Are you thinking of starting a business in the UK? It can be a daunting idea that leaves you lost to know where to begin. After all, it isn’t something taught in schools! With the right guidance the process of starting a business in the UK is straight forward. Here are the key things you must do to start a legally compliant business in the UK.
If you’re reading this it is likely you’ve already got a business idea but are you sure it is the right business for you to be setting up? There are several factors to consider such as your fit for the idea, the business idea itself and also whether it aligns with your end goals.
Starting and running a business requires time, money and the right mindset. Before starting this journey it is important to make sure you’ve considered these three factors. Are you happy that you have the time, money and mindset required to make your business a success?
Starting a business requires a large investment in both time and money. It can be prudent to check there is actually demand for your product or service offering. This step is optional and in cases where your business model has a proven demand (such as a coffee shop) not necessary.
If you’re happy with your business idea and checked you’re ready to start a business, it is time to decide on a business name. This is the first real step of setting up your business. This needs to be done early on as you will need your business name to complete the next steps. To help you with this, check out my business naming guide here: Business Naming Guide.
By writing a business plan you’re forced to think about every aspect of your business. This can give you a better understanding of your business and make sure you don’t overlook anything. You will need a business plan to set up a business bank account and it is crucial if you’re looking to secure funding from investors or banks.
There are several different legal structures you can choose for your business. The common structures to choose from in the UK are sole trader, partnership or limited company. If you decide on operating as a sole trader or partnership, to register your business you’ll need to register for self-assessment. If you decide on operating as a limited company, to register your business you’ll need to register with HMRC.
A domain is your business’ address on the internet. It is what comes after the “www.” of a website address and the “@” of an email address. To have a website or a professional email address you must register a domain. Whether you plan to have a website/professional email address or not, it is good practice to register the domain that matches your business name to stop anyone else using it.
This is only a legal requirement if you have registered your business as a limited company. However, it is good practice to have a separate business bank account regardless of your business structure. This helps keep your business finances separate from your personal finances.
As a minimum your business will need an email address. It is possible to use your own personal email address. However, it is more professional to have a separate business email address that uses your own domain name. You can create a professional business email address with a Google Workspace account. Set up your Google Workspace account here: Google Workspace.
Before you can start operating and collecting customers’ information such as their name and contact details, you must register with the Information Commissioner’s Office. This is a legal requirement to comply with the general data protection regulation (GDPR). Any UK business that collects and processes personal information must be registered with the ICO.
As a minimum your business will require a privacy policy. This is a GDPR requirement. You must provide anyone you’re collecting information off a copy of your privacy policy at the point you collect their information. Depending on the nature of your business you may require other policies in addition to a privacy policy.
These are not a legal requirement. However, it is good practice to have a set of terms and conditions. They are the conditions on which a customer and you agree to do business with each other and outline the rights and responsibilities of both parties, ensuring that your business and your customers are protected in the event one party doesn’t fulfil their obligation(s). It is likely your terms and conditions will be the only contract you have with your customers.
Depending on the nature of the business you’re setting up, you may need to hold certain licences or memberships. Check what is required for your business to be compliant and apply for any relevant licences.
Business insurance protects your business against financial loss in the event a claim is made against your business. You get different types of insurance policies which provide cover for different types of claims. The three most common types of insurance policies include: professional indemnity insurance, public liability insurance and employers liability insurance. The only insurance you need by law is employers liability insurance if you’re going to employ people.
As a business owner you’ll have a legal responsibility to keep accurate financial records for your business. To keep on top of your business finances it is important to have a system in place that allows you to record your purchases and sales from day one.
These are the 15 things you MUST do to start and launch a business in the UK. There are other things you can add to this list such as building a website and your business branding. However, don’t let these things delay the launch of your business if they aren’t a necessity.
As a business owner and business coach, I help other aspiring business owners set up and grow their own business. You might be looking at the list above thinking it is going to take forever or cost a fortune but it doesn’t need to! If you want help with any of the steps outlined above get in touch. I have a range of tools available which can help you set up your business and save you money!
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