Starting a business is a common goal around the new year, or at any time of year. The universal head-scratcher is where to begin.
Whether you’re starting a trades, dining or wellness business, here are a few pointers to get you going.
Read on for the full guide or go to the section you’re most interested in.
- Structure of the business – sole trader, limited company or partnership
- Business plan
- Regulations, certifications and insurance
- Sort your branding and marketing
- Open your business bank account
- Register your business
- Access to funding
- The pitch
Structure of the business – sole trader, limited company or partnership
When it comes to company structure, you have three choices: sole trader, limited company or partnership.
You and your business are one and the same if you’re a sole trader. That means you’re personally responsible for the debt your business incurs. Your business’ income is classed as personal income in your tax return.
Setting up as a sole trader is simple, with fewer financial restrictions. You don’t need to disclose as much info as you would if you were a limited company. It’s also easier to close the business down if your priorities change or you decide it’s not for you.
For a limited company, you can more or less invert the previous points. First off, you and your business are separate entities, meaning that you can allocate shares to any number of people. On the downside, it’s a lot of admin work in exchange for increased tax efficiency and increased flexibility and it’s easier to sell.
There is one other option – partnership. If you have a co-founder, you can club together and have a sole trader-style model for your business. Your income will be treated as your own, as it would as a sole trader, but responsibility is shared between the two of you. Partnerships are generally easier to form than LLPs and have more flexibility within the business models.
Further reading: Should I go sole trader, partnership or limited company? – We explore different types of company formation – sole trader, partnership, limited liability partnership and limited company
Business plan
If you have an idea for a business, the first thing you will need to do is write a business plan. Not only is this essential in order to convince lenders and investors that you are serious, but it should also help you to refine your ideas.
- Ask yourself who the plan is for. If it is for investors, for example, they will want to see clear explanations detailing the proposed return on their investment and timeframes for getting their money back.
- Without market research, no one is going to take your plan seriously. You will need to ensure that the plan includes reference to the market size, its predicted growth path and how you intend to exploit market opportunities.
- Once you’ve completed your plan, show it to a third-party. Feedback from friends and family is useful but try to get from someone with business experience, such as an entrepreneur, an accountant or a consultant.
Related: Eight elements that need to be in your business plan – A business plan is vital for business creation. If you are struggling to write your business plan, we have eight handy tips to help you on your way
Example business plans – Where can I find an example of a business plan?
Regulations, certifications and insurance
The regulations and certifications you will need will depend on what type of business you’re looking to run. If you’re opening a food business, it’s wise to check your local council’s website to see what certifications they require. A Level 2 Food Hygiene certificate is generally seen as the standard.
To use a gym studio for clients or classes, you’ll often need insurance as a pre-requisite for hiring out the studio.
See also:
What insurance do you need for a small business? – From liability insurance to property protection, small business owners must be aware of the measures to enact to protect their company. Here, we look at what cover is out there and which key policies should be considered
Personal trainer business insurance: requirements, extras and restrictions – Personal trainer insurance can be confusing – what do you need and what can you do away with? We cover everything you need to know
Sort your branding and marketing
You want people to be able to recognise your business at a glance and that’s done through branding.
Line up your messaging, your logo and imagery to appeal to your target audience. Make sure your colour scheming and fonts are consistent and will speak to your audience.
Standing out from the competition: five tips to nail your online branding – When you’re making decisions about online branding, it can be tempting to stay safe. Jake Arnos of Vistaprint explains why you shouldn’t
Open your business bank account
It’s not strictly necessary to have a bank account when starting as a sole trader, but it gives you a more professional appearance. It’s likely that the account will come with perks such as a free banking period and an account manager.
There’s also a reduced risk of muddling up personal or business transactions, making life easier at tax return time.
See also: Should I use a personal bank account for my small business? – James Trowell of Coconut explains the implications of using your personal account for your small business banking
Register your business and your company name
You need to register to let HMRC know that they’ll be getting tax returns from you. As a sole trader, you don’t need to register a company, but from November 19, 2025, you must verify your identity with Companies House.
Read more at How do I verify my identity on Companies House?
When it comes to your company name, and apologies for being obvious here, but make sure that your company name doesn’t already exist and to avoid offensive business names. You might want to check available domain names to see if there are any the same as yours. You can find out through an internet domain seller. Get .com as well as .co.uk domains if you can.
Registering a company name – a Small Business guide – Your Small Business guide to registering a UK company name at Companies House
Access to funding
With bank funding no longer easily available, securing finance remains one of the biggest concerns for most start-ups.
Familiar faces
Friends and family are a good place to start when looking for funding, but you should still make a written agreement specifying when the loan will be repaid and any interest payable.
Bank loans
The first port of call for most would-be entrepreneurs tends to be a dead end if assets are lacking. Without collateral, the chances of securing finance are minimal if you’re starting a business.
Government grants
The availability of grants will vary depending on your region and sector. The average amount available is usually around £200, but you may be eligible to apply for more than one.
Using plastic
Many start-ups use credit cards to fund expenses, for items such as travel, stationery, and petrol. This can be a good way to fund the early stages of a business. However, the risks of getting into serious debt – look at the government – are obvious and well documented and don’t forget that interest charges are much higher than other forms of funding.
Charities
If you are between 18 and 30 and unemployed, The King’s Trust offers loans of up to £4,000 for a sole trader as well as grants of up to £1,500 for people wanting to set up a business. This includes a Test my idea grant of up to £500.
Angels
These investors provide risk capital, so-called because – unlike debt finance – they have no security and are last in line for repayment if the company becomes insolvent. In exchange, they will take an equity stake in the company, typically between 10 to 30 per cent. The majority of angel investments will be under £100,000. For more information visit the UK Business Angels Association website.
Responsible Finance – Community Development Finance Initiatives
There are more than 60 of these organisations in the country, which provide loans and support to businesses and individuals. For more information go to the Responsible Finance website.
The pitch
If you are seeking third-party investment, make sure you can talk clearly about what you are trying to achieve with your business and why it is worthy of funding.
- For Alan Gleeson, manager of Palo Alto Software, the most important part of the plan is the summary, usually contained at the beginning. ‘It should have a “wow factor” that entices [your potential investor] to read further,’ he says. Communicate in plain English why you think your idea will work. No one will want to plough through pages of charts, facts and figures.
- You will also need to do a presentation or ‘elevator pitch’ to sell your idea. Keep this succinct, as you’ll only be able to hold their attention for a short amount of time (think Dragons’ Den). It’s important to make a good impression, because they will be investing in you as much as your idea. Practice in front of friends and family, as you’ll feel more confident with plenty of preparation.
Related: Tips on how to pitch to potential business investors – Funding can be key to the success of a business but securing the deal can be daunting. Mark Pearson of Fuel Ventures offers some tips when pitching to investors
For more support, read:
150 UK small business grants to apply for right now – In need of some funding for your small business? These grants should give you a boost, wherever you’re based in the UK
Checklist for going self-employed – a Small Business guide – Deciding to go self-employed is a big step for anyone. Follow this guide to going self-employed and be confident. We’ve got your back
