5 important steps to setting up a small business

So, you have a great business idea that you would like to bring to life? You have consulted others in the business, and you think you have what it takes to make a niche for yourself in the market.

Now you need to get down to brass tacks and work out what needs doing before you can launch your small business operations.

1. Choose an appropriate business name and logo

Be sure to make sufficient enquiries before committing to a business name and logo that will make up your website URL and be used on marketing materials. You can do an online search, particularly on the Companies House webpage to ensure there is no conflict with another business. Pick a name that is representative of what you offer and does not cause confusion with competitors. You should then receive your company registration number (CRN).

You could potentially avoid all of this by deciding to open a franchise instead. A franchise will give you a built-in name and logo. However, the best thing about getting a franchise is that it has a built-in customer base. This means you will start making sales quickly and spend less on marketing. There are several low cost franchises, available, that may interest you.

2. Get the right insurance cover

Whatever the kind of business you will set-up, you will likely need some level of business insurance. Whether it is product liability, commercial auto, or professional indemnity, there are many ways you can come to financial ruin if you do not properly mitigate risks via insurance. You can do online research, approach your trade association, or simply consult a broker who can identify the range of cover you may need and how to get the best possible rates.

3. Organise finances

Setting up a good bookkeeping system is important from day one. This way you can keep track of your cash flow and if you happen to surpass that VAT threshold in the first year, you can easily do your returns. If you are not knowledgeable in tax matters, you can appoint an accountant to help sort out any confusion and keep you legally compliant.

4. Set up your premises

Whether you will have a shopfront or work from home, you need to ensure you comply with the local authority regulations on business premises. Also, ensure that you check on whether you can have visits from customers if operating from home. If renting, you may also need to clear it with the landlord.

You should also investigate if you qualify to make home office expense claims. Be sure to also consult with your insurance broker whenever you make changes to your work premises arrangements, so you are always properly covered.

5. Look up government regulations

There may be a few regulations you need to comply with even if your business is quite small. Issues such as your responsibility when it comes to hiring freelancers, obtaining licenses for your particular activity, and safety guidelines for certain products all need to be factored in as you start and grow the business. Thankfully the regulations are typically simple to understand and can be easily accessed through government websites.

Keep in mind that you do not have to start the process of registering your business with HMRC until you are making over £1,000 a year. Once you achieve this, you will find plenty of support and advice from government agencies, trade associations, and other entrepreneurs who have been where you are at now.