If you’re thinking about starting up a new business, there are many things to consider. In this simple ByteStart guide, we explore the steps you need to take – from getting the right idea – to putting your ideas into practice.
We stick to the key points to keep this guide as simple as possible. You can explore each step in more depth by clicking on the further information guides.
1. Do you have a good business idea?
- Is there a market for your idea?
- Is your idea profitable?
- Have you got a business plan?
2. What business structure is best for you?
- Most small business owners either become self-employed (as a sole trader or member of a partnership) or set up a limited company. Each way of working has pros and cons.
- Being a sole trader is the quickest way to get started, and there’s less admin to deal with. A limited company can offer more protection if things go wrong and is often more tax-efficient.
- It all depends on how you plan to run your business, whether you do it independently, and many other factors.
3. How are you going to finance your start-up?
- Are you going to set up a part-time business, or are you planning something much bigger?
- Whatever your plans are, how will you fund them during the start-up phase? Do you have savings or need to borrow money to get started? What about ongoing cash flow?
- Running out of money is the most significant cause of small business failure, so this step is essential!
4. Register your small business
- If you’re going to be self-employed, you need to register for self-assessment.
- If you’re forming a company, you must incorporate via Companies House.
5. How to deal with tax and accounting
- If you’re self employed, you pay income tax and national insurance via self assessment at the end of each tax year.
- Limited companies pay Corporation Tax on their profits, and directors and shareholders pay tax on salaries and dividends.
- If your small business turns over £90,000 or more, it has to be registered for VAT.
- Hiring an accountant is a great idea.
- Online accounting software will save you an enormous amount of time, and keep your records safe in the cloud.
6. Where and how are you going to work?
- Are you going to work from home, rent or buy business premises?
- Dealing with technology.