Technology has evolved and introduced key solutions to the business world, even if it did create a few hurdles along the way. However, the landscape it set out is perfect for small businesses, which is evident if you consider that there are now 59% more small businesses in the UK than there were in 2020. This doesn’t mean launching a business is easy by any stretch; it simply means that the tools to do so are more readily available. Below, we’ll tell you how to launch a small business in London.
Decide on a Business Structure
Before doing anything else, you need to decide on a business structure. Each of the three business structures has a unique set of benefits and drawbacks, especially regarding tax regulations and employment. Here’s a summary of each one:
- Limited company. A limited company is separate from its owner, meaning the owner is “employed” and paid a wage. This is split into two categories – limited by guarantee or limited by share.
- Partnership. Two people running a business – an alliance of sole traders where each party share risk and reward.
- Sole trader. Simple structure, designed for people with zero plans to employee people – think private contractors.
Work Out Costs Against Budget
Starting a business in London isn’t cheap, but the total cost will depend on the type of business and the end goals. The expenses of starting a business typically include a business property (unless remote operation), staff wages, HR, marketing, securing licenses and so much more. A study by Geniac found that the average business spends £22,756 to cover the essential business costs, and that’s before factoring any additional purchases over the top.
With this in mind, you’ll need to work out your starting budget and start thinking about securing financial support to keep you afloat until trade picks up.
A Unique Selling Point
Your business needs to have that winning element to draw customers in – a unique selling point (USP). A USP doesn’t have to be a service or product, it could be that you offer all new customers a 30% discount.
Write a Business Plan
A business plan is your chance to codify your business. This document will include your company values, goals, costs, projections, financial sources, and market research. Writing a business plan is important because it will keep you grounded during the startup phase and it will show potential investors that you’ve done your homework.
Talent Acquisition and Management
You need to find a cost-effective way to source talent. Getting set up on social media channels, especially LinkedIn is a great way to do this for very little cost. Alternatively, you can get in touch with recruitment agencies and start posting your ads on sites like Indeed.
Once you’ve hired talent, you’re going to need to manage them effectively, which means having a functional HR department. However, as a startup business, your funds will be limited. Therefore, you can outsource your HR needs to a reputable third-party company like HR Dept in Sutton.
Business Banking and Insurance
You will need to open a business bank to trade from, even if you’re a sole trader. Even though you can theoretically trade from a personal account, your bank may block the account if they notice unusual activities, like large business transactions. Additionally, when it comes to filing taxes, separating funds within your account will become complicated.
After putting in months of hard work and investing cash in your business, you have to protect your assets. The best way to do this is to take out appropriate business insurance – you can learn about the different types here.
Trademarks and Web Domains
During your startup phase, you’ll need to secure a web domain to avoid disappointment – make sure it’s short and relevant to your business. As well as this, you may want to apply for any trademarks, as these can take a while to process.
Social Media and Website Building
With your business registered with Companies House and your domain name secured, you’ll need to build your website. If you only have funds for a basic site to begin with, that’s more than acceptable, as you can grow in the future. You will also need to start social media channels to let your potential audience know you’re there.
Starting a business can be relatively straightforward, especially if you follow the roadmap above and make sure you put enough hours into research and planning. Remember, you don’t need to hire someone for every potential position, as you can outsource a lot of tasks.