Guide to Start a Business in the United Kingdom
The Major Features You Should Consider to Start a Business in the United Kingdom.
When you think of starting a business, there is a long list of things to think about. But have you ever thought of how to start a business in the United Kingdom for instance?
Here’s the thing. Starting a business in any part of the world may at times be cumbersome and thinking of it can be mind-boggling. But despite the regulatory frameworks and strict guidelines, investors, both, foreign and local venture into a different type of business all the same.
Select the Services that you require for United Kingdom Company Incorporation
The Major Features You Should Consider to Start a Business in the United Kingdom.
When you think of starting a business, there is a long list of things to think about. But have you ever thought of how to start a business in the United Kingdom for instance?
Here’s the thing. Starting a business in any part of the world may at times be cumbersome and thinking of it can be mind-boggling. But despite the regulatory frameworks and strict guidelines, investors, both, foreign and local venture into a different type of business all the same.
Let’s Dive and Delve on Some of the Guides to Start a Business in the United Kingdom.
1. Deciding on the Type of Legal Structure
The United Kingdom has many legal forms of business that you may choose. Now, the key point here is seeking advice on the right structure for your business, and the three commonly sought structures are:
- An unlimited company.
- A private (or public) limited company limited by shares.
- A company limited by guarantee with no share capital.
Other structures that you might need to be aware of include unincorporated businesses, partnerships, Limited Liability Partnerships, Trusts, and Social business organizations.
For you who might opt for a Limited Company, you stand to have an advantage over other types of structures in the sense that your shareholders/founders assets are not at any risk in the event the company fails or go into liquidation. Again, you can transfer ownership either partly or wholly to another owner by a simple transfer of shares.
Some of the key pointers for a Private Limited Company may include:
- Eligibility to undertake any nature of the business.
- Members have limited liability
- A minimum of one director and one shareholder
- A minimum of one share, maximum unlimited
- Eligible to file annual Confirmation statements and Annual Accounts with Companies House.
2. Sourcing for Finance to Start a Business
Running a business requires you to be liquid-like all the time. To sustain your business growth, you need to have a strong financial muscle right from the start through the business lifecycle. But how then do you source for finance to start a business in the United Kingdom? With its highly developed economy and numerous diverse sources of funding, the U.K presents you with a wide range of options but on stringent vetting and security conditions. From the financial institutions that offer business finance stretching from traditional banks through to peer-to-peer lending via online platforms. Venture capital or private equity is one institution that you can source for funds meeting the set requirements by the capital investors. The venture capitalist looks at pointers that indicate that your company has strong management, a sizeable potential market and a distinct product or service with a strong competitive edge. It is under their discretion to either take a minority investment in your company or opt for a controlling interest the moment they lend you finances. Much the same as a venture capitalist, business angels do offer financial backings to smaller startups where the capital can span from one-off injection of seed money to continuing support over successive funding rounds. As part of the guide to start a business in the United Kingdom, crowdfunding is another option where you use Internet-based platforms to communicate with possible investors. It could be through reward crowdfunding—people invest in you simply because they believe in your cause or equity crowdfunding—investors investing in an unquoted company in exchange for equity.
3. Seek a Commercial Office Space
You may decide on your own right to start a home-based business where you don’t need to pay for office space. It could be probably you’re cash-stricken or setting a firm foundation before rolling out your business into the outside world. But some benefits come along with seeking commercial office space in the United Kingdom. Running your business in an office means that you have a registered physical location and address where your potential customers and suppliers can reach you. Likewise, you can officially get notices and correspondences from government agencies and other authorities promptly. Again, having an office upscales the image of your business in the sense that people take you seriously as much as you do to your business. Now, as you plan to start a business in the United Kingdom, you must first do your investigation on locations that best suits your type of business. You can start small as you progressively move along with your business scale-by-scale. There is no better way of boosting your business than within the comfort of your office and U.K offers many affordable options at your disposal.
4. Right Business Networking
The best thing about right business networking is that you get an actual preview of what can work for you and which way to go when it comes to setting up a business. This is one guide to start a business in the United Kingdom that’s essential. How can you know whether that business idea is profitable or not or whether the policies are favorable to you or not without doing the business analysis? Getting the right information on the business, you plan to put up is a journey to your entrepreneurial success. You can begin by being a member of a trade association or attend business exhibitions, seminars, or trade shows to get more information about the type of business you plan to venture in. I bet you’ll meet other professionals who’ve been in the industry and get more insight into the dynamics and right strategies to follow through.
An Outline Procedure on How to Start a Business in the United Kingdom
To get you underway on setting your business, you have to follow several steps before being eligible to operate.
1. Handling Out the Legalities
For a foreigner planning to venture into business in the U.K, you must be eligible to do business. Your eligibility conditions shall include whether you have the necessary visa and residence permits or not. You, therefore, need to know what kind of visa that is permissible to you at the authority. For instance, if you’re non-EU/EFTA national you can apply for among the Tier 1 work visas:
- Entrepreneur visa the UK
- Graduate entrepreneur visa UK: entitled to any graduate with an MBA and has a business idea to start in the UK. Make the application with the UK Department for International Trade.
- Investor visa
For Tier 2 which is a general visa. It allows you to work in the UK for a period up to five years as long as you continue working for the same sponsoring employer. The application costs depend on the individual’s financial situation and the type of visa which may run into hundreds to thousands of pounds. The process may take up to a minimum of 30 working days to be complete.
2. Writing a Solid Business Plan
The idea of having not just a business plan but a winning-solid business plan is equally essential. Your business plan interests the financiers in the magnitude that it can get you funds whenever need be, and therefore, you must ensure that it’s impressive and elaborate. This means that your business plan should explain how you’re going to meet some of the deliverables such as sales volume, revenue streams projections in actual sense financial analysis, market analysis, among others. The thing is that your business plan indicates how you’re going to move from point A to point B. Now, if you can’t come up with a business plan, you can seek help from business solution services provider such as 3E Accounting United Kingdom at your convenient time.
3. Choosing a Business Name
According to the Company’s Act of UK, every business must have a business name. And in choosing a business name, it is vital that the proposed name be distinct and represent the nature of your business. The Act stipulates that you should register with the company registrar if you’re setting up a Limited Company. Similarly, you can register your business as a trademark to alleviate any chances for someone else registering under your name.
4. Securing the Required Permits
Now, in the U.K like any in other countries, there’s no better way to monitor your businesses than through a permit or license. And, therefore, if you plan to start a business in the United Kingdom, you must ensure that you secure a business permit to operate your business legally. Every city operates under certain by-laws and for that reason you must verify what type of permits to procure and what your business requires. The general license permits you to operate in a certain city or jurisdiction, but other permits relate to the type of product, whether you’re importing or exporting and where your product’s destination is. For instance, under the Import Licensing Branch (ILB) of the Department for business, you’ll get an import license. Others licenses are related to foodstuffs (Meat, poultry, and milk) procured under the Department for Environment, Food and Rural Affairs (Defra) in the U.K
5. Legitimizing Your Business
Once you’ve registered your business name, you’re now eligible to register your business. Most commonly, investors prefer Limited Liability Company simply because it’s suitable for any commercial trading purposes. To set up a company, you must register with Companies House and offer details about shares issued to acquire the SIC code, details of directors and shareholders among others. Likewise, the shareholders must draft a Memorandum and Articles of Association that sets out the basic information about the company, rules, and regulations of the company’s internal affairs. It’s under the company’s discretion to provide information about the person(s) with “person with significant control” (PSC) over the company.
As for Limited Liability Partnership (LLP), it allows the owners to benefit out of the limited liability while retaining many of the characteristics of a traditional business partnership. It’s vital that partners draw up a reasonable written agreement to determine the control of the business.
The process of registering may not be complete without registering with HM Revenue and Customs for tax purposes.
6. Hiring Working Staffs
Every business has a fighting chance to see itself through different life-cycles. And employees are important assets to propel you over to the next cycle. And so, before you start a business in the United Kingdom; ensure you get the right staffs for your nature of business. Now, under the UK employment law, workers must be automatically registered into a workplace pension scheme by the employer the moment they start work. Again, you must register as an employer with HMRC either through online or over the phone. The employment law requires one to set up a payroll software system and once done; you’ll receive a notification from HMRC with the employer’s PAYE reference number and Accounts Office reference.
If you’re an employer and planning to hire foreign workers, you must be licensed to do that. It’s your responsibility as an employer to secure your staff valid work passes in case you hire from abroad.
A Short Guide on How to Start a Small Business in the United Kingdom
Starting a business whether small or large will depend on your commitment and what you want to achieve. But what’s important is to think about how you’ll hit the ground running and be your own boss.
Let’s carve it down to five basic steps on how to start a small business.
1. Nurture That Idea
Many small businesses start with a brilliant idea, and without nurturing those ideas to maturity, they fall on the wayside. You must think through it and start dissecting on which products or services you’re going to launch, your target market and of course your potential customers. The sooner you start thinking through those lines, the better because the next you know is you’ll jotting your business plan. This goes to any business whether it’s home-based or office-based business as you plan to start a business in the United Kingdom.
2. Get to Know Your Customers
Every entrepreneur is out there to solve a need that customer greatly desire. And the moment you understand what your customers need it becomes easy for you to think through their tastes and preferences. It is, therefore, vital to investigate or research more about your target market as a guide to start a business in the United Kingdom. If it takes you to interview your potential customers to test whether your product or business idea creates interest or not, you better do so. You can select a group based on a particular attribute—age, career, and gender—that you think matches your target clientele.
3. Research the Market
The moment you understand your industry and competitors, it shapes your business structure, pricing, customers demographics and resources. Getting aware of what your competitors in the industry do through research will in some way reveal the gap in the market that your business can fill. This would mean going through their service system, pricing, and see what you can offer differently. Learn from your competitor’s mistakes and carving your own path from their successes.
4. Evaluate Your Finances
As you think through on how to build your business, have a clear financial plan. Before you decide to seek finances from lenders to start a business in the United Kingdom, you must show how you plan to use the money and the sustainability of your business venture. Have projections or a roadmap that indicates how you’re to scale upwards. In the beginning, the target should be to keep costs at minimal levels and spend only on essential things that are likely to result in more sales. In the UK, you may opt for Small Enterprise Investment Scheme (SEIS) that’s more affiliated with startups businesses that have been trading for less than two (2) years.
5. Seek Assistance Starting a Business
It may sound vague, but it’s important to get proper help from business experts before plunging into any kind of business in the UK. From mentoring networks to government schemes you can get advice on where to invest in, which lending institution to seek finances and other business solution services. Starting a business and seeing it through may be cumbersome especially for a startup. Learning from the best is the gateway to succeeding in any business.
Follow Through on Why People Start Home-based Businesses in the United Kingdom
Now owning a business in the UK does not mean renting commercial space, or managing employees. It means more than that as several people are unraveling ways to use remote work to pursue entrepreneurship right at the comfort of their homes. In today time and age, technology accords us the luxury on how and where we work, and home-based businesses come in a range of forms in the UK.
With That in Mind, Why Do People Start Home-based Businesses in the United Kingdom?
1. Flexible Work/ Life Balance
It emerges that working from home gives the flexibility to venture into your interest/passion and ideal to spend time with the young ones if you’re a mother or a retiree, for instance. In fact, the rate of people who start home-based businesses in the United Kingdom is in the ascendancy lately. Working from home means you can schedule your time during the day and still involve in other things.
2. Fewer Overheads
If you plan to start a business in the United Kingdom that has fewer overheads costs, think of a home-based business. The facts are that the cost of running a home-based business is incomparable with a retail shop. Some of the home-based businesses like franchises are mobile—think of a coffee van or a dog walking business or consultancy services—you can operate from anywhere. The initial outlay is minimal, and you stand to enjoy an easy and fairly quick way of setting up a business.
3. A Method of Testing the Market
With stories about many startup businesses failing before their second year of growth, many aspiring entrepreneurs may be skeptical about rolling out fully. Entrepreneurs now tread carefully by averting taking that bold move and opting to first experiment the market before going out there. By testing your home-based business, you can identify and understand more about the services/products you’re offering, for example, is it appealing or does it need improvement? In some way, you’ll be learning through the process and eventually having it easy when the time of launching comes calling.
4. Flexible Regulations
To run a home-based business in the UK, just like any other business, it must be licensed. In case you want to make significant changes to your property, you must seek planning permission. It follows that you must inform the HM Revenue and Customs or register with Companies House whether it’s simply a small sole-trader business or part-time business. The employment law requires that all earnings are declared and tax remitted. Remember to include some element of home insurance in your business and inform your mortgage provider or landlord.
