What do you need to set up small businesses in the UK?

There are a number of steps that you need to take to set yourself up as a small business. If you are an entrepreneur or a small firm you can start as a sole trader. Here are some top tips:

Register with HMRC as self-employed.

The easiest way to do this is to become a sole trader and register for a self-assessment tax return. You can do this online if you have a Unique Taxpayer Reference (these can take up to ten working days to arrive so send off for this first.)

Take out business insurance.

For start-up ventures and small businesses you will probably need to take out public liability insurance. Look at comparison websites to get a good deal. If you plan to take on employees, you will also need employers’ liability insurance.

Small businesses need a strong name.

Check with Companies House to see if your name is available. Once you have a name that complies with the guidelines, you should check to see if the web address is available. It’s important to choose something that customers will be able to find on search engines.

Set up a business bank account.

A separate account is not strictly required if you are a sole trader but it will help you to keep your business and personal finances separate. There are lots of specialist bank accounts available for small businesses.

Become compliant.

Check out the guidelines for small businesses at gov.uk and get up to speed on health and safety, licensing, data protection and other compliances. This does not take long and should be straightforward for most start-ups.

Start accounting.

Start keeping accounts, or if you prefer, appoint your own accountant. A simple book keeping system will make your work easier later on. Many small businesses use accounting software or integrated online apps to keep track of their financial transactions.

Get a work space.

Whether you are going to be working from home, renting an office or co-working, you will benefit from having a designated business space. Small businesses that require premises for the public to visit will need to budget for business rates.

Do all small businesses need an office?

These days a lot of small businesses in the UK can operate almost entirely online. Even if you don’t need a physical space for your customer to visit, you will still need somewhere to work. Take into account your personal circumstances and consider how you will manage your needs as a business owner. You should be able to find out about business rates in your area from your Local Authority. If you plan to work from home you should take into account the following:

• Business costs as a percentage of household bills.
• The possible implications for Capital Gains tax if you are going to use a room or part of a room in your house as an office.
• If you are expecting customers to visit you at home, you might require planning permission.
• If you rent your home, check to see if running a small business from the building is allowed in the terms of your lease.

More and more co-working spaces are opening up, and these particularly appeal to people who can work online or from a laptop most of the time. Look for local spaces where you can rent a desk for a few hours at a time or perhaps share an office with other small businesses owners and entrepreneurs. Co-working can be a great opportunity to form a business network and to overcome the isolation of working from home. Having some fellow workers with small businesses around to keep you company can be a great boost to morale and sharing the costs of facilities is a smart move when you are just starting out.

Small businesses need a business plan

All small businesses are advised to write a business plan, even if it is only for the use of the small business owners themselves. Having a firm plan will help with finding your customer base, it will help you form a marketing strategy and it will force you to make projections about your turnover. Small businesses operating in a competitive industry need to stand out and offer their customer something unique. Small businesses can be very hard work and require entrepreneurial spirit and commitment.