Are you looking to for starting your own business and want to know the steps on how to start a business in the UK?
I am a UK citizen, but I have started companies all over the Globe and also lived in the US for ten years and I am going to open this article with some key reasons as to why the UK is a great place to start a company:
- The Country has a good economy and a strong currency
- The legal system is one of the best and most independent in the world
- It is easy to start a company as a UK National and depending on your visa type, Foreign National may find the process a little more difficult or complicated.
So Let’s Get Started on how to start a business
The first step to take into account is what type of business do you want to start? There are so many options here and what I would advise here is to start to think ahead a little and start to try to predict business trends in general BEFORE, you make any final decisions.
In my role as a coach and mentor, one of the biggest mistakes I see continually is people ‘selling to themselves.’
Let me explain:
There is no better feeling than making the decision to start your own company, but making sure that the company has a market and that people are going to want to buy from you is an entirely different matter.
I see many people who are ‘married’ to their business ideas and those ideas are simply never going to work but try telling them…they will have none of it, start their business and then fail.
Look at how you got to the point of starting your company – in my case I was working for a staffing/recruiting company, saw what they did, the money they made and decided I could do it better. It was that simple and from there it was a matter of hard work, having a strong mindset and delivering what I had promised to my clients.
Not all of my companies came about that way and some were started on a simple belief that I could break into an industry and disrupt it – most of those didn’t work and in those examples, it was more the fact that I thought I could ‘buy’ my way into the business – huge mistake!
Here are some ideas as to what business to start.
Step One
Start with an audit – both personal and business. What are your strengths and weaknesses and here you must be brutally honest with yourself?
The idea here is to work out what you are good at and don’t be shy to ask others – you will be at the mercy of your mindset when you start a business probably more than anything else. Take this step very seriously.
Next, you need to look at your business idea and here if you know me you will hear me time and time again stating or uttering the phrase ‘think like a hedge fund.’
It is all about research, research, and research and let me add the word ‘predictive’ to the mix as well – it is important to analyze trends and start to learn how you can stay ahead of the market and in this way you will be able to stay ahead of your competition when you actually get started.
When you adopt a disciplined research mentality it will stay with you for life and I only wish that I had done this in my early business career.
So hopefully now you have decided on your business, gained some detailed information about the market, identified some problems that you can solve and now you can start thinking about the most important part of the business and that is having a clear business message.
If you go through this process systematically and take it very seriously, you will come up with a SWOT analysis long before you even start to get into the business planning phase.
SWOT is a critical component of the business plan!
Stage Two
Now it is time to think about the legal entity of your business and whether you will be a sole trader, operate a partnership, a limited partnership or a limited company.
The choice is yours and it is beyond the scope of this article to go deeper into them all, but in my career, I have used all of these entities! Take specific legal advice on this subject from both your lawyer and accountant.
Once you have decided, you can now start the process of registering your business based upon the advice you have received and at this stage, it is important to look at what help is on offer from the Government.
I live in Wales and there is a tremendous amount of support and help from the Welsh Government available for people who need help to start, grow and operate a business and dependent on what type of business you are starting, there may be financial help available, so take a look. If you are in wales then go to Business Wales and look around the site.
Take a look at England, Northern Ireland and Scotland as well, depending on where you are located.
Business Planning
I have put this section ‘between stages’ as it is an extremely important part of the process and you will hear many business coaches and advisors talk about the importance of business planning and they are correct…to a degree.
I have my own views on this process and as I have written so many, I can talk from personal experience on this subject.
I want to talk very briefly about a saying in the Military – all plans go out of the window when the first shot is fired.
But let me assure you that there is a plan in place with regard to any Military operation and therefore it provides a reference point for when things do go wrong because trust me in business, things will go wrong.
You have already prepared a lot of the business plan in your research phase if you have done it correctly, so you are to a degree, already way along in the process.
To me, a business plan is a continual work in progress and many accountants and advisors will disagree with me here, stressing the importance of having a solid plan, with ay three scenarios – the best case, expected case and worst-case outcomes to show the effects on sales and cash flow.
I agree again and the first thing I do when advising a start-up entrepreneur or business is to make sure you have at least six months’ personal income (a year is better) and you are extremely conservative about the sales projections.
For example, in my staffing company, I would give a new salesperson three months to successfully place a candidate with a client and let’s say that I am expecting that candidate who is placed to start on the first Monday in month four.
I would issue the invoice on that day and if we take the average credit period I would extend to my clients as 30 days, then I would expect the invoice to be received in month five.
But I would make no provision for any income in my business plan!
Here’s why:
I know from experience that out of say five successfully placed candidates, one will not start with the chosen company for whatever reason and when I give 30 days credit, in reality, it will be more like 45 or even 60, so I am looking at a new salesperson and giving them the time (three months) to make their first deal, wherein all probability the person will not start!
Now my business plan would look extremely unhealthy on this basis, but it is closer to reality from experience.
Conversely, I have been extremely and pleasantly surprised when people overperform and smash targets, but the most important thing about starting your business and creating a business plan is to be extremely conservative on the subject of sales and to make sure you have enough income to survive accordingly.
I like to start with a simple business plan that identifies the risks to the business as well as the opportunities – I always make projections conservative and make sure that there is enough cash to survive and that is the most important part as so many companies fail and very quickly.
Here are the things you should cover in your plan:
Mindset – This is the most critical component of everything and I am going to, therefore, include it in the planning process. If you do not have the right level of commitment and determination to succeed, then stop right here. You will save yourself a whole load of trouble in the long run. It is vital to have a resolute belief in both yourself and your business and this factor alone has been an extremely critical component of my successes and also in getting me through my fair share of business disasters.
Market – who are you serving and what problems are you helping your clients to solve?
Message – what is the clear and concise message that you are going to deliver in relation to the market?
Model – what is the business model you are going to construct – online, offline or both, where will you be located, do you need offices, etc and how many staff to deliver your services?
Monetize – how are you going to monetize your business, what is the pricing structure, credit terms if applicable, refund policy, how much are you going to spend on marketing, etc?
Manage – what systems, processes, and procedures do you need to have/develop in relation to the above and how are you going to measure them? Here I am looking at each and every aspect of your business and this is where you really need to keep the SWOT part of your business, real-time.
Finally, I will share a story with you regarding someone I coached a few years ago – they had come to me with the most elaborate business plan that I think I have ever seen. It was full of facts and figures, well written and presented with numerous infographics.
I went through each piece of the plan meticulously and raised the usual questions and the person started to become quite defensive and even aggressive stating that if I didn’t like what was written, then the whole idea should be abandoned. I patiently explained that I am only raising basic questions relating to the two critical components -sales forecasts and cash flow.
In the end, there was a realization that the world of business was not for this person and the decision was to go back to full-time employment. A simple discussion had saved a small fortune and allowed the person to go back to their comfort zone and enjoy life.
Business is not for everyone and there is no shame in admitting it!
Stage Three
Now it is time to execute and put all of the planning into motion.
In today’s economy, you will almost definitely need a website and this is where again so many people go wrong.
Your website should be your hardest-working salesperson and should address each and every query from any potential or existing customer.
Too many start-ups build ‘pretty’ rather than functional websites and one of the first things to address is your search engine ranking and right from the start.
Now Social Media is an important part of online commerce today and it should never be avoided, but there is also the fact that you absolutely should make sure that your site is optimized for search engines and over time, this will result in the generation of leads, so get the process started.
In my companies, I had dedicated people to design, optimize and ensure that our websites were functional and those skills are seemingly available everywhere these days and the amount of help you see with advertisements on Social Media is becoming crazy…but…there are very few people who really know what they are doing and will take your money and spend it fast.
I like people who give – especially their time and one such expert in this field who is patient with people who are just starting out is Fernando Raymond and I strongly advise you to connect with him and let him show you what he can do in terms of everything relating to websites, especially marketing.
Don’t forget other marketing material as well – business cards, flyers and whatever else you need for your company. On the subject of business cards, please don’t make the mistake of getting the cheapest possible. if you are serious about your business, then be serious about the presentation of your business and get some decent, heavyweight business cards that have been designed properly.
Finally my thoughts on how to start a business…
Please understand that I am essentially trying to cover my lifetimes work into an article and it is simply impossible to cover everything, but I hope I have covered enough of the basics to get you started and you can always contact me if you need further help.
I will end by re-iterating the two most important factors of business success and they are sales and managing cash.
Please don’t be overawed by the prospect of selling – it is not really difficult at all and something that everyone has in their DNA and a subject I will devote many future articles to.
To help you get started – forget all of the ‘sales advice’ you get from the so-called experts and take it from someone who has trained hundreds of salespeople. Simply be genuine and ‘be yourself’ – talk to people and take a genuine interest in helping them to solve the problems that you are in business to do. And start at the highest level with your customers and in my personal experience, the higher you go, the easier it is to have meaningful conversations, so don’t be daunted by the sales process.
Simply be natural, be genuine and talk to your customers – it’s amazing what can happen.
Now without a sale, nothing can happen, but once you have generated a sale, you are into cash flow territory or to be precise, credit management, which we have covered.
Make sure you build up excellent relations with the financial departments of your clients – it will go a long way to helping you collect the cash you have worked so hard to earn.
It is also very important to look at trends and measure them. Clients can slip for a variety of reasons and it is better to be aware of a trend before the damage is done – remember the part about thinking like a hedge fund and predictability?
In my business career, I have endured three recessions and it is true that recessions create opportunities, but selling to your customers in recessive economies is much harder, for obvious reasons – collecting your cash is even worse.
In the technology recession of the early 2000s, I was owed millions simply because we had allowed companies to seriously breach our credit terms. I am the one responsible as the CEO, but I did have to make some changes to the finance department and don’t ever think that ‘big business’ is any different to a small one, you are simply adding noughts to the numbers but the principles remain the same.
Always keep a very keen eye on sales and cash flow – if sales targets are not hit, then cash flow will be affected and as simple as that may sound, let me assure you that there are a great many entrepreneurs and businessmen who bury their heads in the sand and ignore it at their peril.
Don’t be one of them.
Starting a business in the UK can be extremely rewarding and it is a great place to do business, so get out there and enjoy it!
-Neil
Starting A Business UK Business
Last modified: June 5, 2019
