When you’re thinking about starting your own business, you want to be sure that you’ve got everything in place before you’re ready to take the plunge.
This start-up checklist has everything that soon-to-be sole traders and limited company owners need to know – both before and after registration – to make sure your business is starting off on the right foot.
Working through this business startup checklist will help you prepare everything you need, so when you’re ready to register your sole trader business or limited company, it’ll be fast, easy and stress free.
Our small business check list includes the following steps:
- Write a business plan
- Limited Company or Sole Trader?
- Naming your business
- Registering your company
- Domain names
- VAT registration
- Business insurance
- Employing people
- Health and safety
- Find an accountant
Not all of these tasks will apply to your business, but by going through each one, you can decide what steps you want to put on your own new company checklist. Then you can be completely confident you’ve got everything you need to register your business, and get trading!
The first step when starting a new business is to write a business plan. This is something that banks, suppliers and potential investors may ask to see, but more importantly, it really helps you focus and set down what you want from your business.
Your business plan should include your main objectives, priorities and strategies for the next year or two. Keep it concise and include financial forecasts if you can, how much money you are putting in and/or need to borrow. Include a SWOT analysis of Strengths Weaknesses Opportunities and Threats.
Remember to be honest and realistic.
Write a marketing plan
As part of your business plan, you may also want to think about writing a marketing plan too, to set out how you plan to promote your business and win customers.
Explain what product or service you offer, the marketing advantages and challenges you face and what your competitors are up to. Describe your target audience (age, gender, income bracket etc).
Set realistic marketing goals with specific targets and outline your strategies and tactics (e.g. advertising, direct mail). Include a breakdown of costs.
Now you’ve set out your business plan, it’s time to decide whether you’d like to register as a Limited Company or a Sole Trader – or maybe even a Partnership.
To cross this off your checklist for setting up a business, you’ll need to know all the differences between business structures, so you can pick the right option for you.
But if it’s all feeling a bit complicated, you can always take our quick and easy formation quiz, which asks you a few questions and helps you decide what structure will work best for you. You’ll even get a full Start-Up Report when you’re done that explains all the recommendations in full!
Naming your business can actually be a lot more challenging than you imagine! But naturally it’s one of the first things you’ll need on your company set up checklist.
The naming process may depend on your business structure though, because if you’re setting up a new Limited Company, then not only will you need to pick a name that’s great, it will also need to be unique.
If you’re starting up as a Sole Trader, it’s not quite so restrictive because you’re not registering with Companies House.
Although, a huge number of sole proprietors do still choose a unique name and reserve it at Companies House to protect it from being used by other traders, and in case they decide to change their structure to a Limited Company in the future.
The next step on our company formation checklist – is actually registering your company!
What you need to register a Limited Company
If you’ve decided on a Limited Company formation, you’ll need to make sure you have the following information ready:
- For all Directors, Shareholders, Persons of Significant Control and Company Secretary you’ll need to provide:
- Full Name
- Current Address
- Date of Birth
- A Security Question and Answer
- Share Allocation
- Your unique business name
- A Registered Office address (although you can use a service for this if you like)
You can then register your business with Companies House. You can do this directly online, or you can use a Registration Agent (like us!), who can usually offer you additional services beyond just registration.
What you need to register as Self Employed
If you’re registering as a Sole Trader, or Self Employed, you’ll need to get a Unique Taxpayer Reference (UTR) from HMRC.
If you already have one of these – congratulations! You don’t need anything else to start your Sole Trader business.
But if you don’t, you’ll need to register with HMRC, and you’ll need to provide the details below:
- Your full name
- Your current address
- Your National Insurance Number
- Your date of birth
- Your phone number
- Your email address
- The date that your self-employment began
- The type of business you’re starting
- The address of your business
- The phone number for your business
You can register directly with HMRC, or if you want a little assistance with your application, or if you need any additional services, then you might want to go through a formation agent – like Duport!
As a Limited Company, by law you must open a separate business account for your company finances. Sole traders don’t need to have one, but it does make keeping track of your business finances a lot easier, so most sole traders do open a separate account for their business.
Lots of formation agents can help you with setting up a business account during the company registration process, but if you’re looking for a little more detail, we have a great article on the basics of business banking.
Along with choosing your company name, buying a domain may be one of the most important steps you take. Snapping up a good domain quickly can literally save you thousands of pounds later.
Without a domain you can’t have a website or professional emails, so it can be really sensible to sort out your domain name early on in the process.
Every domain name needs to be unique, so it’s important to think about all the different variations, like whether you should choose a .co.uk or .com, or whether you want your domain to be descriptive (about what you do) or branded (based on your business name).
You don’t have to register for VAT unless your taxable turnover is over £85,000 but you can register voluntarily to reclaim VAT on business expenses.
This might be an advantage if you sell goods that are exempt or zero rated, otherwise you will have to charge VAT on sales.
You can register for VAT directly with HMRC, or you can use a service to ensure you’re registered correctly. Many formation agents offer this service as part of their company registration packages.
Depending on the type of business you’re starting, you may need to obtain a licence before you start trading. For example:
- Taxi drivers, nightclubs, pet shops, scrap metal dealers and others need a licence from the local authority.
- Local authority environmental health departments issue licences for hotels, restaurants, abattoirs, hairdressers, those who work with asbestos, mobile shops and premises selling food, massage and skin piercing services such as acupuncturists and tattooists.
- You need a licence to sell alcohol.
- Childminders and day care nurseries must register and be licensed. Anyone who works with children has to undergo a police check.
So if you’re in one of these sectors, make sure you’ve got “obtaining a licence” on your business start-up checklist.
There are lots of different types of business insurance that you might need for your company.
By law you will need employers’ liability insurance if you employ anyone else, even part-time. If you offer professional advice you should protect yourself with professional indemnity insurance. Some occupations have their own specialist insurance and you may also need public or product liability insurance.
If you work from home you must tell your domestic insurer or you might invalidate your policy. You may also need public or product liability insurance depending on your business.
Your new company might have employees from the start, or it might be something you grow into, but either way, it’s a great idea to make sure you’re prepared.
Becoming an employer comes with a range of requirements, starting with registering for PAYE.
Once you have employed someone you need a valid reason to dismiss them (and follow certain procedures) so it is vital to get it right.
Your interviews and advertisements must not be discriminatory; you can’t ask personal questions and must focus on the candidate’s ability to do the job. Interviewees can ask to see your interview notes about them. Once you offer someone a job an employment contract exists and you must provide written terms and conditions within two months.
You must follow the law on working hours, leave and pay (such as maternity and paternity), deduct tax and National Insurance and give pay slips. You must follow health and safety for all staff and protect them from discrimination (including from other employees).
Once your company is up and running, as the business owner you’ll be responsible for the health and safety of employees, customers and the public on your premises.
For most office-based small businesses, your health and safety standards can be as simple as making sure you’ve got a Risk Assessment, Fire Safety procedure and First Aid kit and accident book.
But if your workplace is a little more complex, involves hazardous materials or dangerous equipment, it could be helpful to check with the Health and Safety Executive to see what your responsibilities are.
For example, businesses involved with food and drink are affected by environmental health regulations and food hygiene regulations. Find your local environmental health department at www.food.gov.uk
Although you could do it yourself, most small businesses need to find a good accountant pretty quick. Take advantage of free advice sessions and shop around.
Set up bookkeeping basics and consider dedicated software or a bookkeeping service to save time and effort.
A good small business accountancy service can make a huge difference to your company. They can take time-consuming and complex tasks off your hands, save you from having to fork out for software (which you will probably need due to the Making Tax Digital scheme), and even look for ways that you can reduce your tax bill or make more of your money.
How you deal with suppliers, whether you pay your bills on time, or even how you pay will be used by credit agencies to build up a financial picture of your business. Pay bills on time and try to form relationships with companies that will establish credit for your business.
Check your customers in the same way as they will check you. Use credit reports if you are at all uncertain of a customer’s ability to pay.
Create your own company setup checklist
This list is not exhaustive but it is a good place to start. There are, of course, many more things you may want to do. For example you may want to contact your trade body for free help, advice and networking opportunities.
You might want to protect your copyright, design rights, patents and trademarks, set up a good IT system or reduce your company’s carbon footprint. Maybe you want to research grants and get some start-up or development money? Each business is different and there may be special circumstances to consider.
Whatever you decide to include in your business set up checklist, make sure you’ve got the right services and support for each step along the way.