Need help starting a company in the UK? This essential checklist covers everything from business registration to market research.
The UK has a strong and developed economy with a GDP of $3.07 trillion. The economy has grown steadily in recent years, with a GDP growth of 7.5% in 2021. The UK is also a very open economy, with trade accounting for 60% of GDP. This makes it a great place to do business for companies looking to expand internationally.
Starting a new company in a foreign country without the essential know-how is no easy job. But don’t worry; our article aims to simplify all the essential steps on your way to a dream UK company.
Want to take your startup or established company across the UK landscape? Make sure to keep these things in mind:
Think of Business Ideas
When setting up a company in the United Kingdom, planning and thinking of ideas that interest you towards entrepreneurship is best. Coming up with a great business idea is the first step to starting a successful business. But where do you start? Here are a few tips:
- Look for problems to solve. The best business ideas come from solving problems that people have. What are the pain points in your own life or in the lives of your friends, family, or colleagues? Can you develop a product or service that solves one of those problems?
- Be creative. Be bold and think outside the box when it comes to business ideas. The most successful businesses are often the ones that are the most innovative.
- Pay attention to trends. What are the latest trends in your industry or in the world? Can you come up with a business idea that capitalizes on those trends?
- Don’t be afraid to fail. Failure is a part of the entrepreneurial journey. Don’t let the fear of failure stop you from pursuing your business dreams.
Think of all the ideas you can, write them down, and start categorizing similar ones in a group. This way, you’ll have a more organized plan to execute.
Find Your USP
A USP, or unique selling proposition, is a statement that summarizes why your business idea or services are different from the competition and why customers should choose you. Thinking of your differentiating factor in the early stages of company setup will make the pathway easier for you. A good USP is clear, concise, and memorable. It should also be something that you can consistently deliver.
Here are some tips for creating a unique selling proposition:
- Start by understanding your target audience. Who are your ideal customers? What are their needs and wants? What are their pain points?
- Identify what makes your business unique. What do you offer that your competitors don’t? What are your strengths?
- Focus on the benefits, not the features. Don’t just tell people what your product or service is; tell them what it can do for them. What problems will it solve? What benefits will they experience?
- Be specific and measurable. Don’t just say that you’re the best. Say that you’re the fastest, the cheapest, or the most reliable.
- Be believable. Make sure your USP is something that you can deliver on. If you promise something you can’t deliver, you’ll disappoint your customers.
Here are some examples of unique selling propositions:
Warby Parker: “Try on five pairs of glasses at home for free.”
Dollar Shave Club: “Shave time and money.”
Taco Bell: “The best food in the world for less than $1.“
Conduct Market Research
Market research is gathering information about a market to help businesses make better decisions. It is like a detective story, where you are trying to solve the mystery of what your customers want and need.
Market research can be conducted at any stage of a business, but it is imperative if you are new to the market or launching a new product or service. By conducting market research, you can:
- Identify your target market: Who are your ideal customers? What are their needs and wants?
- Validate your product or service: Is there a demand for your product or service? Will people pay for it?
- Set realistic goals: What are your sales goals? How much market share do you want to capture?
- Develop a marketing strategy: How will you reach your target market? What channels will you use?
- Benchmark your competition: Who are your competitors? What are they doing well? What can you do better?
Write Your Business Plan
Now that you’ve done a complete market analysis of your product or services in the United Kingdom, it’s time to formally document those ideas and research for execution or funding (if needed) purposes.
A business plan is a written document describing your business goals, strategies, and how you plan to achieve them. It is a roadmap for your business and can be used to secure funding, attract partners, and guide your day-to-day operations.
A good business plan should include the following sections:
- Executive summary: This is a brief overview of your business plan, including your company’s mission, products or services, target market, and competitive advantage.
- Company description: Here, you will describe in more detail your company, including its history, legal structure, products or services, and management team.
- Market analysis: Here, you’ll add a complete analysis of the market for your products or services, including the size and growth potential of the market, your target market, and your competition.
- Marketing plan: This section outlines your strategies for promoting and selling your products or services, including your target market, marketing mix, and advertising and promotion plans.
- Financial plan: This section projects your company’s financial performance for the next few years, including revenue, expenses, and cash flow.
A business plan can be a valuable tool for any business, but it is significant for new businesses. By writing a business plan, you can clarify your goals, identify your strengths and weaknesses, and develop a strategy for success.
Make A Budget
A budget is the financial blueprint of your business plan. It outlines where your money is going to come from and where it is going to go. A well-crafted budget will help you stay on track and achieve your goals.
When creating your budget, it is vital to be as detailed as possible. This means accounting for every penny, no matter how small. You should also break your budget down into different time frames, such as six months, 12 months, and 24 months. This will help you see how your spending will change over time.
It is also important to be creative when budgeting. There are many ways to save money, such as negotiating discounts with vendors, bartering with other businesses, or using free resources. By being creative, you can stretch your budget and make your money go further.
Consider Funding Options
There might come a moment in the future when you may need excess funding to sustain your business. This is when funding (according to your expenses and debt appetite) comes in. There are many different fund-seeking options for companies in the United Kingdom. Some of the most popular options include:
- Crowdfunding: This is a way to raise money from many people, typically through an online platform. There are many different crowdfunding platforms available, such as Kickstarter and Indiegogo.
- Angel investors: These are wealthy individuals who invest in early-stage businesses. Angel investors are typically looking for businesses with high growth potential.
- Venture capital firms: These are firms that invest in start-ups and early-stage businesses. Venture capital firms typically have a lot of money to invest and are looking for businesses with the potential to be very successful.
- Government grants: There are a number of government grants available to businesses, particularly in the areas of innovation and research and development.
- Bank loans: Banks can provide loans to businesses, but they typically require a good credit score and a business plan.
The best way to obtain funds for your business will depend on the stage of your business, the amount of money you need, and your risk tolerance. If you are starting out, crowdfunding or government grants may be a good option. You can get a bank loan or venture capital investment if you are a more established business.
Start Registration Processes
Setting up a company in the United Kingdom involves several regulatory steps. Here’s a simplified guide to the process:
Choose a Business Structure:
Decide on the type of company you want to form, such as a private limited company (Ltd), sole trader, partnership, or limited liability partnership (LLP).
Choose a Company Name:
Pick a unique and appropriate name for your company. Ensure it complies with naming rules and isn’t already registered by another company.
Register the Company:
You’ll need to register with Companies House for a private limited company. You can do this online or by mail. Provide the required information, including company name, registered address, directors and shareholders’ details, and the business’s nature.
Appoint at least one director (or more) for your company. You’ll also need at least one shareholder. The director(s) are responsible for managing the company, while shareholders own the company.
Memorandum and Articles of Association:
Prepare the memorandum and articles of association, which outline the company’s constitution and internal rules.
Designate a registered office address where official documents will be sent. It doesn’t have to be your main business location.
Decide on the initial share capital and the value of each share. This determines the ownership structure of the company.
Register for Taxes:
You must register for various taxes, such as Corporation Tax, Value Added Tax (VAT), and PAYE (Pay As You Earn) if you plan to employ staff.
Open a Business Bank Account:
Set up a business bank account to separate your business finances from personal finances.
Licenses and Permits:
You may need specific licenses or permits to operate legally depending on your business type and activities.
Think of Marketing Strategies
Promoting your new business is crucial for attracting new customers. Unless you have a physical store, having a solid online presence through a website and online marketing is essential, especially when starting out.
Creating a website is easier these days, but hiring a professional for things like graphics and content, such as your company logo is often better. An expert in branding can help ensure your visuals and messages appeal to your target customers and maintain a consistent image.
In addition to having a user-friendly website, it’s essential to understand these online marketing tools:
SEO (Search Engine Optimization): This involves creating valuable content like blogs to increase the number of visitors to your website.
Advertising: Many businesses use online ads and SEO to boost website traffic. Google AdWords is a widely used service for this.
Social Media: Properly managing social media is crucial. If you need more time to handle platforms like Facebook, LinkedIn, and Twitter, consider outsourcing this to an agency.
Analytics: Understanding website traffic patterns is essential. Google Analytics is a tool used to track web statistics and is free.
Depending on your business sector, traditional marketing methods like distributing flyers, newspaper ads, or TV commercials might also be effective.
Launch Your Business
Are you thinking of starting a company in the UK? If so, you need to make sure that you follow the essential checklist to avoid any problems down the road.