Once you know what you want to sell, you’re ready to start your business. But what are the other to-dos that will turn your idea into a successful venture?
Here’s the UK’s leading company formation agent, 1st Formations, with the 9 key steps to create a successful small business.
1. Research your market
This step is crucial to find and win customers, so make it one of your first priorities. Decide what market you want to operate in and what customer demographics your business will appeal to. Use surveys and online forums to find up to date statistics on what your customers’ preferences are. If you can, try to speak to customers directly to get more in-depth insights to shape your business around.
Also research your competitors, including the specifications of their service and how much their customers are willing to pay. Check out their websites and shopfronts and think of how you can make your business a more appealing choice.
2. Write a clear business plan
Think of your business plan as your roadmap outlining what your business will do, how it will make profit and how it will scale over time. It should contain your business idea, target audience, products and services, and marketing and sales plans. Add detailed financial projections, including your pricing and profit margins, startup costs and estimates of how much you’re expecting to sell over time.
Writing this all down helps you spot potential problems before they happen, and it shows banks and investors that you’ve carefully planned how you will run your business.
3. Choose the right legal structure
Next, you’ll need to officially set up your business. In the UK, the two most popular options are sole trader or limited company. Here’s a brief breakdown of how they differ legally in terms of financial liability and tax responsibilities.
As a sole trader, you and your business are legally the same, meaning you’re personally responsible for any debts or losses. You pay Income Tax and National Insurance on all profits through Self Assessment. In contrast, a limited company is a separate legal entity, so your personal assets are usually protected if things go wrong. The company pays Corporation Tax on its profits, and you pay yourself through salary and dividends, which are taxed separately, often making this route more tax-efficient for higher earnings.
If you’re just starting out, a sole trader structure is great for testing the waters. But if you’re planning to grow, want to limit personal risk, or need a more professional image, a limited company might be the better choice. You can set one up in just a few hours using a company formation agent like 1st Formations.
4. Sort out the admin
Once your business is registered, you’ll need to deal with a few essential to-dos. They don’t take a lot of time, so you could try to get them all ticked off in one day. They include:
- Opening a business bank account
- Registering for relevant taxes (e.g. Corporation Tax or Self Assessment)
- Researching and getting business insurance (e.g. public liability, professional indemnity, or employers’ liability if you hire staff)
- Applying for any necessary licences or permits, depending on your industry
You might also want to invest in accounting software or speak to an accountant to help you stay on top of your finances from day one.
5. Build your brand
Your brand determines how people perceive your business. A strong, consistent brand can help you stand out and build trust with your audience.
Think about how you want your logo to look, what brand colours you will use and what your brand’s tone of voice will be. These should be consistent throughout your website, shopfront, social media pages and advertising. Make sure everything feels professional and aligned.
And don’t forget about domain names and email addresses. Using something like info@yourcompany.co.uk will look much more credible than a personal email account, like name@gmail.com or name@outlook.com.
6. Get online
Even if you’re not planning to sell online, having a website is a must. It gives your business legitimacy and helps people find you. Your website should include clear info about what you do, your contact details, testimonials and positive customer reviews once you start selling.
If you’re selling products or services, a simple e-commerce setup using Shopify, Squarespace, or Wix can give your customers a seamless experience. Also, claim your Google Business Profile so people can find you in local searches.
7. Find your first customers
The first sale is always the hardest, but once you get going, it gets easier. To start bringing in customers, try telling friends, family, and local networks. Try to win them over by offering a launch discount or referral bonus.
You can also try running social media ads, joining local Facebook groups or online communities, and partnering with other small businesses to get the word out there.
8. Manage your finances carefully
Cash flow is the number one reason small businesses fail. So, it’s important to track what’s coming in and what’s going out, and always keep a safety net for times where you’re not making as many sales as you expect. Make sure you set aside money for tax from every sale, so you don’t end up with a large, unaffordable bill.
Many small businesses also struggle with late payments, so send invoices promptly and chase your business partners when they take longer than expected. Free or low-cost accounting tools like QuickBooks or Xero can make life easier by automatically keeping track of everything for you.
9. Keep learning and adapting
No business stays the same forever. Keep an open mind and stay curious about your customers and competitors to see how they evolve over time, and don’t be afraid to change things when they aren’t working. You could set monthly or quarterly goals to keep yourself on track towards growth, and hold yourself accountable by partnering with a mentor or other businesses in your industry.
Thinking about starting your business?
Everyone’s journey to building their small business will look different, but by following these 9 steps, you’ll put yourself in the best position to gain customers and scale your new venture.
Let 1st Formations help you get set up with a limited company in just a few easy steps. Go to our website, and we’ll secure your company name and complete all the necessary paperwork on your behalf, so you can spend more time working on your business. Get in touch today.