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The prospect of starting up your own business is appealing to many in the UK. Recent surveys have discovered that 70% of us have deliberated the idea and four out of five 16-21-years-olds have the ambition to one day become their own boss. In 2017, there were 5.7 million private sector businesses, which represented a four per cent rise from the year before. However, it’s perhaps surprising to find that 80 per cent of new businesses fold within their first 18 months.
Whether it’s a side hustle or a full-time project, there are so many businesses starting up. But as a huge number are ultimately failing, we’re here to look at the laws you must follow and how to give your business the best chance of success through advertising.
Getting your business registered
At the start of your business’s life, you must register it. Most owners will register as a sole trader, limited company, or partnership. While it may be easier to set up as a sole trader, this deems you responsible for any debt the company may build up and leaves you in charge of certain accounting issues.
On the other hand, a limited company lets you separate your personal finances and business assets. This too is easy to set up yourself, but many prefer to seek the assistance of a professional figure such as an accountant as there are a lot more reporting and management responsibilities involved.
It’s sensible to go down the route of a partnership if you’re going into business with someone else. This is the simplest way to set up your new business if there are two or more people involved.
Licensing
Sometimes, licensing can be a section that is overlooked when a small business is being set up. Certain small businesses may not require a licence, but you should always check at the earliest opportunity to avoid fines or being shut down before you’ve really begun.
A licence is also required if you plan to play music, sell food or trade in the street. Use this Gov.uk tool to find out which licences your concept may require.
Insurance
Business insurance is needed so that you and your company are covered against any unexpected costs. It doesn’t matter if you run a large multinational company, a small business, or are self-employed, it’s important to find the right insurance for you. For example, dog groomers’ insurance will greatly differ from catering insurance or retail insurance, so be sure to properly research your options.
Liability insurance will protect you against any damage, mistakes and legal costs. Certain insurances are required by law, such as employers’ liability insurance. This will cover the cost of any injuries or illnesses any employees may suffer due to work. Elsewhere, if your company will be using vehicles, you must have commercial motor insurance, while some professions must also have professional indemnity insurance that has been provided by their professional bodies or regulators.
Commercial property and cyber insurance are examples of policies that are optional, but they could be worth purchasing depending on the nature of your business. If you are going to be working from home, while it’s not a requirement to have business insurance, you should consider updating your home insurance as you’ll need to have the appropriate commercial property insurance.
Becoming an employer
If you plan on hiring staff members, there are several points to consider. Firstly, how much will you be paying? Remember, it has to be at least the National Minimum wage and you must set up their National Insurance payments. It is worth noting here that you’ll be able to claim an allowance to reduce your bill. You must also make sure that they are actually legally entitled to work in the UK, so don’t just presume — be sure to do thorough checks, including a possible DBS check if needed.
As mentioned previously, there’s also employment insurance and you’ll need to write up a legally binding statement of employment for anyone who will be employed for longer than a month. HM Revenue and Customs must also be informed via registering as an employer.
Advertisement
After the legalities have been ironed out, it’s important to correctly advertise your services or business if you want to succeed. A solid marketing plan is crucial in order to outline where you want your business to go and how you can progress. It will look at how much advertising will cost. A great cost-effective way for any local start-up to take advantage of is door to door leaflet distribution.
According to research, nine in 10 people can remember receiving door-drop mail. Of this group, almost half confirmed that they keep a hold of these leaflets, making it an effective method of advertising if you utilise it correctly. It’s recommended that you keep your content simple, include your business name and logo, telephone number, email address and the service(s) you are offering.
Another cost-effective method of promoting your business is newspaper advertisements — so long as they have been properly written. Make sure you don’t neglect your online presence, either. This is a significant area in advertising at present, and social accounts are a great way to promote your business to your intended audience.
If you’re planning to open a new office space, outdoor banners are a great way to direct the public’s attention towards your business. These relatively cheap and durable displays can be used outside your workspace and research has found that the majority of a local business’s regular customers live within a five-mile radius of where you are based. This means that each potential customer could see your banner up to 60 times each week.
You must make sure you plan thoroughly if you decide to set up your own company and want the brand to be remembered for all the right reasons. By fully researching the above points, you will stand yourself in good stead from the offset.
You may also like: 5 common tax traps to avoid when running your freelance business
Sources
https://www.gov.uk/set-up-business
https://www.abi.org.uk/products-and-issues/choosing-the-right-insurance/business-insurance/
