How to start a business

What do you need to consider when starting a new business venture?

Commercial lawyer, Stuart Price, takes a deep dive into what entrepreneurs should consider when creating a start-up business. Stuart discusses the essentials, documents and key points for consideration.

Researching your business idea

Business idea

Every business stems from an idea. You should generate a good idea that you’re passionate about. A lot of good business models solve other people’s problems.

Market research

It is imperative for businesses to understand the market environment. Without this knowledge, a business can quickly fall behind its competitors.

The market environment consists of both internal and external factors, some of which apply to all businesses and others are relative to industry, location and time – this is often referred to macro and micro environments.

There are many types of research methods a business could use, and different reasons why a business should conduct research. These reasons could be to better understand the marketing environment, increase customer satisfaction, competitor research, or to find the strengths and weaknesses of a company, product, or service.

Business plan

Once you have a viable business idea, it is time to generate a plan. You need to outline the company’s objectives, define your unique selling point, mission, vision and values. You’ll also need a company name and branding such as logos, colours and fonts, this is also known as the business assets.

Company structure and registration

You’ll need to decide whether the business will be registered as a sole trader, limited company or partnership. If you are going to open a limited company, this will need to be registered at Companies House. You will not need to register your sole trader business or partnership with Companies House, but you will need to tell HMRC of your intentions.

You will also need to trademark your name and logo.

Accounts and funding

Secure the necessary finance to start and run your business. This may be from your savings initially, or from families and friends. But to grow you will need to seek finance from banks or investment from third parties (e.g. business angels). 

You’ll also need to set up a separate business bank account.

Business insurance

To keep your business protected, you will need to have suitable business insurance.

What are the legal documents you need when starting a business?

Company incorporation documents

These could be from Companies House and/or HMRC.

Data protection documents

If you store or use personal information.

Lease or tenancy agreements

If you’re renting premises for your business.

Financial agreements

Details of any loans or financial agreements.

Contracts

Contracts form the cornerstone of your business relationships with your customers, clients and suppliers. Without them, you don’t have a business. This is not an area where you should try to save money as mistakes will be costly.

What other further issues you should consider

Create a website

A website is your business’s online storefront. It is a great way to attract customers and give them the information they may need and in some instances, the transition can be completed here.

Create social media accounts

These can help you reach and engage with your customers.

Marketing strategy

A well-defined strategy can help attract and retain customers.

Additional funding

Whilst not essential, having extra capital can provide a safety net.

Professional support

Lawyers, accountants, and consultants can provide valuable advice.

Tech toolkit

Assemble a set of tools and software that can help streamline your operations.

More from the entrepreneur handbook

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Further information

For more information regarding the set-up of your business, contact Stuart Price, partner. E: stuart.price@lodders.co.uk, T: 01789 339117