How to Set Up Your Own Business
If you’re a graduate struggling to find a full-time job, becoming a freelancer or business owner is one of the most rewarding yet challenging positions you could choose.
Whether it’s a journalist, fashion stylist, makeup artist or creative designer, whatever the career is, it’s possible for you to start your own thing.
This is how to get started…
Consider your business structure
When setting up a new business, you have to decide if you’re going to be a sole trader, limited company or partnership. And of course, you need to understand the obligations and responsibilities fully you will have as the business owner.
Check out this article on legal structure – great advice from UK Gov.
Choose a business name
There are various things you need to take into account before deciding a name. Whether its for your business, a trading name as a sole trader/partnership or a limited company name.
First and foremost, make sure it’s professional and inoffensive. Legally, your business name mustn’t contain sensitive words, and if you’re a sole trader/partnership, you can’t include limited company-related words eg ‘Ltd’.
Check out Companies House to ensure your chosen name is unique and available.
If you’re a sole trader, then you must research to ensure your trading name is as unique as possible.
One final tip – if you plan on having a website for your business, check available domain names online.
Sort out your branding
It’s important for every company or brand to have a visual identity. Something that will differentiate your company from the competition. Getting a logo is a great way to begin.
Getting a business account
To keep invoices and payments in order, setting up a separate business account is advisable.
You’re likely to have an appointment booked with a business manager at your bank to set everything up. You’ll need to provide a letterhead with your logo, business name and address; photo ID such as a driver’s licence or passport and proof of address. If you’re a limited company they may need to see additional documents.
Accounts and bookkeeping
One of the most important parts of running any business is the accounts, so set up a financial bookkeeping system immediately. Keep records of all of your invoices and payments at the end of every month. Make sure you file these properly to save yourself any hassle further down the line.
If you want to make your life easier, paying an accountant to manage your books is hassle free, but will cost your a slice of your wage every month in order for them to process everything.
When it’s time to sort your tax, print out all of your invoices from that financial year and all of your bank statements. Don’t forget to include receipts and payments, including travel. Make sure you place your logo/business name on all official documents too.
Taxes, national insurance and VAT
To make everything official, you need to register as self-employed with HM Revenue & Customs (HMRC).
As a sole trader and you’ll be expected to pay income tax and National Insurance contributions. If you’re a limited company, you must tell HMRC if it’s liable for Corporation Tax, pay any Corporation Tax due and file a Company Tax Return on time.
Still not sure? Check out the HMRC website. Or just get your accountant to sort all of this for you.
Working from home
Whether it’s full time or just day or two a week working from home, make sure you contact your local authority to find out whether you need to pay any business rates.
Take into account that working from home could have implications on your mortgage, home insurance and even your tax situation. It’s not necessarily as straightforward as you might think, so check things out before you proceed.
If you need more advice check out the Governments advice here.