Starting a business in the UK can be an exciting and challenging venture, but it requires a clear plan and a lot of hard work. From choosing your business idea to marketing your products or services, each step in the process requires careful consideration and attention to detail. In this guide, we will provide you with a comprehensive overview of the key steps involved in starting a business in the UK in 2023.
Whether you’re an aspiring entrepreneur or a seasoned professional looking to start a new venture, this guide will provide you with the knowledge and resources you need to succeed. Let’s get started! Rebel Business School is here to help you in this process, we have events running all around the UK, so you can see if there’s any near to you here, become a rebel.
Choose your business idea
The first step in starting a business is to choose a business idea. Look for a gap in the market or an opportunity that you can take advantage of. Do some market research to determine whether there is a demand for your product or service. A good place to start is to look at what you enjoy, are you into rock climbing? Or maybe you love music, and starting a business around your interests is always a good place to start. Another good place to start is to look at some startup business websites like Startups, Indie hackers or blogs like these. https://www.karllhughes.com/posts/startup-website.
Choosing a business idea is a critical step in starting a successful business in the UK. Here are some steps you can take to choose the right business idea:
- Identify a gap in the market: Look for an unmet need in the market that you can fill. This could be a new product or service that people want but can’t currently find.
- Solve a problem: Think about common problems that people face and how you could solve them. For example, if you notice that people struggle to find high-quality vegan food, you could start a vegan restaurant.
- Leverage your skills and experience: Consider your skills and experience and how you could use them to start a business. For example, if you’re an experienced marketer, you could start a marketing consultancy.
- Do your research: Once you have a few business ideas, do some market research to determine whether there is a demand for your product or service. Look at your competitors and identify areas where you could differentiate yourself.
- Test your idea: Before you invest a lot of time and money into a business idea, test it out to see whether it’s viable. This could involve creating a prototype, offering a small-scale service, or conducting a survey.
- Consider your passion: Starting a business requires a lot of hard work and dedication, so it’s important to choose an idea that you’re passionate about. This will help you stay motivated and committed to your business over the long term.
- Assess the financial viability: You’ll also want to consider the financial viability of your business idea. Look at the potential costs of starting and running your business, as well as the potential revenue streams.
Remember that choosing a business idea is just the first step in starting a successful business. Once you’ve chosen an idea, you’ll need to develop a business plan, secure funding, and navigate the legal and regulatory requirements of starting a business in the UK.
Research your idea
Researching your business idea is a critical step in starting a successful business in the UK. If you don’t put the time into this before you start you might find that it’s been done before a million times or you might miss something important. Here are some tips to help you research your idea:
- Identify your target market: Determine who your target customers are and what their needs and preferences are. Look at demographic data and consumer trends to gain insights into your target market.
- Analyze your competition: Identify your competitors and analyze their strengths and weaknesses. Look for gaps in the market that you can fill, and think about how you can differentiate yourself from your competitors.
- Conduct market research: Use surveys, focus groups, and other methods to gather data about your target market and its needs. This can help you refine your business idea and identify areas for improvement. A great place to create forms and gather data is Google Forms, this is a free platform where you can create a questionnaire or survey and then analyse the data after.
- Assess the financial viability: Determine the potential costs of starting and running your business, as well as the potential revenue streams. Look at the market size and potential demand for your product or service, and calculate your expected profit margins.
- Consider the legal and regulatory requirements: Understand the legal and regulatory requirements for starting and running a business in the UK. This may include registering your business, obtaining licenses and permits, and complying with tax and employment laws.
- Evaluate the risks and challenges: Identify the potential risks and challenges associated with your business idea. Think about how you can mitigate these risks and develop contingency plans in case of unforeseen circumstances.
- Test your idea: Once you’ve done your research, test your business idea on a small scale to see how it performs. This could involve creating a prototype, offering a small-scale service, or conducting a trial run.
The below image is a great example of how you can do some competitor research.
How to do competitor research on a business
Competitor research is an important part of starting a business in the UK. It helps you understand your market, identify your competition, and develop a strategy for standing out from the crowd. Here are some steps to help you conduct effective competitor research:
- Identify your competitors: Start by identifying your main competitors in the UK. Use online search engines, industry directories, and social media to find businesses that offer similar products or services to yours. Make a list of your top competitors, and take note of their strengths and weaknesses.
- Analyze their products or services: Take a close look at your competitors’ products or services. What are the features and benefits? What sets them apart from yours? Consider pricing, quality, and customer service. Look for areas where you can differentiate yourself from the competition.
- Study their marketing strategies: Analyze your competitors’ marketing strategies. How do they promote their products or services? Which channels do they use? What kind of messaging do they use? Look for ways to improve your own marketing efforts and differentiate yourself from the competition.
- Assess their online presence: Check out your competitors’ websites, social media pages, and other online profiles. How do they present themselves? What kind of content do they post? How engaged are their followers? Look for opportunities to improve your own online presence and engage with your target audience.
- Monitor their performance: Keep track of your competitors’ performance over time. Follow their social media accounts, subscribe to their email newsletters and monitor their website traffic and search engine rankings. Look for patterns and trends, and adjust your own strategy accordingly.
Remember that competitor research is an ongoing process. Keep monitoring your competitors and adjust your strategy as needed to stay ahead of the game in the UK market.
Another great tool to research your competitor is SEM Rush, this allows you to look at a websites traffic to find out what keywords they rank high for. You can use this information to figure out a number of things. Who they are targeting, what pages/ services do the best, who their competitors are and more.
Remember that researching your business idea is an ongoing process. Stay up to date on market trends and consumer preferences, and be prepared to pivot your business strategy if necessary. By doing your due diligence and thoroughly researching your idea, you’ll be better equipped to start and run a successful business in the UK.
Decide on your business structure
The next step is to decide on your business structure. You can choose to set up as a sole trader, partnership, or limited company. Each structure has its own benefits and drawbacks, so it’s important to choose the one that’s right for you.
Deciding on your business structure is an important step when starting a business in the UK. The structure you choose will determine how your business is organized, how you pay taxes and your personal liability for business debts. Here are some common business structures in the UK:
- Sole trader: This is the simplest and most common business structure in the UK. As a sole trader, you are self-employed and responsible for all aspects of your business. You keep all the profits, but you’re also personally liable for any business debts. Find out more about becoming a sole trader in the UK from the Government website here.
- Partnership: A partnership is a business owned by two or more people. Partners share the profits and losses of the business, and each partner is personally liable for the business debts. Find out more about setting up a partnership with the GOV.UK website
- Limited liability partnership (LLP): An LLP is a type of partnership where the partners have limited liability for the business debts. This means that each partner is only liable for their own actions and is not responsible for the actions of other partners. Find out more about limited liability partnerships on the GOV.UK website
- Limited company: A limited company is a separate legal entity from its owners. The company is owned by shareholders, and the directors are responsible for running the business. The shareholders’ liability is limited to the amount they have invested in the company.
- Community interest company (CIC): A CIC is a special type of limited company that is set up to benefit the community rather than shareholders. CICs are required to reinvest profits back into the community.
- Buying a franchise: If you want your own business but don’t want to start from scratch you can start a franchise. This is buying a license from an already established business so you can sell under their name and brand. You can start a franchise for many popular brands like Costa, Subway, Mcdonalds and more. To find out more about franchising visit the British Franchise Association’s website
When deciding on your business structure, consider factors such as the size of your business, the level of personal liability you’re comfortable with, and your tax obligations. You may also want to consult with a lawyer or accountant to help you choose the right structure for your business.
Once you’ve decided on your business structure, you’ll need to register your business with Companies House (if you’re setting up a limited company) and HM Revenue & Customs (HMRC). You may also need to obtain any necessary licenses and permits for your business, depending on the industry you’re operating in.
Creating a website and branding
Creating a website and developing your brand are important steps in starting a business in the UK. Here are some tips to help you get started:
- Develop your brand: Your brand is the visual representation of your business, and it’s important to develop a strong and consistent brand image. Consider your target audience, your brand values, and what sets your business apart from the competition. Work with a graphic designer to create a logo, colour scheme, and other brand elements that reflect your business identity. If you are on a budget then using a free platform like Canva is great to start. Make sure you do some research into your competitors so you know what you are up against and you’re not accidentally copying them.
- Create a website: A website is essential for any business in today’s digital age. It provides a platform for customers to learn about your business, view your products or services, and make purchases. Consider working with a web designer to create a professional and user-friendly website. Make sure your website is mobile-friendly, easy to navigate, and optimized for search engines. There are some free options for those just starting out, platforms like Wix and Weebly offer websites but you need to use their domains. Domains can be very cheap, platforms like Names.co.uk offer a free domain for the first year.
- Use social media: Social media platforms such as Facebook, Instagram, and Twitter are powerful tools for promoting your business and engaging with customers. Develop a social media strategy that aligns with your brand values and target audience. Create regular, engaging content and interact with your followers to build a loyal customer base.
- Build your online presence: In addition to your website and social media, there are many other ways to build your online presence. Consider listing your business in online directories, creating a Google My Business profile, and using online advertising to reach new customers.
- Monitor and analyze your results: It’s important to regularly monitor and analyze your online performance to identify areas for improvement. Use tools such as Google Analytics to track website traffic and user behaviour, and adjust your strategy as needed to improve your online presence and drive business growth.
There are a lot of resources online to help you create a website, the easiest way to do it is by using a website creator tool. You can read more about the best website builders here.
Remember that your website and branding are key components of your overall business strategy. Take the time to develop a strong brand identity and user-friendly website, and use online marketing tools to reach new customers and grow your business in the UK.
Register your business
Once you’ve decided on your business structure, you need to register your business. If you’re a sole trader or partnership, you’ll need to register for self-employment with HM Revenue & Customs. If you’re setting up a limited company, you’ll need to register with Companies House.
Registering your business is a critical step in starting a business in the UK. Here are some key considerations and steps to follow:
- Choose a business structure: Before you can register your business, you need to choose a legal structure. The most common structures in the UK are sole trader, partnership, limited liability partnership (LLP), and limited company. Each structure has its own advantages and disadvantages, so it’s important to choose the one that’s right for your business.
- Choose a business name: Your business name should be unique and not already in use by another company in the UK. You can check the availability of your chosen name using the Companies House name checker tool. It’s also a good idea to check that your chosen name is not already trademarked.
- Register with Companies House: Once you’ve chosen your business structure and name, you need to register your business with Companies House. This is the UK government’s official register of companies. The registration process varies depending on your business structure, but typically involves filling out an online or paper form and paying a fee.
- Register for taxes: Depending on your business structure, you may need to register for various taxes, such as VAT, income tax, and corporation tax. You can register for these taxes through HM Revenue & Customs (HMRC).
- Obtain any necessary licenses or permits: Depending on your business type, you may need to obtain certain licenses or permits to operate legally in the UK. For example, if you plan to sell alcohol or operate a food business, you may need to obtain a license from your local authority.
- Set up a business bank account: It’s a good idea to separate your personal and business finances by setting up a separate business bank account. This will make it easier to track your business expenses and income.
Registering your business can be a complex process, so it’s a good idea to seek professional advice from an accountant or solicitor. They can help you choose the right business structure, navigate the registration process, and ensure that you comply with all relevant laws and regulations in the UK.
Choose a business name
Choosing the right business name is an important step when starting a business in the UK. Sometimes this step can take entrepreneurs a long time to decide because it’s the first thing people will see. If you can’t think of anything then there are free online business name generators like Shopify’s which you can access here.
Here are some factors to consider when choosing a business name:
- Make it unique: Your business name should be unique and distinguishable from other companies in the UK. You can check the availability of your chosen name using the Companies House name checker tool.
- Make it memorable: A memorable business name can help your business stand out in a crowded marketplace. Choose a name that is catchy, easy to remember, and reflects the nature of your business.
- Make it descriptive: Your business name should give potential customers an idea of what your business does. A descriptive name can help potential customers understand what your business is all about.
- Make it easy to spell and pronounce: A business name that is difficult to spell or pronounce can make it harder for potential customers to find and remember your business. Choose a name that is easy to spell and pronounce.
- Consider your target audience: Think about your target audience when choosing a business name. Will they be able to understand and remember your name? Will it resonate with them?
- Check for trademarks: Before choosing a business name, make sure it is not already trademarked. You can check for trademarks using the UK Intellectual Property Office’s online search tool.
- Consider domain availability: Your business name should be available as a domain name for your website. Check the availability of your chosen name as a domain name using a domain registrar such as GoDaddy or Namecheap.
Once you’ve chosen your business name, it’s a good idea to register it with Companies House as soon as possible to protect your brand. Keep in mind that your business name can be changed later on, but this can be a complicated and expensive process, so it’s important to choose the right name from the start.
Get any necessary licenses and permits
When starting a business in the UK, you may need to obtain certain licenses and permits to operate legally. The licenses and permits you need will depend on the type of business you are starting and where it will be located. Here are some common licenses and permits you may need:
- Business license: Depending on your business type, you may need to obtain a business license from your local authority. This is a general license that allows you to operate a business in a specific area.
- Trade license: If you are starting a trade or craft-based business, such as plumbing or electrical work, you may need to obtain a trade license. This is a license that shows you have the necessary skills and qualifications to operate in your chosen trade.
- Food hygiene certificate: If you are starting a food business, such as a restaurant or café, you will need to obtain a food hygiene certificate. This shows that you have the necessary knowledge and skills to handle and prepare food safely.
- Alcohol license: If you plan to sell alcohol, you will need to obtain an alcohol license from your local authority. This license will specify the type of alcohol you can sell and the hours you can sell it.
- Health and safety permit: Depending on the nature of your business, you may need to obtain a health and safety permit. This will show that you have taken the necessary steps to ensure the safety of your employees and customers.
- Planning permission: If you plan to make any changes to the property where your business will be located, such as building an extension or changing the use of the property, you may need to obtain planning permission from your local authority.
To obtain the necessary licenses and permits, you will need to contact your local authority or relevant government agency. The application process can vary depending on the type of license or permit you need, but typically involves filling out an application form, paying a fee, and providing supporting documentation. It’s important to obtain the necessary licenses and permits before starting your business to ensure that you are operating legally and avoid any penalties or fines.
Accounting and software to help
When starting a business in the UK, it’s important to set up an effective accounting system to manage your finances. This will help you track your income and expenses, prepare financial statements, and file tax returns. Here are some steps to help you manage your business finances effectively:
- Choose the right accounting software: There are many accounting software options available, so it’s important to choose one that is right for your business. Popular options include Xero, QuickBooks, and Sage. These software programs can help you manage your finances more efficiently by automating many of the accounting tasks.
- Set up a chart of accounts: A chart of accounts is a list of all the accounts you will use to track your income and expenses. This will help you organize your finances and make it easier to prepare financial statements. Your accounting software should include a default chart of accounts, but you can also customize it to suit your business needs.
- Record your transactions: It’s important to record all your business transactions accurately and in a timely manner. This includes recording all your income and expenses, as well as any bank transactions. You can use your accounting software to create invoices, record payments, and reconcile your bank accounts.
- Prepare financial statements: Financial statements, such as the profit and loss statement and balance sheet, can help you track your business performance over time. Your accounting software should be able to generate these statements automatically.
- File tax returns: As a business owner, you will need to file regular tax returns with HM Revenue and Customs (HMRC). Your accounting software can help you calculate your tax liability and prepare your tax return. You can also use your accounting software to generate reports and supporting documentation to file with your tax return.
Using accounting software can help you manage your business finances more efficiently and accurately. It can also save you time and reduce the risk of errors. If you’re not familiar with accounting software, it may be helpful to take a course or work with an accountant to set up your accounting system and get started.
Set up your workspace
Setting up your workspace is an important step when starting a business in the UK. A well-organized workspace can help you stay focused and productive, and create a professional image for your business. Here are some tips to help you set up your workspace:
- Choose a location: Depending on the type of business you are starting, you may need to choose a location that is accessible to customers or clients. This could be a home office, a retail space, or a shared co-working space. Consider factors such as proximity to public transport, parking availability, and the cost of rent or lease.
- Get the right equipment: Make sure you have all the equipment you need to run your business effectively. This could include a computer, printer, phone, and any industry-specific equipment. Invest in high-quality equipment that will last and save you time and money in the long run.
- Set up your workspace ergonomically: Consider ergonomics when setting up your workspace. Make sure your desk and chair are at the right height and that your computer screen is at eye level. This will help you avoid strain on your neck, back, and eyes.
- Organize your space: Keep your workspace organized and clutter-free. This will help you stay focused and productive, and create a professional image for your business. Invest in storage solutions such as filing cabinets and shelves to keep your paperwork and equipment organized.
- Create a comfortable environment: Make sure your workspace is comfortable and conducive to work. Consider factors such as lighting, temperature, and noise levels. You may want to invest in a good quality chair and desk lamp, and use noise-cancelling headphones to block out distractions.
- Create your virtual workspace: There are tonnes of different software options available, and many of them are free. Google drive has a number of software packages available for free including Google Docs, Sheets and Photos, all are very useful and work great.
Setting up your workspace may require some investment upfront, but it’s an important investment in your business. A well-organized and comfortable workspace can help you stay focused and productive, and create a professional image for your business.
Start marketing your business
Marketing is a critical component of starting a successful business in the UK. It involves identifying and reaching out to potential customers, promoting your products or services, and building a brand reputation. Here are some steps to help you start marketing your business:
- Define your target market: Identify your ideal customer and the demographics of your target market. This will help you create targeted marketing campaigns that are more likely to resonate with your audience.
- Develop a marketing plan: A marketing plan outlines your marketing objectives and the strategies you will use to achieve them. It should include a budget, a timeline, and metrics to measure the effectiveness of your marketing efforts.
- Create a brand identity: Your brand identity includes your logo, brand colours, and other visual elements that help differentiate your business from your competitors. It should be consistent across all your marketing materials, such as your website, business cards, and social media profiles.
- Build a website: A website is an essential tool for promoting your business and reaching potential customers. It should be easy to navigate, visually appealing, and optimized for search engines. You can use website builders such as WordPress, Wix, or Squarespace to create a professional-looking website without any coding knowledge.
- Leverage social media: Social media platforms such as Facebook, Twitter, and LinkedIn are powerful tools for reaching potential customers and building brand awareness. Choose the platforms that are most relevant to your business and create a social media strategy that aligns with your marketing objectives.
- Network and attend events: Networking and attending events are effective ways to build relationships with potential customers and industry peers. Attend conferences, trade shows, and local business events to meet new contacts and promote your business.
- Offer promotions and discounts: Offering promotions and discounts can help attract new customers and incentivize existing customers to make repeat purchases. Consider offering discounts for first-time customers, referral incentives, or seasonal promotions.
Marketing is an ongoing process that requires ongoing effort and attention. Regularly review your marketing plan and adjust your strategies based on the results you are seeing. By consistently promoting your business, you can build a strong brand reputation and attract more customers over time.
Starting a business in the UK can be a challenging but rewarding process. By following these key steps, you can increase your chances of success and build a strong foundation for your business.
First, choose a business idea that aligns with your passions and skills, and conduct thorough research to ensure there is a viable market for your product or service. Then, decide on your business structure, register your business, and obtain any necessary licenses and permits.
Next, create a strong brand identity, including a website and other marketing materials. Conduct competitor research and develop a marketing plan to reach your target audience through various channels, such as social media, networking, and promotions.
Finally, set up your workspace in a way that is ergonomic, organized, and comfortable, and invest in accounting software to help manage your finances.
Starting a business takes hard work and dedication, but with a solid plan and a commitment to your vision, you can achieve success and live the life you want to live! Join one of our rebel business school events today, to learn everything you need to start a business without getting into debt.