A great deal has been written about the importance of immigrant workers in the UK. The UK is also very entrepreneur friendly, which leads to many moving to the country with the express purpose of starting their own business. These small and middle-sized businesses (known as SMEs) play an important role in the economic health of the UK.
It is fairly easy, fast, and inexpensive to start a business in the UK. The basics rules, guidelines, and resources apply across virtually all businesses, whether online or tradition, or if it selling a service rather than goods.
Determine Start-up Costs and Raise Capital
One of the most important parts of starting a business is making sure that you have enough money to get your company started. Under funding is a prime reason for why many businesses do not succeed. When looking at what you need to start, keep your costs low. Be sure to eliminate items that would be nice to have but are not necessary, especially if those items will put any strain on your business. The Gov.UK website has a list of groups which invest in businesses and other financial resources for SME.
Decide on the Type of Business
All businesses in the UK must be registered with one of four business structures.
- Sole Trader – Most new businesses are set up as sole traders. Set up is fast and there are no fees. Most sole trader businesses are in the service industry. Being a sole trader does not mean that the business cannot hire employees.
- Partnership – A partnership means that any duties are divided amongst the partners and that profits and expenses are shared. Partnerships are easy to set up. A partnership structure is often the second stage of growth for a sole trader business. Partnerships are subject to Class 2 National Insurance contributions of £2.75 per week if profits are over £5,885.
- Limited Liability Company (Ltd) – This business structure is more complex than that the previous ones. They involve a great deal more paperwork and red tape. Limited Liability companies enjoy a favourable tax rate and offer a great deal of financial protection for the company principals. Registration can be done online and costs £15.
- Limited Liability Partnership (LLP) – The LLP structure is the newest option available in the UK. An LLP is basically a hybrid of an Ltd and a traditional partnership. Most LLPs are especially well suited for service type businesses.
Develop a Business Plan
Business consultants and advisors state that the most important aspect of starting a business is writing a well thought out business plan. Basically, a business plan is the equivalent of having a blueprint for building a house. Business plans need to be very detailed and should cover every aspect of the business. The plan should include all relevant financial data. The strategies for growing and marketing the business during every phase have to be included. Good business plans include benchmarks to help keep the company on track. Gov.UK has some well written business plan templates as does Prowess, a company that works with women in business.
Ensure you are Compliant
All businesses in the UK are required to have business insurance. Links to the types of insurance offered and a search tool for business insurance may be found at British Insurance Brokers’ Association (BIBA) website. Likewise there are a number of government regulations and schemes for many types of businesses. You can check for any required permits and regulations at Gov.UK.
Obviously always remember, that TransferGo is offering a really helpful product for all SME’s to manage the payments to their providers and cut down costs. Find out more here