The great news for ambitious entrepreneurs is that the most recent statistics show that the number of Startups are at an all-time high in Britain.
Have you ever had a thought about a company or brand, along the lines of: ‘I could do that’, ‘if this business did this, it would be so much better’ or started a sentence with, ‘you know what would be a good idea?’
In many cases it is more than a passing thought. Every business that has ever existed, started as a thought which manifested itself into an idea, which then became something tangible.
It is also now easier and cheaper than ever to start your own company thanks to progress and improvements in technology, communications and connectivity in the corporate world.
Corporate and commercial law expert Gemma Lingard tells us the 10 legal steps to setting up your own startup:
As you start-up and ultimately expand, the structure of your business is fundamental to success. The most common possibilities are – Set up as either a sole trader, a partnership, a limited company or limited liability partnership.
If you are going into business with other people, a sensible decision would be to have a shareholders’ agreement (for a limited company) or a partnership agreement drafted.
This guarantees that your financial or non-financial investment is made perfectly clear and that the co-partners know precisely how the relationship is going to be overseen from the start. This makes things far easier for all parties going forward.
Typically, the bank is the first port of call for most new startups looking for funding to get things off the ground. This can be the biggest cause of concern for many business owners.
Nonetheless, having a solid business plan, creating and then presenting financial forecasts will help when working with your bank to secure those vital funds.
Different company structures have varying tax and legal requirements, so it is best to get advice that’s going to help your own personal circumstances and future plans. A limited company must be registered at Companies House.
After you’ve registered at Companies House, you’ll need to register for Corporation Tax with HMRC within 3 months of starting to ‘do business’ or you might be penalised if you register late.
Where will your business be operating from? Most businesses are operating effectively from home. If you are starting off as a home-run startup you may want to think about the possible restrictions.
Once it comes to choosing a premises there are a number of key questions that need to be answered to help your startup on the way to success – What are the service charges? Can they increase? Can the rent be increased, if so by how much and when? Will you need to obtain planning permission?
Know Your Market
Your market consists of broadly three main constituents: your customers, your competitors and your suppliers. Your aim is to know the people you’ll be selling to.
Understanding what your customer wants will enable you to translate your product or service into something sellable. Look at your competitors, analyse their good and bad points and make your business better.
Desire And Belief
Although this sounds obvious, a desire to run your own business is integral. Running your own company is going to be hard work. It boils down to motivation. Also, an unswerving faith and belief in your business is one thing that will get you through hard times (assuming the idea is a good one).
However, be resilient and adapt to change. If something goes wrong, learn from it and be ready to evolve.
Intellectual Property (IP) is all about protecting your ideas and the ‘property’ you rightfully own. Things such as your designs, artistic works, symbols, images and names can be protected from competitors and other businesses who may want to nab your clever ideas.
Owning your designs and logos not only stops other people using them, but also means you can sell them at a later date or make money by allowing people to use them with your permission.
A top tip is to make sure your contracts state that you alone own the IP for anything that any other agency or designer creates on your behalf.
Terms Of Business
As a business owner, you need to be fully aware of all your obligations. Arranging your Terms of Business, sometimes known as T&Cs, is vital to get right from the beginning of your venture.
With the introduction of the new Consumer Rights Act 2015 (CRA 2015), sorting out your Terms of Business is very important if you trade to the consumer market.
Trading to consumers can be a complex legal setting anyway, but the CRA 2015 has been slimmed down and reorganised which has made it easier for consumers not only to know their rights but to contest bad business practice too.
If you are a B2B trading firm, your terms of business are a vital part of your business. Doing this correctly will limit potential exposure to regulations and protect your company’s position.
This is absolutely key for the success of any SME. Building relationships with external contacts can lead to all sorts of paths, but you have to be active.
Speaking to other businesses, owners, people, potential customers and attending networking groups will help you expand your reach and attract more business either immediately or further down the line.
It’s also much better to forge relationships with people who can help you before you actually need them. Get to know lots of trustworthy professionals, like an accountant, financial adviser and a solicitor.
Communication is crucial to the success of your startup so it needs to be strong both internally and externally.
It’s astonishing how often business owners fail to speak to their partner or other shareholders. Having family and friends on-board will make all the difference in helping your business to succeed.
Starting up your own enterprise is enormously challenging and will consume most of your time. However, with the right help and advice along the way, it can be made easier, more efficient and ultimately more cost-effective.