of a limited company, you're only liable for business debt to the extent of the money you invested in. This limits you from paying beyond your investment.

There are two limited company types you can register in the UK. This is similar to United States LLC, but you must complete a free LLC operating agreement. The documents you provide vary depending on the type of limited company you choose to form.

• Private limited company (Ltd): Owners hold private shares in these companies. This is the most preferred registration structure for most UK small businesses. Over 5.2 companies in the UK operate as limited companies.
• Public limited company: in PLC, public members can buy shares. This type of company must have a minimum of 50,000 pounds before trading as a PLC.

Limited liability partnership (LLP)

Businesses like law firms, dental clinics, veterinary services, etc, use this partnership structure. It consists of one or more limited partners and one or more general partners. These partners have distinct responsibilities and levels of liability concerning the business.

Limited partners

• During formation, they provide money or property
• They are liable for company debts up to the amount they have
• They don't have portion control and can't actively manage the company
• They can't withdraw the initial investment they put into the partnership

General Partner

• They are responsible for paying the debts that the partnership cannot settle.
• They actively manage and control the company's operations
• They make irreversible and binding decisions on business matters

They can apply an authorised contractual scheme (ACS) where assets and money are pooled and managed on behalf of the partners. The partners co-own the assets but only pay tax on their share of profits.

How is your business structure?

There needs to be a more straightforward answer on which business structure is ideal for your business; it mainly depends on your company's operations and needs.

For example:

• If you want to expand your business and sell it in the future, you should consider a private limited company
• If you intend to operate as a solo business owner, sole tradership would be your best fit
• If you're starting a business with a substantial amount of senior management and capital, especially in the service sector, you should choose LLP.

Before settling on any structure, research to determine the one that suits your business needs.

Register your company

Registering a business in the UK is straightforward, but seek legal advice or use a formation agent if you are unsure.

Let's answer these questions to give you an overview of the company's registration.

Where do I register my company?

You can incorporate a new company at GOV.UK Companies House. It takes around 30 minutes if you have every required detail.

It costs  £12 to register your company electronically, and it will take around 24 hours for your business to be registered.

To incorporate your business, you need the following details:

• Accompany name
• Company address
• Details of one or more directors
• Company Shares, shareholders, and shareholding Information
• A memorandum of association is a document that outlines company rules
• Information of people with significant control

6. Set Up Finances, Tax, and Accounting

Since your business has a legal structure, the next crucial step is financial and tax responsibilities.

Open a business bank account

Before you start trading or purchasing, you must open a business bank account to help you send and receive payments. That's why you should select a business bank account carefully; this banking might stick with you throughout your company's lifespan.

Here are tips that will help you choose the right baking provider:

• Research their track record when working with small businesses
• What is the feedback from other small business customers about the bank?
• Is the bank reputable, and have they been involved in any recent illegal activities?
• Do they offer a variety of products and resources designed for small businesses?

Once you collect this data, you can select which bank is best for your business.

Select the right bank account

Choosing the proper business bank account is essential since the wrong choice can hugely impact your banking costs. So consider these tips when selecting a business account:

• Fee structure: Check whether fees are based on different types of transactions. Is there a flat monthly fee, or is the account fee-free?
• Free-free transactions: Does the account offer fee-free transactions for specific types, such as retail or online?
• Transaction fees: If transaction fees apply, what are the charges per transaction
• Complimentary benefits: Does the banking provider offer perks such as insurance or other benefits for opening specific accounts?
• Promotional offers: Does the bank offer free banking for a certain period? Many banks offer 6–24 months of free banking for start-ups.

Gathering and comparing this information may be challenging, and taking the time is a worthwhile effort that can save money, time, and headaches later.

Understand your accounting and tax obligations

Whether you're a shareholder or a director, you must handle accounting and pay business taxes to the HMRC. Understanding your fundamental accounting financial and tax obligations is vital for proper business management to avoid HMRC fines and legal compliance.

1. Record financial transactions: every business's legal obligation is to keep an updated and accurate record of finances. This means you should record the income expenditure and other business transactions. An updated record helps you make financial plans and allows you to file your accounts quickly since you have all relevant data available.
2. Filing confirmation statement: LTDs and LLPs must submit confirmation at least once every year. The statement confirms the information at the Companies House is correct and up to date; if it's incorrect, you must update it.
3. Prepare and submit annual accounts: LLPs and Ltds must submit accounts yearly. The accounts contain records of your business revenue expenses and financial transactions in an accounting year. Your corporation tax bill will calculated based on these accounts. An accountant prepares these accounts using annual accounting records. The process can be simple or intricate based on how organised your records are.
4. Register for self-assessment: This involves the annual submission of accounts detailing the year's income. HMRC uses this to determine your tax liability. Sole traders, limited liability partners, and company directors must register for self-assessment. Sole traders can deduct business-related expenses to lower their taxable income and overall tax bills. You're exempt from completing the self-assessment if your limited company is non-profit.
5. Register for corporation tax: if you own a limited active company, you must register for corporation tax three months after your business starts. Your corporation's tax liability is based on the profits reported in your annual accounts, and you will be required to pay a fixed rate tax accordingly.
6. Register for value-added tax (VAT): if your company surpasses the VAT threshold in sales in a year, you must register for VAT. You will charge this flat rate on top of the products or services you sell. You can buy goods from other companies VAT-free with a VAT number.
7. Don't forget business rates: these are taxes the government imposes on business properties administered by local authorities. You pay these charges yearly to various business premises such as factories, store bars, and warehouses. You must pay business rates if you own or lease a commercial property. However, you don't need to pay business rates if you operate from home.

Hire an accountant

Did you know having an accountant is cheaper than hiring one? Having an accountant is crucial for your business since they will ensure:

• Pay the correct amount of tax
• Offer you financial advice
• Compile your annual accounts and submit them to the HMRC

Make sure you meet and pay all taxes, such as accounts annual statements and corporation tax.

An ideal accountant for a start-up is a local independent one. They will offer your business financial advice and attention while being more cost-effective than a major firm.

The accountant may request you to pay an annual lump sum or a monthly fee, roughly between £30-150 per month, based on the complexity of your company's financial matters.

As for the sole trader, you will need an accountant once a year when filing for self-assessment. This should cost you around £80 -200.

Select a small business accounting software

if you're running an LLP or LTD; you need small business accounting software for these reasons:

• As a limited company, you must submit annual accounts to the UK government each year. These accounts include records from a yearly accounting period.
• You can accurately track your financial transactions and assess your business's economic health, including profit, costs, and revenue.

7. Purchase Business Insurance Policy

Purchasing the right insurance for your business is vital before you start your operations, even if you had planned this for later. If you're not adequately insured, handling issues like theft, property damage, and customer lawsuits can be expensive.

Here are the primary types of insurance you might need as a start-up:

1. Public Liability Insurance (PLI): it safeguards your business against losses from property damage or injuries incurred by customers or individuals due to business activities. This coverage is vital if you operate physically and engage with customers on business premises.
2. Landlord insurance (LI): This insurance protects property owners against losses related to renting out their property. If your business owns an office space and leases it to another company, the insurance covers damage caused by tenants.
3. Employer liability insurance (ELI): this insurance protects your business from financial losses arising from work-related injuries or illnesses sustained by staff. Workplace injuries are costly in most cases, but if an employer is held responsible, ELI provides crucial protection. This insurance is vital if your business has employees who engage in physical tasks like event management or manufacturing.
4. Keyman insurance (KMI): This coverage protects your business against the loss of a vital employee like a CEO by offering a substantial payout if they become incapacitated or dies. This is like life insurance for critical personnel. If your business heavily relies on one person or small team, this cover will help prevent bankruptcy in a crisis.
5. Professional indemnity insurance (PII): This insurance is essential if your business offers service or advice to clients. It safeguards your business against claims for damages or legal costs resulting from omissions, acts, and professional breaches during operations. PPI protects if your advice or services adversely impact the client.
6. Product liability insurance (PLI): This insurance shields your business from property damage-related claims or personal injury caused by the product you sold or supplied.
7. Business content insurance: this insurance covers business inventory, equipment, and tools. It also includes specialist stock insurance for businesses that handle many goods. This insurance reimburses the replacement or repair cost in case of theft, fire, or flood.
8. Trade credit insurance (TCI): this insurance safeguards private companies from potential losses if their customers fail to repay debts due to insolvency default or bankruptcy. This cover is pertinent for businesses operating in a B2B environment with several vital customers using credit facilities extended by the company.
9. Directors' & officers' liability insurance shields management from personal liability in cases where claims are made against them for alleged wrongdoing. For example, this coverage will apply if a director gives inaccurate financial information, knowingly or unknowingly, which causes an investor to suffer economic losses or make detrimental decisions, leading to legal action against the director.

8. Protect Your Business

Handling legal matters can protect your business from unpredicted issues. Most companies don't need a legal advisor when starting, but consulting one can be beneficial for specific legal issues when incorporating the company.

Legal support will be essential when drafting agreements or protecting company interests. So, if you hire a solicitor, agree on an hourly rate and estimated time for any legal work in advance.

• Securing intellectual property support: protecting your intellectual property is essential to safeguard your products, brand, and creative assets from unauthorised use.
• Trademark your brand and name: a trademark is a legally registered symbol, phrase, or symbol that identifies and protects your brand. By trademarking your business name and logo, you gain exclusive rights to use them, preventing others from misappropriating your identity.
• Understanding copyright law: Copyright protects your written or creative work from being used without your permission. This is vital for companies publishing entertainment and information to ensure their content isn't reproduced without authorisation.

Each of these legal measures helps secure your business's intellectual assets, offering protection and legal recourse against infringement

9. Brand and Market Your Business

Before you start trading, ensure you build up your brand and attract people who are ready to try your product or services once you start trading.

How to create a professional brand for your start-up?

Creating a professional brand is essential to stand out in your competitive industry. Creating a professional brand doesn't have to be expensive or time-consuming.

Let's look into crucial considerations:

• Design a logo using options like hiring a designer on Fiverr, using an online logo maker, learning graphics yourself, or using a cost-effective design agency
• You can also create a company slogan if you find it beneficial
• Develop a colour scheme for your business that will be consistently used across all promotional materials and company assets; consider basic colour psychology when choosing.
• Consider designing a symbol that can serve as your company's recognisable mark, especially for products where a full logo may not be suitable.

Take your time to explore various branding options before finalising your brand identity.

• Create a company website: It's advisable to create your own website, since many customers rely on the internet to discover business information. The website serves as digital evidence of your start-up presence and provides an effective avenue for engaging with existing and target customers.
• CRM: the CRM platforms enable you to store customer information to enhance marketing strategies. Implementing a well-planned email marketing campaign can significantly boost customer outreach and communication effectiveness. Success hinges on methodically building and managing your email marketing contact list.
• Social media: use a massive audience to spread the Word about your company. Use it as a promotional to offer discounts and coupons to your audience once you launch. The social media platform you decide to use depends on your target audience.

How do you maintain your business website?

Maintaining your website ensures its effectiveness and longevity. Without proper website upkeep, you might encounter numerous issues that can negatively impact your website performance and your entire business.

Website maintenance involves:

• Updating your content regularly
• Ensuring the security measures are intact
• Verifying all features function correctly
• Addressing technical issues
• Regular maintenance also includes high search engine rankings and keeps the audience engaged by providing fresh content.

Website maintenance is a continuous process, not a one-time effort. It keeps your site running smoothly and enhances its visibility, contributing to its overall success.

If you cannot maintain your website, seek help from companies offering website maintenance services such as security, updates-testing, etc. Employing a website maintenance company is cost-effective and enables you to focus on core business commitments.

Regardless of how you maintain your website, ensuring regular upkeep is crucial for sustaining success and driving sales and traffic.

10. Select Your Vendors

Running a business with your team can be overwhelming, requiring you to partner with third-party vendors. Companies in other sectors can collaborate with you to enhance your business operations. For example, by collaborating with the business phone system, you can implement an interactive voice response (IVR) system that automatically directs callers to the appropriate representatives.

You should be careful when choosing partners these partners because they access your business's most valuable data. So you should find a trustworthy company. Ask your vendors if they have experience in your industries. You look into their success with current and the types of growth they have facilitated for other clients.

Although not all businesses will require the same type of vendors, certain services are critical for most companies; for example:

• Facilitating various customer payment methods: providing multiple payment options ensures you can complete sales in the most convenient format for your target audience. By comparing options and selecting the best credit card processing provider, you can secure optimal rates for your company. This approach is critical for small businesses, as efficient credit card processing often increases revenue and a broader customer base.
• Meet a start-up community: engaging in start-up communities can be beneficial. These communities provide opportunities to meet with fellow entrepreneurs, share experiences, and exchange valuable insights.
• Handling finances: You may manage your accounts initially, but as your business grows, you may need to hire an accountant or choose account software.
• Processing customer payments: implement a point-of-sale system to provide a modern transaction interface. This system combines payment processing with inventory and customer management features. This is crucial if your company is product-focused rather than service-oriented.

11. Build Your Team

You must hire employees and start business operations unless you're a sole trader. Many businesses start small, and as they grow, they keep adding their team. That is why you must know how to recruit as a business owner.

First, you should only hire people if necessary because every new employee has more responsibility. But if you want to add to your team, ensure you use the right approach to finding and adding the best employee for the role.

How to attract good employees

If you want to attract good employees, you must:

• Provide a competitive remuneration package such as salary share options and benefits
• Use your business vision to inspire candidates to join the enterprise
• Highlight career progression opportunities for candidate
• Showcase a dynamic, diverse, and engaging work culture
• Emphasise what sets you apart. If your salary offer can't match that of other companies, outsmart them with responsibility and growth opportunities.

Handle recruitment process

After attracting potential candidates, the next step is having a solid recruitment process to ensure you hire the best. This means your process should have the following:

• A timeline and states for potential employees
• Explicit criteria for what you seek and how candidates will be assessed
• Conduct at least three interviews with different team members
• Include a step to check previous work references and vet the candidate's claims.

Remember, a poor recruitment process may not attract the best youth candidates. So, your business should invest time in recruitment to attract good employees.

In-house employee recruitment vs outsourcing

In-house and agency recruitment offer different advantages depending on your company's situation. Let's compare their benefits side by side.

Most small companies prefer outsourcing the candidate attraction phase, followed by in-house recruitment and assessment of candidates.

Establishing management ethos and structure

Effective management is crucial for business success. Right from the start, you need to establish a clear management structure to foster positive work and cultivate a company culture. This will support your business and employees as they grow.

Ensure compliance with taxes and employment law

Building an effective team involves more than recruitment and management; it also requires understanding and complying with tax and legal obligations when hiring. You must know the tax, legal, and pension obligations of hiring your staff.

Know employment taxes

When you hire in the UK, you must pay a few monthly employment taxes, such as national insurance contributions for your employees. You pay these taxes through PAYE, a government system designed to collect taxes from UK businesses.

Understand UK employment law

UK employment is designed to protect the company and the employees. As an employer, you must know of these critical areas:

• Employees must be paid at least the minimum age
• If dismissed without cause, such as downsizing or workplace closure, your employees are entitled to a redundancy package after two years of continuous service.
• Your female employees qualify for 52 weeks of maternity leave, while male staff can take a 2-week paternity leave if they've been with the business for over 26 weeks.
• Every employee should work a maximum of 48 hours a week unless the employee consents to work more and sign an opt-out agreement.
• Employees qualify for a minimum of 28 days of paid holiday annually prorated for timeworkers.
• Discrimination based on disability, gender, race, or other factors is prohibited in recruitment, promotion, pay, termination, or training access.

As an employer, you should understand and comply with these aspects of the employment law.

How do you provide pensions to your employees?

Since 2018, the UK pension regulator mandated that all employees over 22 years of age earning a minimum of £10,000 annually must be enrolled in a pension scheme. As a start-up employer, you must provide pension plans for all eligible staff. You can select a private pension provider to manage these contributions.

How can you manage yourself?

As a business owner, managing work-related stress, pressure, and fatigue can be challenging while juggling work and personal life. You have massive responsibilities as an entrepreneur and company leader.

Here are ways to manage these challenges:

1. Create a support network: Establishing a robust support network with colleagues' family or friends is crucial. The network will give you vital support and encouragement through your entrepreneurial journey, so don't overlook its significance.
2. Find a mentor: When starting your business, get an experienced mentor in your industry. A knowledgeable mentor will offer expert guidance and advice based on their sector-specific expertise. Learning from others' experiences and mistakes is a proven strategy for aspiring entrepreneurs.

12. Fund Your business

You may need funding to start. Let's explore the different types of financing available for your small business.

Personal saving

Many successful companies rely on self-funding. The advantage of this approach is that you retain complete control without involving external parties. However, based on the nature of your business, you may require more capital than you have in your savings, or your funds might deplete quickly.

Business grants

Grants are free funds given to qualifying companies. Many public and private grants are available to support start-ups in economically disadvantaged places or promote innovation.

If you want grants, look at local council websites ranging from £1,000 to £5,000,000. These grants are often disbursed in stages upon meeting certain conditions. This money's benefit is free; the drawback is that the application process can be complex and time-consuming.

Family and friends

This is another common source of start-up business funding, such as a loan or investment. This funding usually comes with flexible terms and may not require repayment if the business fails.

The best thing about family and friends is that they are less likely to take drastic measures to recover their money if you cannot repay them within the agreed terms. However, financing can strain personal relationships if the business fails or expectations aren't well managed.

Business competitions

These competitions allow entrepreneurs to win free funding between £500 and £50,000. Universities, large corporations, or local councils for marketing or PR stunts mostly sponsor them.

Application for business competitions is generally less time-consuming than for grants, but there's no guarantee of winning, and the process can still demand a lot of time and energy.

Crowdfunding

Crowdfunding enables you to raise small amounts of money from people through selling equity or presale-based campaigns. While these campaigns require extensive marketing efforts, they also allow you to test market interest in your business. Successful campaigns can raise funds rapidly, sometimes in as little as 48 hours, though they require months of preparation.

Angel investors

Angel investors are wealthy, mostly former investors who provide business funding in exchange for a percentage ownership of your business. While they prefer companies with some growth or traction, they can offer initial funding between £30,000 and £150,000 under schemes like EIS.

The drawback of this business financing method is you will give up some control. Its brighter side is you can quickly access capital than in grants or venture capital with a focus on the people behind the business.

Venture capital

Venture capitalists are investors who offer large sums of company to businesses in highly technological fields like biotech and life science. The potential for large returns justifies these significant initial investments.

Securing venture capital is complex and involves a percentage loss of business control since the investors actively participate in business decisions. However, it allows substantial funding to be raised quickly if the business has traction.

Business loans

A business loan involves borrowing funds from an individual, bank, or lender and agreeing to repay it over time with some interest. These loans offer flexible capital raising options but can be risky for start-ups.

Failure to repay can jeopardize your business and personal finances, depending on the liability. Since traditional banks lend less to start-ups, this option isn't the best way to secure investment for your new business.

13. Purchase Business Essentials

Setting up the fundamentals for your new business may not be glamorous, but it is essential. From organizing internet and phone services to managing utilities and acquiring technology, here is a streamlined guide to getting these critical basics:

Setting up business broadband

Fast and reliable internet is vital for your new business, customer communications, and online sales. Here are tips for choosing a secure, dependable, and speedy internet provider and package:

• Speed requirements: ensure a minimum of 20 Mbps download and 6 Mbps upload speed.
• Review and compare: explore online reviews of each provider and evaluate different tiers and types of internet packages they offer.
• Contract strength: Opt for contracts that are no longer than 18 months so that you can renegotiate at renewal, potentially reducing costs.
• Alternative solutions:  if your area has poor broadband or fibre connectivity, consider a 4G internet contract paired with an antenna for fast and stable connections.
• Customer service: choose an internet provider with a responsive customer service team instead of relying on automated systems, which can be problematic, especially when resolving issues
• Attention to detail: these steps might seem straightforward, but it's easy to overlook essential aspects amidst the chaos of starting a new business.

Set up a business phone line

A business landline number is essential for presenting a professional image and providing customers with a reliable contact method. Let's see how to establish a business phone line:

Private office: if you have a private office, you should set up a business line as part of your phone package.

Remote options: Even though you don't have a private office, you can still get a landline in most cities, including London. These lines can route to your phone, enabling you to receive and make calls electronically using your business number.

Find office space

Here are options if you're looking for office space to start and run your new business:

• Rent a co-working space
• Apply for business accelerator
• Lease a business incubator office
• Rent office space from another local business
• Rent a serviced office

14. How to Start a Business While You're Working Full-Time

If you are juggling your full-time job and don't want to leave it for your start-up, don't worry. You minimise the risks by keeping your current job during your business's initial stages and working on your business during evenings and weekends.

If your business fails, you will still have your job, but transitioning to becoming your own boss will be smoother if it succeeds. If you want to run your business outside regular working hours, use this approach:

What is the ideal business to start during your spare time?

• Internet-based ventures: choose an online business that doesn't require constant physical presence.
• Outsourceable operation: These are business models where primary fiction can be outsourced.
• Email-based communication: consider a business that uses email for customer interactions, allowing you to manage its operations outside traditional office hours.

Avoid starting a business that competes with your employer or uses proprietary information from your current job, as this can lead to legal complications.

Let's look more at how you should handle your new business:

• Conceal Your Entrepreneurial Efforts: Downplay your business ambitions before your employer. Even if you have a good relationship, it's best to leave the impression that your focus is separate. Share your business activities on a "need to know" basis and only discuss your venture if directly asked.
• Work on Your Business in Personal Time: Maintain a clear distinction between your job and business. Never work on your business during office hours or use your employer's resources for your entrepreneurial activities.
• Minimise Social Activities: Put your social life on hold and seek understanding and support from your family. Balancing a full-time job, starting a business, and maintaining a social life is challenging, so prioritise your time wisely.
• Optimise Available Hours: Maximise every spare moment and use breaks like lunch breaks to make business calls while starting Hotelstayuk.com, which now has a substantial turnover.
• Utilise All Your Free Time: Don't underestimate your available time. With 168 hours a week, even after working 40 hours and sleeping 8 hours a night, you still have 88 hours to dedicate to your business.
• Ensure Adequate Rest: Don't sacrifice sleep. You must rest to maintain your health and making sound business decisions, as sleep deprivation can lead to poor judgment and irritability.

15. Grow Your Business

Launching and making your first sales are just the start of your entrepreneurial journey. Sustaining and expanding your business requires continuous effort and dedication; your success will reflect the investment you make.

Strategies for growth:

• Collaborate with established brands: with well-known companies in your industry. Offers free sample products or services in return for promotional support to enhance your visibility.
• Engage with charities: work with charitable organisations and donate your time or products. This can help raise your business profile and attract positive attention.

Form Your Company with Incorpuk Today

At Incorpuk, we will help you through the company formation process and file your confirmation statements to help your business stay compliant. Whether you're a UK resident or a non-UK resident, our team is ready to provide guidance and help you establish your company in the UK. Contact us here today.

Final Thought

Although these strategies can help boost your start-up and foster growth, remember there's no flawless plan. You need thorough preparation when starting a business, but you must also be flexible and able to adapt to unforeseen challenges for long-term success.

You need to understand and manage your new business's costs and cash flow effectively. If you're not self-funded, look for financing through the methods mentioned, like loans from family or lenders. If you have any questions on how to start a business in the UK, kindly contact one of our experts here.