A Guide To Starting A Business

Starting a new business is an exciting venture, but it also comes with a range of legal, financial, and practical considerations. Making informed decisions from the outset can help lay strong foundations for future success and reduce the risk of costly issues arising later.

Whether you are launching your first business, turning a side project into a full-time venture, or starting a new enterprise with business partners, there are several key areas that should be considered before trading begins.

This guide highlights some of the most important issues for new business owners and entrepreneurs.

Before You Start

Are There Any Restrictions on You Starting a Business?

If you are currently employed or have recently left employment, it is important to check whether there are any restrictions that could affect your ability to start a new venture.

These may include:

• Non-compete clauses.
• Non-solicitation restrictions.
• Confidentiality obligations.
• Shareholder agreements.
• Settlement agreements.

Seeking legal advice at an early stage can help you understand your obligations and avoid potential disputes.

Speak to an Accountant

One of the first professional advisers many business owners should consult is an accountant.

An accountant can provide guidance on:

• Tax efficiency.
• Business structures.
• VAT registration.
• Record-keeping requirements.
• Financial forecasting.
• Payroll obligations.

Choosing the right business structure from the outset can have significant tax and operational implications.

What Type of Business Should You Set Up?

There are several common business structures available in the UK, including:

The most appropriate structure will depend on your objectives, tax position, liability concerns, and future growth plans.

How Will the Business Be Funded?

Every business requires funding to get started and operate effectively.

Common funding options include:

• Personal investment.
• Bank loans.
• Investor funding.
• Government grants.
• Crowdfunding.
• Asset finance.

Understanding your funding requirements and repayment obligations is an important part of business planning.

Starting a Business with Others

Have You Agreed How the Business Will Operate?

If you are starting a business with partners, co-founders, or investors, it is important to have clear discussions about:

• Ownership percentages.
• Decision-making powers.
• Profit sharing.
• Roles and responsibilities.
• Exit arrangements.
• Dispute resolution procedures.

Formal agreements can help protect relationships and reduce the risk of future disagreements.

Where Will the Business Operate?

Many businesses need physical premises from which to operate.

You should consider:

• Whether to buy or lease premises.
• Length of any lease commitment.
• Repair and maintenance obligations.
• Service charges.
• Planning and licensing requirements.
• Future expansion plans.

Obtaining legal advice before signing a commercial lease is strongly recommended.

What Employees Will You Need?

If your business intends to recruit staff, there are a number of employment law obligations to consider.

These may include:

• Employment contracts.
• Workplace policies.
• Payroll arrangements.
• Pension auto-enrolment.
• Health and safety requirements.
• Equality and discrimination obligations.

Putting compliant employment documentation in place from the start can help avoid problems as the business grows.

Have You Considered Business Insurance?

Insurance can play an important role in protecting your business.

Depending on your activities, you may need:

• Employers’ liability insurance.
• Public liability insurance.
• Professional indemnity insurance.
• Cyber insurance.
• Property insurance.
• Directors’ and officers’ insurance.

An insurance adviser can help identify appropriate cover for your business.

Suppliers and Customers

Understanding Your Supply Chain

Businesses should carefully review the terms on which suppliers provide goods or services.

Consider:

• Pricing structures.
• Delivery obligations.
• Payment terms.
• Liability provisions.
• Termination rights.

Well-drafted agreements can help minimise commercial risks.

Supplying Goods and Services

It is important to understand who your customers will be.

Different legal requirements apply depending on whether you are supplying:

• Businesses (Business-to-Business or B2B); or
• Consumers (Business-to-Consumer or B2C).

Many businesses benefit from having clear terms and conditions that govern the supply of their goods or services.

Trading Online

Will Your Business Operate Online?

If you plan to sell goods or services through a website, additional legal requirements may apply.

These can include:

• Website terms and conditions.
• Privacy policies.
• Cookie notices.
• Consumer protection laws.
• Distance selling regulations.
• Data protection compliance.

Taking advice before launching an e-commerce business can help ensure your website complies with legal requirements.

Licences and Regulatory Requirements

Do You Need Any Licences or Permissions?

Certain industries require licences, registrations, or regulatory approvals before trading can commence.

Examples include:

• Financial services.
• Food and hospitality businesses.
• Healthcare providers.
• Property businesses.
• Transport operators.

You should identify any regulatory requirements at an early stage to avoid delays.

Building the Right Professional Team

Starting a business often involves working with several professional advisers.

These may include:

• Solicitors.
• Accountants.
• Insurance brokers.
• Financial advisers.
• Business consultants.

Obtaining professional advice at an early stage can help identify potential risks and ensure your business starts on a solid legal and commercial footing.

Frequently Asked Questions (FAQs)