How to Open a Business in the UK
Date : Jul 06, 2021
Author : DR Armed Zayed
Categories : Business Tips
So you are thinking of how to open a business in the UK. Starting your own business is one of the surest ways to financial freedom. However, a business is more than a job, and it requires much more from you. If you are starting your own business in the UK, it is important that you know exactly what is involved.
Starting a new business in the United Kingdom is a bit daunting. Nevertheless, more than half a million new businesses start up every year in the UK, and the majority of them are highly successful and profitable. In this guide, we will share some tips with you on opening and running a business in UK.
Tips for Starting Your Own Business in the UK
Starting up and running a business in the UK involves many tasks, which is why it is important to know what you want as well as the processes involved. Here is everything you need to know on how to open a business.
1. Work on Your Business Idea
On your quest to start your own business in the United Kingdom, the first thing you need to do is to get your business idea right. Without a business idea, there would be no business to start. The business idea can be about a new product or service. It can also be about providing products or services that are better and more affordable than competitors.
You need to brainstorm and come up with great business ideas or improve the business ideas of others. For instance, if you are thinking of how to open a hair salon business in the UK, this is a great idea as everyone needs to get their hair done. However, you will need to think of ways to make your hair salon unique, and stand out from other hair salons.
It is difficult to get a brand-new business idea out of the blue, which is why many people struggle to get great concepts to build their brand or business around. If you are in this category, the best thing you can do is to brainstorm many ideas.
Almost all businesses and companies today have some sort of online presence, so you need to keep this in mind when brainstorming your ideas. Many things are now being done online, and creating your business without that in mind might send you out of business in the next couple of years. Research has shown that 77 percent of internet users in the UK made a purchase online, so it is important to create a business that will change with the current trend of the world.
2. Assess Your Situation
The next thing you need to do is to assess your situation. This is where you need to consider if you have the flexibility or time required to start your own business in UK. Will you run the business part-time or full-time? Will the new business be suitable for your commitments and family? With the right answers to these questions, you will have a clearer view of the kind of business you want to start.
As we said earlier, starting a new business in the UK is not easy, as it requires a lot of resilience, hard work, and time. As such, you need to assess your situation and be realistic about it. If you are not able to dedicate all of your time to the business (maybe you are engaged with other things), you might have to employ someone to handle some parts of your business for you.
3. Writing Your Business Plan
Without adequate planning, it would be almost important or very difficult to achieve anything, and the business world is not an exception. You need to write a comprehensive plan for the first few years of your business. This plan will include your strategies as well as your marketing plan.
It is important to plan your business because it will help you know some vital things you need to run the business, such as how much you will need to charge, the number of customers you will need, as well as the growth rate of your business.
When planning your business, you should also outline your target audience and describe the market. Do not forget to list out your competitions also. Other things you should plan include your production costs, pricing, ads and marketing expenditure, running costs, and more. Analyzing all of these will help you get a rough estimate of your profits.
With the adequate planning of your business, you will be able to foresee potential pitfalls. Creating a detailed business plan will help you to succeed where many startups have been failing.
4. The Name of Your Business or Company
After brainstorming on the business idea and writing a great business plan, the next thing you need to do is to get the business name. Finding a great name for your business or company is essential, as it will help you to stand out while showing the personality of your brand or business.
The name of your business should be unique, which means you have to be creative. It should also be appealing to your target audience. When crafting your business name, you also need to think of your online presence. The name of your business should be easy to recall, and it should be something that people are looking for online. Hence, you would need to host your business online and create a business site too.
5. Market Research
Whether you are starting with a brand new business idea or you are improving on the ideas of others, you would have a target market or audience. If you want to stay ahead of your competition, then market research is essential.
Market research will help you to understand your rivals, target audience, target market, as well as your industry. Extensive research of the market will have a significant impact on your business structure, customer demographics, resources, and pricing.
You need to find out from your target audience if your business idea or product creates interest. Asking people you do not know is better, as you would get much better responses and honest results. Carrying out extensive research on your target audience, rivals, and industry will significantly increase your chances of succeeding, as the results of your research will make your business model more feasible.
6. Choose a Legal Structure
The next step in your quest on how to open a business in the UK is to choose a legal structure. You will need to choose a legal structure for your business from the following:
- Sole Trader: This is the simplest and cheapest legal structure for a business. After starting your business in the UK, you would need to register with HM Revenue and Customs.
- Partnership: This is the right business structure for those that want to start a business or company with business partners or partner.
- Limited Liability Partnership: This is like a business partnership but with a limited liability company.
- Limited Company: This business structure is complex, and it has many admins. However, it helps to legally distinguish you from your business.
You need to consider the legal business structures above and choose the one that is best for your business.
7. Manage Your Finances
After choosing a legal structure for your business, the next thing you need to do is to assess your finances. In addition to requiring a lot of time and effort, starting up your own business in the UK requires a lot of money too. You should assess your funds and make sure you avoid overspending.
Try to keep costs at a minimum and release funds for only important things. You need finance to start up a business in the UK. If you are a resident of the United Kingdom, you can get a business loan from a bank. You can also look for other ways to raise funds, such as through family and friends. You can also rely on angel investors for funds.
8. Get Compliant and Get Help
When all is set and done, you want to make sure you satisfy all regulatory issues such as licensing, health & safety, data protection, and more. The UK government has also outlined some tools to take you through this process. Seek guidance and advice in starting and running a business in UK. You can also talk to business mentors who have been in business for some time.
Frequently Asked Questions
How to start a company in the UK?
Starting a company in the UK involves few simple steps, which include getting the name of your company, registering the company, completing all legalities, choosing the business structure, planning, and setting up an online presence.
How to set up a business in the UK?
To set up a business in the UK, you would need to check for the legality of the business, write the business plan, choose the business structure, choose the business name, register the business, assess your situation and finances, and get all the professional help you can.
Can a foreigner start up a business in the UK?
Yes, a foreigner can open a business in the UK. The process for registering a business is the same for UK residents and non-UK residents.
With the tips provided in this guide, you can open a business in the UK without any issues. Starting your own business is a great idea, as this would help you to serve people much better, solve some issues many are facing, and more while making money off it.