Starting a business will involve a number of steps, including choosing your business name and structure.
Choosing a business name will involve checking whether the name is available by searching on the Companies House name availability checker. You should also check the UK Intellectual Property Office’s Trade Marks Register to ensure that the proposed name does not infringe an existing trade mark. Running these searches is a quick way to ensure your proposed name has not already been registered and could protect you from future potential name infringement issues.
Choosing a business structure will be a matter of weighing up the advantages and deciding whether these outweigh the downsides of each particular option. Whether you operate as a sole trader, partnership, private limited company (LTD) or limited liability partnership (LLP), your choice of business structure is a commitment that will affect the amount of tax you and/or your business will pay and determine whether you are eligible for certain tax reliefs and grants.
Considering all options from the get-go to decide which is best for you will most certainly save you time and money in the long run as your business grows.
Read How to set up your business for more information.
The first thing to do when putting a business idea into practice is to write a comprehensive Business plan. Not only will writing a business plan help you to achieve your long term goals but doing so will also help you:
develop a roadmap for your future business as it will make you think clearly about what you are going to do and when you are going to do it
examine your target market and how to fit into it and above all stand out
remain committed to financial expenses and long term goals
discover whether your business is financially practical
reveal any gaps you may not have thought about
For more information, read What is a business plan.
There are lots of different types of funding available for your new business. The type of funding most suitable will depend on factors such as the amount, your business structure and how long you need the funding for.
Types of funding include:
loans (eg bank and family loans) - this is credit, usually, in the form of cash, that is borrowed and repaid over an agreed length of time
investment finance - this involves selling company shares to an investor or investors who will take a share of the profits and losses the company makes
crowdfunding - this involves lots of people investing, lending or contributing to your business (usually via an online platform), to reach a certain target
grants (eg government grants) - this an amount of money given to a business for a specific project or purpose
overdrafts - this is a credit facility agreed with your bank, allowing you to temporarily spend more than you have in your account to cover short-term financing needs
invoice financing - this is a short-term finance option where a third party financier buys your unpaid invoices for a fee
There are a number of legal documents your business may need, and these will depend on the specifics of the business. These include:
Founders’ agreements - setting out the relationship between the founders of an LTD
Term sheets - setting out the terms of a business investment
Articles of association - setting out how an LTD is to be run and administered
Partnership agreements - creating a business partnership
LLP agreements - entering into an LLP
Shareholders' agreements - agreeing on key issues with other company shareholders
Employment contracts - to hire employees
Confidentiality agreements - to protect your business ideas
Terms and conditions - to set out a business’ general terms and conditions
Services agreements - to set out the terms for the supply of services between businesses
Distribution agreements - to appoint a distributor to expand the reach of a business’ products