The idea of starting a new business appeals to many within the UK with seven out of 10 of us considering the idea, according to surveys.
In 2017 there was a four percent rise on private sector business compared to the previous year, taking the total to just over 5.7 million. However, perhaps staggeringly, 80 per cent of new businesses fail within their first 18 months.
There are so many businesses starting up, from a side hustle to a full-time project. But as a huge number are ultimately failing, we’re here to look at the laws you must follow and how to give your business the best chance of success through various methods.
One thing you must do when creating an SME is to register your business. Most owners tend to register as a sole trader, partnership or limited company.
A limited company on the other hand allows you to keep your personal finances separate from your business assets. This too is easy to set up yourself, but many prefer to seek the assistance of a professional figure such as an accountant as there are a lot more reporting and management responsibilities involved.
If you’re going into business with someone else, it makes sense to go down the route of a partnership. This is the simplest way to set up your new business if there are two a more people involved.
Business insurance covers you and your company against any unexpected costs. It doesn’t matter if you run a large multinational company, a small business, or are self-employed, it’s important to find the right insurance for you. For example, Insurances for Dog Walkers will greatly differ from catering insurance or retail insurance, so be sure to properly research your options.
Business insurance protects you against mistakes, damage and legal costs, known as liability insurance. Certain insurances are required by law, such as employers’ liability insurance. This will cover the cost of any injuries or illnesses any employees may suffer due to work. Elsewhere, if your company will be using vehicles, you must have commercial motor insurance, while some professions must also have professional indemnity insurance that has been provided by their professional bodies or regulators.
Cyber insurance and commercial property insurance are two examples of optional policies, but depending on the nature of your business, could well be worth purchasing. If you are going to be working from home, while it’s not a requirement to have business insurance, you should consider updating your home insurance as you’ll need to have the appropriate commercial property insurance.
Licensing is sometimes a section that can be overlooked when a small business is in the process of setting up. Certain small businesses may not require a licence, but you should always check at the earliest opportunity to avoid fines or being shut down before you’ve really began.
There’s also the issue of a licence to play music, sell food or even trade in the street. Use this Gov.uk tool to find out which licences your concept may require.
Becoming an employer
If you intend to hire members of staff, you’ll have to consider several points. Firstly, how much will you be paying? Remember, it has to be at least the National Minimum wage and you must set up their National Insurance payments. It is worth noting here that you’ll be able to claim an allowance to reduce your bill. You must also make sure that they are actually legally entitled to work in the UK, so don’t just presume — be sure to do thorough checks, including a possible DBS check if needed.
Then there’s employment insurance, as mentioned previously, and the need to write up a legally binding statement of employment for any members of staff that will be employed for more than one month. HM Revenue and Customs must also be informed via registering as an employer.
After the legalities have been ironed out, it’s important to correctly advertise your services or business if you want to succeed. A solid marketing plan is crucial in order to outline where you want your business to go and how you can progress. It will look at how much advertising will cost. A great cost-effective way for any local start-up to take advantage of is door to door leaflet distribution.
Research has found that nine in 10 people remember receiving door-drop mail, with almost half confirming that they keep ahold of these leaflets, making it an effective method of advertising if you utilise it correctly. It’s recommended that you keep your content simple, include your business name and logo, telephone number, email address and the service(s) you are offering.
Similarly, newspaper advertisements can be a very cost-effective way to promote your business — if they have been properly written. Make sure you don’t neglect your online presence, either. This is a significant area in advertising at present, and social accounts are a great way to promote your business to your intended audience.
If you are opening a new office space, outdoor banners can direct people’s attention towards your business. These relatively cheap and durable displays can be used outside your workspace and research has found that the majority of a local business’s regular customers live within a five-mile radius of where you are based. This means that each potential customer could see your banner up to 60 times each week.
With so much to think about when you decide to set up your own company, it’s crucial to plan meticulously if you want your brand to be remembered and not end up another failed start-up. By fully researching the above points, you will stand yourself in good stead from the offset.