The First Steps to Creating a Business
Let’s set the scene.
You have a killer idea for a business, an idea which you have researched thoroughly and one that you know either captures a niche segment of a particular market, offers a competitive edge that others in the sector have ignored or has the capacity to be truly disruptive. The only problem you have left is turning that idea into a functional business.
Here, we’re going to look at some of the first steps you need to take towards actualising this idea. Unlike comprehensive guides which can be found elsewhere online, our aim is to highlight the areas which need your immediate attention as well as those steps which have the largest impact on your business to really hit the ground running. The information seeks to be applicable for businesses in all industries, from the dizzying heights of outer space to the sports and cosmetics industries.
Building Foundations
Knowing the parameters of your business idea is an essential part of the start-up process and one that, when done well, can improve your businesses prospects dramatically. Knowing your business includes a detailed understanding of your target audience and the customers you want to eventually attract, a funding plan for your business (of which options include grants, venture capital or loans) and an awareness of the demand for your service or product based on market research rather than intuition. Not only will this look impressive to investors (if you’re going down that route), it will give you a greater understanding of what makes your business stand out from your competitors.
Of course, the best way to jot all this information down would be in the form of a comprehensive business plan, but merely possessing the information is an invaluable asset to your business in its developmental stage. If you’re unsure about the best route, test it out by contacting prospective clients or advertising online with a landing page.
Making It Official
Next, you need to decide on the structure of your business through registration. The options are abundant, however, the choices are made easier by looking at liability. For example, as a sole trader, you would manage and profit from the business alone while incurring all the damages and debt (liability) associated with your business's operation. On the other hand, you might opt to sever your personal liability and go for a limited company structure, meaning that you’re only liable for the capital you put into the business.
The second is by far the most common, and setting it up only requires a visit to Companies House via GOV.UK and costs £12. You will need to have a memorandum and articles of association, simple legal documents which you can write yourself or instruct someone with legal knowledge to write on your behalf. All registration information can be found here. With this stage completed, you can now officially call yourself a start-up!
Protecting Yourself
Succinctly, Intellectual Property is invisible (the legal word is intangible) ‘property’ that has been created by you. Obviously, if your business utilises a truly unique service, process or technology, protecting it from use by others without permission is paramount. In this case, one can apply for a patent from the UK Intellectual Property Office.
If instead you merely want to prevent your name and business logo from being used by others, this falls under trademark law and an application to trademark your ‘brand’ can be obtained here for a fee of less than £200. Furthermore, those businesses who publish material and wish to prevent the redistribution of that material without this permission seek copyright law. Copyright does not require explicit registration, however, there are ‘Fair Use’ provisions and other considerations which can be found here.
It’s a Numbers Game
Finally, all companies by law must send their accounts and reports to Companies House every year, with late submission subject to financial penalty and no submission a criminal offence enforced by the criminal courts. The easiest way to avoid any complication in this area is to hire a chartered accountant. Costing approximately £30 - £140 per month, depending on the complexities of your businesses, an accountant can actually save your business money in the long run and affords you a wealth of financial knowledge at the same time.
OK, so these are some of the most important considerations when it comes to starting a business. If you’d like some of these areas explored in more depth, get in touch on the contact page. Until then, it is hoped that you are at least one small step closer to turning your business from an idea into your reality.
