Guide: how to start a business in 11 easy-to-follow steps
By Indeed Editorial Team
Published 9 June 2022
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
There are lots of reasons people start their own business. You might want to work for yourself on your own schedule, try something new or express your creativity differently through your product or service. Although starting a business requires commitment and dedication, the hard work may well be worth the effort and rewards. In this article, we discuss what actions you can take to learn how to start a business.
Related: How To Become an Entrepreneur
How to start a business
Here are the steps you can take to learn how to start a business:
1. Prepare your approach to starting a business
Starting a business requires dedication, planning and effort. Before you begin, consider your strengths, weaknesses and skills. This helps you decide what you can do, what you like to do, what you might avoid or delegate and where you can hire extra support. Unique skills suit different business ideas. For example, if you have skills in designing, then setting up a graphic design business may work for you. Alternatively, if one of your strengths is your ability to stay focused for long periods of time, becoming a freelance programmer might suit you. Starting a business that fits your strengths can help the process feel more rewarding.
2. Test your business idea
Once you have one or more business ideas, now is a good time to test and validate them. Research into who you want to help: who your customer base might be. Defining and becoming familiar with your potential target market can show you if there is a gap in the market for this product or service. It can also be useful to find out who your competitors are and what they offer, as this can narrow down your offering.
Finally, talk to some potential future customers and see what they say about your idea. Testing your business idea provides clarity on whether this is something that you can scale and generate revenue from. It's easy to generate business ideas, so testing them on future customers can provide proof there is a demand for this product or service. You might find it useful to start by thinking about challenges or demands that you can solve through your strengths and skills.
3. Register your business
When you're confident that you have a business idea that is well-researched and tested, now is when you can register your business with GOV.UK. Many companies register as a sole trader, a limited company or a partnership. Sole traders are typically people who work on their business alone. You handle your business's debts and have some accounting responsibilities. Limited companies have more reporting and management responsibilities. Partnerships are the simplest way for two or more people to set up a business together.
Related: 4 types of businesses to start
4. Decide on a name
Your business name is the start of your marketing and branding process. It's a big part of your business's identity and can feed into other elements, such as the logo and brand colours you use. Your name might be a single word or a longer description of the services you offer. It may be helpful to check for web addresses that are available to help you decide. A strong and memorable name is simple and easy to remember.
5. Write a business plan
A well-written and researched business plan can be helpful in your business's success. This is the place to outline the aims and objectives of your business and what you plan to do to achieve them. Your business plan can include your business model, who your customers are, your marketing and sales strategy and financial projections.
If you're receiving external investment, your business plan might contain a lot more detail, to show your investors or lenders what you plan to do with their investments. This is a good place to answer questions they may have, such as what the management structure might look like. Even if no one else reads it apart from you, a business plan is a significant document to come back to. It can remind you of the core reason and motivation for starting.
6. Check the rules for your business
Depending on your business type, you might have additional responsibilities and rules to follow. You might need a special license or permit. For example: if you're planning to sell food. You might also need insurance, especially if you're hiring employees. If in doubt, you can check with the GOV.UK website or a business professional for your business type.
7. Set up a bank account
A good practice is keeping your business and personal accounts separate from the beginning. This allows for more straightforward accounting in the future and saves you from going back through old receipts and invoices. A specific business account allows you to pay employees, vendors and suppliers directly and transparently. If you have received any external business funding, keep it in a specific business account from the beginning. This ensures you do not mix it up with any personal finances you have and provides a clear overview of the financial health of the business.
8. Decide where you want to work
Your responsibilities may differ depending on if you want to work from home or in an office. For example, if you rent or buy a property, you might start paying business rates. Small businesses can apply for a discount on rates and some may not pay any rates. You might also claim office equipment and property as expenses. When in doubt, check with a finance professional.
9. Create a marketing strategy
Marketing your business is important for finding clients or customers. Your marketing strategy might include everything from your website, what social media platforms you set up, how you find new clients and what your brand represents. A well-prepared marketing strategy can increase the chances of success for your business as it helps focus your efforts on your target customers. For example, if your target customers are health conscious, putting your brand and marketing materials on screens in gyms might become a big part of your strategy.
Marketing is a very broad field that contains multiple specialities. Bring on additional support to assist you, particularly if your business is reliant on a specific channel. For example, businesses that sell products online often spend a lot of their budget on paid advertising. Working with a paid advertising specialist might be part of your strategy and your budget.
10. Decide if you want to hire anyone
If you decide to take on staff, you may incur extra responsibilities. For example, if you hire agency workers or freelancers, you handle their health and safety. If you hire employees, you can have other responsibilities like running payroll, paying for their National Insurance and providing workplace pensions for eligible employees.
Hiring people is rewarding and incurs a duty of care. Having a sound business plan, a proven business idea and some customers might be a good start before you take on any employees. Alternatively, some businesses prefer to remain solo and not take on any staff.
11. Establish accounting practices
It's good practice to start vigilant bookkeeping from the first payments in and out of your business. This keeps your accounts in order and provides traceable proof if HM Revenue & Customs request financial reports. Being financially organised from the beginning can save you time in the long run and help you avoid any fees and penalties. You can choose to be your own bookkeeper by using spreadsheets or accounting software, or you can hire an accountant to help you.
Additional information about starting a business
One of the best strategies for starting a business is to create a firm foundation from the beginning. This might include a well-researched idea, a business plan, possibly some starting capital, the correct legal and accounting structure and marketing ideas. Some businesses can work from anywhere, while others require a specific retail or office space for them to be a success.
You may also find it helpful to have an entrepreneurial mindset, along with a willingness and determination to succeed. Planning and strategising for your business can require organisational skills and motivation. Being proactive and ensuring that you have a firm foundation and have support with accounting and legal practises means you can focus your efforts on generating revenue and providing a service or products for customers.
Please note that none of the companies, institutions or organisations mentioned in this article are affiliated with Indeed. This article is based on information available at the time of writing, which may change at any time. Indeed does not guarantee that this information is always up-to-date. Please seek out a local resource for the latest on this topic.
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