Steps to follow
Start small, think big. Keep your expenses as low as possible, but leave yourself scope to expand. On the other hand, don’t choke off possible growth by scrimping on something important, like marketing or the look of your shop-front. Always ask yourself: can I do this cheaper and get the same results?
What is your USP? How do you separate yourself from the competition? Can the market support another business? Research always pays off.
Choosing a name can be tricky. You want something that stands out, is memorable and perhaps associated in some way with what your business does. If it starts with ‘A’ then it will come to the top of the list when people search online or in the telephone directory! If you are a limited company, it should contain the words Limited or Ltd at the end. It cannot imply a connection with government, be offensive, use certain sensitive words or expressions, and cannot be the same or similar to any existing registered companies. You can search the index of business names already registered at Companies House website free of charge.
How are you going to fund it? You may be eligible for grants from regional development agencies and other bodies. You will have to produce a convincing business plan to get a loan from a bank. You may also want to consider business angels, venture capital and asset-based finance.
Are you on top of your financial requirements? Rates, thresholds and fees change annually so make sure you’re up-to-date. You may incur a penalty if you use the wrong rate or allowance for the relevant tax year.
You will need to file returns, including income tax, national insurance, capital gains tax, corporation tax, VAT and employee’s pay and national insurance.
Will you need to employ staff? Familiarise yourself with the basics of employment law—health and safety, grievance procedures, sick pay, maternity leave, dismissal and discrimination—or hire an expert to do this for you. Remember that temps and freelancers have employment rights as well as permanent staff.
Have you fulfilled all health and safety requirements? You no longer need to register a new business with your local authority or the Health and Safety Executive, but you may have to register under other regulations, for example, if you are a catering business or use dangerous materials.
Do you need a licence to trade? You do if you deal with waste, firearms or hazardous substances. These are just a few examples.
Have you complied with all relevant environmental legislation? What these are will depend on the nature of the business.
Do you have adequate insurance? What is the weakest link? Who are your suppliers? What if they go bust overnight? You will need employer’s liability insurance, and may also want to consider public liability and product liability insurance.
Is your packaging and labelling compliant with all the relevant laws? Are your adverts misleading in any way? Does your packaging include all relevant information?
If you are a services provider, you will have to comply with the Provision of Services Regulations. These require you to give customers certain information from the outset, for example, information on how to make a complaint.
Are you protected from copycat traders? See an intellectual property lawyer or trade mark attorney and secure all relevant patents, design rights, copyright and trade marks. Ask about the scope of protection.
What to watch out for
Are you protected against fraud, identity theft and other business crimes? These are a rising threat in the UK, so be vigilant and seek expert advice on prevention.
Solicitor’s top tip
Do you process personal information? If so, you must comply with the requirements of the Data Protection Act. This sets out eight principles of information handling. You must, for example, tell individuals what you will use their personal information for, and not pass on that information to others without their consent.
Buying or selling a business
Buying or selling business premises
Company filing requirements
Overview of commercial agreements
Overview of insurance for business
Renting a business property obligations on a commercial tenant
Types of businesses
Which businesses require licensing